Treasury Secretary Timothy Geithner discusses the burdens of his position, why he felt it was necessary to bailout the financial system and the paternal role taken by the federal government:

Many people wonder what makes gold special as a store of value. When inflation fears set in, people flock to gold. One answer is that the dollar used to be backed by gold. An even better answer I will leave to Judy Shelton, an economist and director of the National Endowment for Democracy:

The Group of 20 (G20) met in Scotland over the weekend, bringing together central bankers and financiers of nineteen countries, and the European Union (EU). The collection of nations constitute 80% of world trade and two-thirds of the world’s population. (1) Discussions of “re-balancing” the world economy have taken place over the last few months by members of the G20; those sentiments continued this weekend in St. Andrews, but apparently only in general terms. (2)

As of today, few things would be less appealing in your portfolio then dollars. As the Federal Reserve pours liquid-ity into the economy through TARP, stimulus and bailouts, and the Federal Government runs record deficits, interest rates stay artificially low. Depressingly low. In fact, a quick surf of Bankrate.com tells me the highest yielding money market account currently available (MMA) is 1.81%, while the average yield comes in at a whopping 1.113%. (1) That means if a person has $20,000 of hard earned money stuffed away in a MMA, he or she will earn roughly $30/month in taxed income. Nice.

Gold bullion futures touched a record high $1,045 in yesterday’s trading session in New York. If you believe in stock indexes breaking through resistance points, this may be just that for bullion.

According to estimates by the nonpartisan Tax Policy Center, 47% of U.S. households are projected to owe zero federal income tax in 2009. (1) Is this good, bad, or inconsequential?

This a bit old, but is simply classic. A poorly drawn slide show illustrating the absurdities of the mortgage meltdown. Warning: Much foul language ensues. Enjoy.

The public debt soared to $1.27 trillion in July, for fiscal year 2009. The current ceiling for the total public debt is set at $12.1 trillion, a figure the Treasury projects will be eclipsed by mid-October. This has Treasury Secretary Tim Geithner urging Congress to raise the debt ceiling, and raise it fast.

A vicious cycle is going on. The government engages in deficit spending, racking up a debt which makes any investor wonder if the U.S. is good for the money. Investors who loan money, require a risk premium to compensate for their risk exposure. As the risk to loan money to the U.S. increases from a ballooning debt, the required rates of return for the Treasury debt must increase. So, the U.S. government must pay higher yields to China and other creditors to finance deficit spending.

Basically, monetizing debt is a process of lending money to one’s self. The government spends, proceeds to write an IOU (debt contract in the form of a T-bill) and hands it to the Federal Reserve.