Get the Plungers!

One positive thing you can say about John Snow is that he had absolutely no effect on US treasury policy. That's a good thing. Neither did his predecessor, Paul O'Neill. It seems when the powers that be want just a neutered mouthpiece to go around making speeches they appoint a former industry leader like Alcoa's O'Neill or CSX's Snow.

In the other case when manipulation of markets are required, like now, A Wall St. master is drafted. Take for instance Bob Rubin. Rubin was a Wall street guy (still is) that understood bonds in ways no mere mortal could. During the Clinton years he bought back government debt with one hand and reissued it at lower rates with the other. This created the illusion of a "surplus" still boasted about by the Dems. It made us feel better and in a confidence game, confidence is the main ingredient. We were in deep debt then, but Rubin's genius made it look like we were paying it off. We weren't really, and that debt has ballooned during the current administration. Without a Wall St. svengali around to cover it up it shows.

Enter the new Wall St. genius;
And I don't mean that facetiously. Is it really a coincidence that the day after the drafted Hank Paulson burst onto the scene the dollar made a leg up, precious metals and commodities are diving and there are unexplained movements in the physical and financial markets? Me thinks the plunge protection team is firing on all cylinders. In order to save the dollar they have to drive the prices of commodities and precious metals (real money) down, and make the stock market rally to create the illusion that worthless paper money has value. As powerful as they are, their effect is limited and the trend will resume. We'll see how it plays out.