Hi DJ, I see possible serious recession (24 months) to mild depression if we are not careful, induced by unemployment, sharp decline in consumer spend, and continued reluctance of capex investment.
I see inflation of oil and all things tied to cost of oil, including food and transport.
I see deflation of all things worthwhile, including equity, bonds, real estate and manufactured goods not tied to cost of oil, such as Mercedes coupe; I see competitive rolling devaluation of all major currencies against each other, possibly against gold, certainly against platinum, especially if S.African mining workers health deteriorate further and Russia is business-like; and I see what you see concerning OPEC production problems, claimed, self-inflicted, and some genuine. Any one here have symbols for Venezuelan, Mexican and Canadian oil field owning company equities? The ones who can price gouge with impunity from nationalization?
The trouble now is if the politicians declare victory over terrorism, then we still face the intermediate consequences of victory, namely hog wild inflation serving no one's interest. No, even debtors will not be able to enjoy the fruits of inflation, because there will be none.
I hope we are wrong, and I really want to make a bullish case I can believe in, because our vision, like some religion, is just not fun.
Chugs, Jay |
