clip from Eric Fry
- "In theory, the Fed can decrease the money supply as
well as increase it," writes Andrew Kashdan of Apogee
Research. "In practice, however, the Greenspan Fed is
only in the business of increasing the money supply,
although the rate of increase can fluctuate greatly.
Now, of course, the money supply is expanding at such a
clip that it's swamping any increase in output. Hence,
the possibility, if not probability, of [resurgent]
inflation is omnipresent."
- Consistent with the bullish trends we're seeing in the
commodity indexes, the "resource economies" are faring
pretty well these days. As Greg Weldon points out,
"Australian and Canadian employment figures have been in
a virtual race to the upside, and have presented a
rarity - two countries that can boast of an uptrend in
job creation." Canada reported that 59,600 jobs were
created in August alone (for perspective, that's
equivalent to about 500,000 U.S. jobs)...Then recently,
Australia reported what Weldon labels a 'mammoth'
increase of 88,000 new jobs in August, 87,700 of which
were full-time positions. You don't see that kind of job
growth every day.
- "The Canadians and the Aussies part ways when it comes
to the effect of the jobs data on their currencies,"
Kashdan observes. "The Aussie has moved up smartly; not
so the loonie. Weldon speculates that geography and
Canada's reliance on the U.S. consumer is affecting the
behavior of the two currencies...If the global economy
starts to pick up and price inflation returns, expect
all the resource currencies to kick into high gear."
- But what's good for the resource currencies is not so
great for the owners of bonds. Bondholders beware. |
