Will $1,000 gold & $100 Oil=Ron Paul Presidency?
Good posts & thoughts...and nary a food fight.
-- whodathunkit?
To reiterate... in my opinion, Bernanke Blinks,
and cuts again, this time just .25 bp.
#1. The US wants and is managing the
Dollar lower.
...a controlled, managed descent is the key.
... 40-45% of S&P 500 earnings now come from abroad.
U.S. multi-nationals are profiting greatly from a
weaker U.S. Dollar.
#2. There's just -- no possible way -- that the Fed
is..."one cut and done."
...and don't forget, this is an election year - so,
time is of essence. Given the 6 month lag effect of
rate cuts working their way through the economy, the
Fed has little time to waste.
#3. Housing weakness is accelerating. 40% of all
new job growth since 2001 came from housing and
finance. While the Fed cuts will not cure the ills
of a debt and credit orgy gone bad... they can
soften the landing and prop up consumer sentiment
and spending.
Core inflation (using the Guberment's numbers) is
still contained in the Fed's view... so the window
remains open for 2, even 3 more cuts in my opinion.
The key will be if they can continue to manage the
dollars decline, to keep gold silenced, and to find
a way to halt the rise of oil.
Wages have a natural cap via global outsourcing, so
this is not the same inflation battle of the late 70's,
early 80's...but, gold and oil are speaking volumes
about the realities of central bankers gone wild.
It's really going to be an interesting 4th quarter
for gold. Commercial shorts and open interest at/near
all time highs. Gold's voice grows ever louder and more
broadly heard with every new rally. With oil prices
setting new highs...
Every central bankers nightmare are these two headlines:
"$100 Oil!"
"Gold Hits Record Highs!"
...and every lead story starting with the "i" word -
Inflation.
Here's my next poll question:
"Will $1,000 gold & $100 Oil = a Ron Paul Presidency?"
Mo later this weekend,
S.O.T.B.
PS: Jim P ...
The enemy has been allowed to keep making
their mistakes... more fissures appearing daily.
Bank of America, Wells Faro, Citi, Washington Mutual,
the $100 Billion SIV bailout and now the tanned
posterchild, prince of subprime himself -- Angelo
Mozillo is being investigated for his stock dump.
Imo, it's hard to win the initial battle when the
enemy has rallied all it's forces and mounted a
full frontal attack.
But, now... they've had to divide forces and fight
on multiple fronts...
Oil prices exploding, Gold signaling rampant inflation,
credit crunch not going away, housing collapse accelerating,
slowing US economy, DOW starting to weaken, geopolitical
worries in Northern Iraq, the US Dollar falling too far -
too fast for our trading partners (and debt holders), and
an election now just months away...
The question will be... which gives us the greater
risk:reward upside -- confronting central banks
head on with shorts of financials, the dollar, and the
broad market.... or riding the coat tails of gold & oil ? |
