More of the same for social mood; Federal Reserve in deep trouble

The U.S. dollar and euro are back to 50 on the 14-day RSI. (Here's a chart for the U.S. Dollar Index.) I'm looking for a stronger U.S. dollar in the first half of 2011, but a stronger euro now would make next year's move even bigger. In any event, I expect the euro to pick a direction before the end of the year and continue in that direction for the better part of January.

Other than that, there's not a lot of news. There's plenty of articles about the problems in Europe, but its nothing I haven't mentioned before.

Riot breaks out on streets of Rome as scandal-hit Silvio Berlusconi survives as Italian premier by just THREE votes

Slovak politician suggests dropping euro, latest eurozone breakup speculation

Mish has a nice roundup of Spanish debt problems.

My pick for the next high profile DOJ anti-trust case is Google.

Rivals Say Google Plays Favorites

I've been thinking about buying a place in Florida. But is this the sentiment of a bottom?
Foreigners flock to Florida real estate bargains
"I'd rather put my money in real estate than leave it in the bank. In a few years I'll make a nice bundle because the prices are going to go up, no question," she told AFP.

The latest on Chinese inflaiton.

Inflation a threat as growth to slow
The mainland's consumer price index - a key gauge of inflation - rose 5.1 per cent year on year last month, the most in 28 months and well above the full-year target of 3 per cent.

The slightly higher threshold for inflation in 2011 was consistent with another official media report yesterday that the mainland aimed to cap new loans at about 7.5 trillion yuan (HK$8.76 trillion) next year.

The China Securities Journal also reported that the growth in money supply would be below 16 per cent, slightly lower than this year's 17 per cent. "In all likelihood, the priority of monetary policy next year will still be protecting growth," the newspaper said in a front-page report.

Air Force surpasses Chinese level of Internet filtering.

U.S. Air Force blocks NYT, Guardian over WikiLeaks

Sword of Damacles soon to be affixed above the Federal Reserve.

Audit the Fed in 2011

Robert Prechter predicted the discrediting and abolition of the Federal Reserve back in 2003. There are many arguments for why deflation will rule, but now social mood and politics may be in the drivers seat. As I've written before, social mood only creates possibility, it is the facts on the ground that determine the who, what, when and where. The public is angry at the Federal Reserve (a majority currently favor reigning in the Fed or abolishing it) and we are not even in a crisis, but this is just a poll number. Without political will, we can see this as a reflection of the social mood, but nothing would come of it. As I wrote in Socionomics—Audit the Fed to Financial Reform, the movement to audit the Fed fizzled and in 2009, legislation was passed giving the Fed even more power.

In 2011, however, Ron Paul will be in a position to take advantage of a sharp drop in social mood and he already has legislation prepared, as he's tried for years to bring this issue to the attention of Congress. Next time there is a crisis, look for Congress to unleash the anti-bailout with legislation targeting the Federal Reserve.

Finally, please watch this video.

I've previously written on the topic of devolving power in Let A Thousand Nations Bloom and Secession talk in Alabama and San Francisco. There's also the well-known comments from the Texas governor Rick Perry. Until now, this sentiment hadn't expressed itself outside of rhetoric, but now there's a judicial victory in favor of state's rights. The U.S. can move very far in the direction of "secession" without doing anything remotely secessionist because of the fluidity of the political structure. In the wake of the Obamacare victory, I expect the states will look for more ways to increase their power relative to the federal government.

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