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Well, first of all his statement about ''velocity'' is false-to-fact. Money velocity started rising in 1966-1967, much to the dismay of any Veblenites, to whom the formula MV = PT is essentially a mantra (they tend to assume that V, velocity, is constant over an arbitrary period of time). By the time Nixon ''shut the gold window'' in two stages, 1971 and 1973, inflation was already well out of hand by the standards of the day, as witness Nixon's resort to the asinine statist concept of wage and price controls. Of course, Dec 1972 was the first oil crunch and 1973 was also the Great Grain Robbery and the start of the huge commodity bull runs of the decade (all the history you want on these, ANY time you want it; I was a futures broker in 1973, and there are some absolutely wonderful stories about mkts gone wild).

Second, his en passant redefinition of velocity as ''demand'', implied monetary demand, in context, is an outright crock. It's the REVERSE of demand, f'Heaven's sake -- velocity is the rate of exchange of money into goods and/or services; in short, it is NOT monetary demand, but a reflection of aggregate demand. I hadn't known that Kudlow was that economically illiterate, but perhaps I should have supposed so, given that he spends too much time with that garrulous self-promoting nitwit, Cramer.

That Kudlow has been an off-again on-again gold bug of sorts in inarguable; where he stands this minute, I've no idea, but it wouldn't be surprising if he were to be one of these ''$1000 or and Bust'' clowns.

Anyone who believes that inflation is not alive and well right this second is either purblind, pumping an agenda, or both. There are more commodity mkts at or near multi-decade highs (in NON-constant dollar terms) today than at any time in history. Further, this notion of ''core'' inflation is simply risible; the figure is useful only to those who don't eat, heat/cool their homes, or drive anywhere, and of course to theoretical economists, the market for which is one of the very few wherein supply ALWAYS exceeds demand.

Don't even get me started on Krugboy, except to note that a Marxist is always and everywhere a Marxist (please note my tip of the topper to Freidman in the phrasing), hence by definition insane (deffn: insanity -- the mental state characterised by making the same error over and over, and expecting a different result).

BTW, for a very interesting and likely profitable short-term trade, consider buying the Sep 30-year bond at-the-money straddle, specifically tomorrow about 10:00 CDT. With the FOMC meeting Tuesday and all the politico-economic flap (don't forget Venezuela here, either), chances are excellent to see a 3- or more-handle move in the bonds in 3 weeks' time. Also, the tagline trade is still a killer.

Best regards,

Yo SAJ!

I printed out your post and pasted it in my copy of Trading Options To Win.

You really got to consider compiling your posts into another book (suggested title "Seeing through Yellow Economics - How investors can gage the economy in spite of the biased media". I did a search in Amazon and got a huge pile of hits on investing, economics, and 'conservative' separately, but for 'conservative economics' all you get is an out of print Econ 101 text book and some diatribe by Pat Buchanan calling for raising import taxes and government control of consumption (a real conservative there).

But having a book on mining data off the internet, cutting through the hype and the crap, exposing clowns like Krugboy (love that name) would be golden. Then I could listen to you being interviewed by Laura Ingram. There's lots of books on investing, lots on how bad the liberal media are, but 'nobody knows nottin' when it comes to the 'jobless recovery'.

Just a thought.