After record declines in October’s producer and consumer price indexes, deflation is today’s buzzword. But Bill Bonner says the explosion of assets on the Fed’s balance sheet will create serious monetary inflation problems further down the line.

Paulson says no to automakers…  Currencies trade in a tight range…  Richard Russell on a Wednesday!  TIC Flows improve… And Now… Today’s Pfennig!

Contrasting monetary policy moves from the Bank of England (BoE) and European Central Bank (ECB).

The BoE stunned the markets with a 1.5% rate cut, taking its benchmark rate to 3.0%, the lowest in over half a century. The ECB, meanwhile, met expectations with a 50 basis-point cut. The Eurozone’s policy rate now stands at 3.25%.

This from Bloomberg:

The Bank of England is working with the government to limit the fallout from what it calls the worst global banking crisis in almost a century. Prime Minister Gordon Brown was forced last month to broker a takeover of HBOS Plc and Bank of England figures show financial institutions in the U.S. and Europe have already suffered $2.8 trillion in securities losses from the crisis.

“They’re admitting…

Andrew Snyder says savvy investors can earn some quick profits on the back of the government’s $700bn bailout plan. A company like General Electric (NYSE:GE) doesn’t need a cash injection to survive, but can use a “shot in the arm” to revitalise growth.

New Home Sales for September are announced today and this will sound like a broken record, but they are expected to disappoint.  In the face of the frozen credit markets, I guess a drop of only 2000 units could be viewed as a small victory.

Stimulus checks helped send retail sales up 1% in May, the Commerce Department said yesterday (Thursday), bolstering the dollar and lifted the mood on Wall Street.

The tax rebate of 2008, which is scheduled to begin this week when the first checks go into the mail, is the latest example of American mercantilism in action.

Retailers are trying to lure shoppers helped by stimulus checks, reports AP.

You may have to wait until May to see your economic stimulus check, but some retailers already have their sights set on how you will spend it.

Both Kroger Co., one of the country’s largest grocers, and department store operator Sears Holdings Corp. are already offering discounts and freebies to consumers who turn the rebate checks into gift cards.