The End of Sanity By Ed Robinson.. Now just want to ask this simple question on this end of sanity!
We have the origin of this run based on premises that it is all about service based sustainable form of growth that has very less to do with Oil.. it has more to do with silicon chip and rather molecular chip, the size is of no consequence, the waste that has become a serious issue of the development from the industrial age is now the story of the past as we move forward so would be the emissions of the hazardous gasses..
Next let us find out Lee can do for us, the traditional Oil price run viv a vis this bull run, Oil has been as high as this just 18 months back, it was than all about the deflation and falling prices worries that created exactly opposite 'insanity'. Oil at highs may introduce some arrest to this continued downward spiral of price overall only commodity brings that 'consumer' demand globally that will take the burden off US shoulders.
Last but not least commodity basket at 185 was at all time low, now tell me how could that continue? Falling prices created that threat of financial meltdown as emerging markets were unable to service their debts. A move of ten percent in commodity even 30% will only have a slight impact on inflationary pressures in US as finished goods have 70% wage elements and 30% commodity, so inflationary pressures arising from commodity price rises will be contained.. On falling $ and its impact on economy, $ is cheap compared to Yen but otherwise against all ASEAM countries it is much more stronger even against Euro it is at 1.05 and we are expecting a parity with $, so yen alone will not bring that imported price stability to a halt, the reason for $ stability are structural, the convergence criterion of Europeans have been well adopted by US. :low and reducing debt instead of high rising hockey stick type chart of previous years. The budgetary deficits are well contained, the TB auctions are less frequent, the most wasteful user of resource that is the government is not sucking capital out of the markets. The low interest rate environment and low taxation along with low inflation has resulted in this ?insanity?. Tax and spend is a dismissed notion, we live in an era where price rises cannot be passed, one thing we have seen is that border-less world had become very competitive. If someone is charging you more you go and find the cheapest supplier, one other thing I don?t understand in the world we are seeing falling prices of everything that we like to own. Like personal gadgetry from my organizer to my mobile I see prices falling and volume increasing the things that belonged to few rich only are now on domain of every one that is true sustainable form of prosperity, that is where Iridium failed, markets cannot be built on few and big consumers, the new economy finds its roots in everyone inclusive approach, from games to sophisticated CPU?s we are all in a process of flux and continuos change, as far as market are concerned we will see huge movements but nothing to worry from that we move slow and steady higher rather we should be able to prepare and play this volatility if you cannot you will be loser in the market and therefore don?t invest if you cannot play the other side..
This is the strangest kind of market for me the most volatile and hence needs special skills to operate I would recommend special hedge type trading with a bias on the upside like I have done and promoted on this thread, on a down day we than don?t look stupid and insane.. |
