NV,
Just noticed your comparing the Y2K "crisis" with the current energy situation. I will freely admit that I am far from an expert on the subject. However, it immediately occurs to me this is not a fair comparison. Y2K was an overhyped, imaginary "crisis" of which that firecracker fizzled into a dud. The whole thing was based on the fear that computers would malfunction when the year changed 2000....well, we all
know it was a non-event...other than it sure was nice of Uncle Al to pump the money supply fueling one of the most profitable trading binges from the long side ever which resulted in the parabolic top blow off in tech stocks...and a few others (bio, ...). On the other hand, and living here in California....the energy crisis (PG&E bankruptcy) is much more than a firecracker and it is already going BANG throughout the state. Much of the US "productivity boom" which supposedly fueled this new economy growth is largely in California Tech and is directly threatened....highly increased energy costs will cut into profits, blackouts threaten to slow and stop production....well, I think you get my drift that this is more than an overblown imaginary fear....it's happening now, my friend.
Also, I just peeked at a weekly futures chart for the dollar... it is quite possible that that instrument is now achieving a double top...having climbed back up from a nasty sell off, it is again vulnerable to another downturn. Not saying it will (the futures charts I have access to are too simple - no indicators such as stochastics to help guide me),
just pointing out that if you're banking on a strong dollar based on it's current position, that may not be the case in a month or more from now.
As far as inflation.... recent upturn in financials, utilities, energy, gold at the apparent expense of equities (oversimplified - sorry) may be warning that inflation may be picking up. Anecdotal type of evidence of rising everyday expenses such as gasoline, rents (well...Calif anyway), food, electricity, natural gas.....I just don't see things getting cheaper at all - quite to the contrary.
I'm not trying to create a doom and gloom scenario but it appears obvious to me the economic landscape is gloomy none-the-less. Throw into the mix the increasing unemployment and mounting layoffs.........I think there is ample reason to be concerned about future prospects.
Sure, I hope things improve for the better soon, but it really doesn't look all that rosy to me right now...not enough to dismiss inflation fears all-together.
JMH(humble)O
Regards,
Eichler |
