In the currency market, the dollar edged lower against the euro. Late Monday, the euro was trading at $1.275 vs. $1.2712 on Friday. China’s state-run news agency, Xinhua, said that the government’s stimulus program will “will loosen credit conditions, cut taxes and embark on a massive infrastructure spending program in a wide-ranging effort to offset adverse global economic conditions by boosting domestic demand.”

With inflation in prices running at more than 10%, and inflation in credit running at up to 100% and more, bond investors are getting the lowest yield in half a freaking century? Hahahaha! Morons!

Bill Bonner says the world as we know it is finished. We are entering a new era of inflation and dollar weakness, and it’s here to stay. Even T-bonds aren’t a safe haven anymore…

But that was not the only thing that was causing mayhem with the Mogambo Economic Alarm System (MEAS), as the Federal Reserve itself sold off another $11 billion of its government debt last week! Yikes!

Actions taken by the Federal Reserve to calm financial markets and ease the housing crisis are working, a US government official claims.

“Markets appear to be gaining confidence and the availability of credit has improved modestly,” Clay Lowery, the Treasury’s assistant secretary for international affairs, told Bloomberg. More from that story:

The Fed’s interest-rate cuts and a government economic stimulus package have helped to ease market turmoil and support consumer spending, [Lowery] said.

For 25 years, the Fed has kept inflation at an average of 3.2 per cent a year - that should be applauded’! Hahaha! You will go a Long, Long Time (LLT) long time before you hear something so ridiculous! Hahahaha! Applauded! Hahahaha!

“Total debt everywhere, like Old Man River, just keeps rolling along, like a snowball rolling downhill, getting bigger and bigger, which is such a strange mix of metaphors that I realize that I am completely confused and frightened.”

Well, as I suspected, it doesn’t look like the Bank of England’s £50bn injection is going to bring down mortgage rates any time soon.

Italian elections have traditionally been confusing, with one weak center-left coalition government replacing another. But the election held on April 13-14 was unusual for Italy, as it produced a clear result.

“And one of the sensitive Mogambo Economic Tremor Detectors (METD) shows that the apparent slowdown in Total Fed Credit for the past few months has now been revealed as a mirage, and Federal Reserve Credit has now ballooned another $6.1 billion…”