While I am not a strict monetarist by any means, I’m an engineer, not an economist, dammit,^*, I think that the fact that central banks are continuing to shovel money out of helicopters upon the financial markets will eventually create some very real, and potentially severe inflation.

In any case, if the spreads between two year interest rate swaps and treasuries hitting a record, 166.38 basis points, is any indication, all this money is not doing much anyway, except possibly pushing the dollar lower.

It’s not not doing much with real estate either, with US existing home sales falling 2.2% in August, and mortgage applications falling 10.6% last week.

This may be why S&P just cut WaMu’s credit rating again.

In energy, oil was down a bit on report of decreased demand, and retail gasoline fell for the 7th straight day.

^*I LOVE IT when I get to go all Doctor McCoy!!!