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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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To: ild who wrote (2615)	11/26/2003 8:41:37 AM
From: russwinter	Read Replies (3) of 110194

Quite a piece on inflation in the 11/25 Contrary Investor note commodity prices: yr/yr rate of change fats and oils: 43.9% foodstuffs 11.4% raw materials 23.2% energy 11.9% grains 9.4% metals 34.0% Take look at what the freight rates are to ship this stuff around the world. can you say "parabolic"; quote.bloomberg.com Inventories of copper are running low, nickel and tin are practically out. Another ho hum 1.5% drawdown of Cu inventories just in the last day. metalprices.com China uses it, and it takes material to build all those unnecessary second and third spec and "rental" homes here. OECD commercial oil stocks are very low, and this is at a time when major suppliers like Venezuela, Nigeria and of course the Middle East could blow up at any time. And China is on an energy use roll. That's why I'm "long" (own the stocks out right) the energy sector. Cheapest sector in the market, still discounting something: $22 oil, $3.50 gas? It will be interesting to look at natural gas use to heat all these oversized houses coming on line. Even when they're empty it's not a good idea to turn the heat off during a big freeze <ng>. There will be a squeeze there that puts us in even more deep doo-doo. The energy bill that failed was mostly just a big pork barrel feast, doing little to deal with the problem. And I'm sure when the problem hits it will be blamed on "terrorists', or some "the dog ate the homework" excuse. Our whole country is dominated by sycophants, it's shocking. Meanwhile as CI discusses the Fed uses bogus numbers, the core consumer price index (CPI) to try and claim inflation is low. They would have you believe it's only 2%. But even if it's really only 2% (which is nonsense) they still shouldn't have a fed funds rate of 1%. Now coming up on 26 months with a fed funds rate less than core CPI (even if you choose to use that bogus number). So they just print even more money, and since our real economy can't use it, it just flows into the financial markets as speculation. Message 19537308 That's why you see melt-up days like Monday. And runaway inflation I might add.

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