China’s economy grew by 7.9% in the second quarter, exceeding most analysts’ expectations, and lending credence to Beijing’s goal of 8% annual growth. Now, with the nation awash in liquidity and the economy picking up steam, the only task ahead of the central government is deciding when to rein in lending and let the economy stand on its own two feet.

A debate over the future of the U.S. Federal Reserve is taking place in the halls of Congress.

No one person is responsible for the credit crisis, the failure of investment banks, the insolvency of commercial banks world-wide, the implosion of the world’s stock markets, or for leading us to the precipice of another great depression.

According to the new book Outliers by Malcolm Gladwell, countries that have high PDI’s (power-distance index) respect authority more and are less likely to speak up to or challenge superiors. The evidence cited is the case of a Korean Air flight where the first officer (the co-pilot) knew the plane was in serious trouble, but out of  perceived ‘respect’ for the pilot, was slow to suggest otherwise. The result of the first officer’s lack of speaking up was the plane crashing into the side of Nimitz Hill.

The dollar continues to rally…  Obama bounce picks up steam…  ECB and BOE meet this week…  Brazilian reals on a roll! And Now… Today’s Pfennig!

Job market takes another turn for the worse… unemployment data at 26-year high… Government solution:spend… budget and trade deficits swell more than expected… Byron King on falling oil demand… and what it means for long-term investors… Gold soars… Ed Bugos with some fresh price targets… Signs of the times… Chinese bank opens in U.S., world’s biggest LBO collapses… Plus, Chris Mayer on the automaker bailout

Under Bernanke’s direction, the Federal Reserve has completely rewritten its mission. Many articles in the International Speculator and The Casey Report have reported the strange growth in the loans they have made and explained that Bernanke has, for a long time, espoused unconventional actions to avert deflation and to expand the economy. So the charts below tell that story, and it is truly amazing.

From Bloomberg:

A U.S. Securities and Exchange Commission investigation into credit-rating companies found the firms improperly managed conflicts of interest and violated internal procedures in granting top rankings to mortgage bonds.

A week that saw the war on taxpayers expand onto to several new fronts also saw US Senate Republicans win a pitched procedural battle to keep gas at the pump grossly inflated.

“When I use a word” said Humpty Dumpty in Lewis Carroll’s “Through the Looking-Glass,” “it means just what I choose it to mean, neither more nor less.” It has always been the ambition of Wall Street to bring its financial statements under a similar type of discipline.