BEWARE OF THE IMF

With the upcoming Riksbank of Sweden set to make an important policy decision next week, the global central banking community's hunt for a flicker of inflation continues. With all this searching at some point the question needs to be asked: Could this turn out to be one of this century's biggest bureaucratic ruses?

This is really about capital controls, money moving into and out of countries. Volatility is caused by so-called hot money. Chinese officials are upset with a couple of U.S. hedge fund managers who are betting the yuan has further south to go. During the Asian Tiger crisis hedge fund runners were the villains of choice, too. Politicians and central bankers never take the blame for their own incompetence. The idea that you can sanction ZIRP and negative-ZIRP in a good portion the the globe's economies without stimulating volatility is laughable.

Like pent up energy in the water stored behind a dam, when inflation returns--and it will--look for a scenario uglier than any of these pathetic government bureaucrats bargained for. And what they're bargaining with is your future. And if that doesn't scare you more than a spooky movie we hope the force is with you.

The massive money creation that's taking place behind the phony mask of saving economies will turn out to be your worst nightmare. Once again these lads and lassies are fighting the last war and have no clue what they're doing. This is a clear currency war denied only by government officials and their lackeys in MSM and economics.

Haruhiko Kuroda, governor of the Bank of Japan, opened the door for capital controls further recently when he suggested China might want to use capital controls to protect a run on it currency reserves owing to a weakening yuan. This is not a new idea. In fact, it's an old one. How old depends on how well you know your monetary history.

It was the  bureaucrats at the IMF who signed off after the Bretton Woods fixed exchange rate failure, opening the way for money to flow freely across borders. And now that same IMF led by Managing Director Christine Legarde is complaining about the situation, calling "the short-term nature and inherent volatility of global capital flow...problematic."

If the bureaucrats at the IMF are in favor of it, you should already be starting to build your underground storm center. This meaningless organization over wrought with layers of bureaucratic nonsense has been off base so often one of these days it will turn out to be correct. But this isn't one of them.