Summary: Oil prices fell sharply last week on fears of serious recession as well as signs that the U.S. is prepared to cut a deal with Iran. The media gave lots of coverage to the former and very little to the latter. After years of saber rattling, the Bush administration sent its third-ranking diplomat to Geneva to meet with the Iranian diplomat in charge of the nuclear program negotiations. It was also revealed that the U.S. is setting up an "interest section" in Teheran for the first time since 1979. That is an office that represents a country's interests when that country doesn't officially recognize the other.

What seems to be happening is that the old U.S. establishment has decided to cut its losses in Iraq by arranging a face-saving force reduction with help from Iran so that it can shift military resources to the war in Afghanistan. The war against the Taliban is going badly. Note also that the Taliban is an enemy of Iran.

The good news for the economy in all this is that we have a chance of having only a severe recession/depression instead of a complete collapse. If the United States can behave itself a bit more internationally and the banks and consumers ease up on some of the more obscene excesses, they might let Americans keep eating...

Summary: Except for the 3% rise in gold against the dollar, market movements weren't drastic last week. But that doesn't capture the fear in the markets and in the media that things are close to getting much worse. The collapse of "IndyMac", the near collapse of Fannie Mae and Freddie Mac (such cute nicknames!) stoked that fear at the end of the past week.

It began on Thursday when the stocks of Fannie Mae and Freddie Mac plummeted. Fannie Mae stands for FNMA or the Federal National Mortgage Association and Freddie Mac stands for FHLMC or the Federal Home Loan Mortgage Corporation. In a nutshell they guarantee mortgage debt. $5 trillion of it. Half of all the outstanding mortgage debt in the United States.

As long as most mortgage holders are paying their mortgages off, the system works fine and Fannie Mae and Freddie Mac help free up lots more money for new mortgages, making house purchasing available and more affordable for people. But they are publicly traded companies. Their stock price in times like these, where it is not at all certain that people will be able to keep paying on their mortgages, can drop fast.

What happens if they crash? Why, the US government steps in and bails them out! But how can even the government guarantee $5 trillion dollars in bad debt?!

Only those who have gone too far know where the limits should have been

Money served throughout history as a medium of exchange and as a storehouse of value. But when gold and silver coins were replaced by paper currencies, money no longer was the same. Paper money, no longer having intrinsic value, now functions only as a medium of exchange, a function that degrades over time.

The value of paper money continually loses value because the constant printing of paper money constantly dilutes the value of previously printed money. The more paper money printed, the less paper money is worth; and today, money is being printed at a faster rate than at any time in history.

In fiat paper money systems, today's paper money will be worth less than tomorrow's and will be worth less the day after ad infinitum. This constant degradation of paper money is known as inflation. When the process rapidly speeds up, it is known as hyperinflation. Remember that word.

When you enter this, "Les Visible" in Google you find my web page as the first possibility. When you click on it some strange things happen. They happen to me and they happen to other people. That is the only reason that I know something strange happens. I don't go there usually. It's just a page with links to what I do and I already know how to get to those places. Other people go there and then they tell me about the anti virus installer that appears. Strangely, when you just type in www.lesvisible.com everything is okay. So...

This has gone on for a while now. I kept asking my host to fix the problem. I didn't know what the problem was. Maybe the problem wasn't my host because they couldn't find anything. I'm not a geek. Picture me as a guy on his hands and knees, feeling for the wall, looking for the light switch and trying not to cause harm on my way to seeing what is going on... feeling my way.