Governments are hosing down the markets with bailout money. Central banks, meanwhile, are making sure the cost of borrowing is as close to zero as possible. We smell another bubble in the making…and another inevitable crash. Talk about priming the pump for the next bout of excessive exuberance.

Luckily, I had been transferring lots of money from the operating account at the bank into cash in the office safe in case of some kind of emergency. And sure enough, here’s an emergency! Who says I don’t know how to plan ahead? Hahaha!

There seems to be two important consensuses coming from the world’s pre-eminent economic minds. One is that the inflationary policies of the Federal Reserve are setting the economy down a dark path. The other is that the guys in charge of the Federal Reserve are the only ones who don’t realize this.

The next president will face soaring foreclosures, insolvency at Freddie and Fannie, street protests against foreclosures, and a growing number of bank failures. It’s not too hard to guess what’s likely to happen next, is it?

The Bureau of Labor Statistics (BLS) reported another sharp increase in producer prices during March. Finished goods were up 1.1% and intermediate-level goods rose 2.3%, pushing the year-over-year rates to 6.9% and 10.6%, respectively, in the month of March — the biggest yearly increases in this price indicator since 1981.

Now that Congress is getting involved, we should see some decisive action, a clear and easy solution to eliminate the financial collapse now knocking on our doors… and if you believe that, I’ve got these great banking shares to sell you.

Ben Bernanke’s testimony yesterday in front of congress is being taken by Wall Street as a signal that the Fed is prepared to continue to lower interest rates.

According to Bloomberg, traders now see a one-in-five chance of a half-point reduction in the benchmark rate, to 1.75 percent, at the April 29-30 Fed meeting.

Bernanke told congress yesterday that the Fed is “ready to respond to whatever situation evolves,” and referred to “considerable stress” in markets.

On March 31, Treasury Secretary Hank Paulson announced the laying of the government’s foundation stone for the next big financial bubble, heralding an era of hyperinflation and probable further runs on the U.S. dollar. Of course, like most politics, there is usually a good reason and a real reason for actions.