Phil > what are your thoughts about the recent prognostications of Greenspan
To me, he is an amazing man and I don't care what anyone says about him. I'm not talking about what he does but the way he does it. And he takes responsibility, which is even more incredible especially considering Mr Blah who cannot even reply to a question at Q&A time. I am always most impressed at the way Greenspan sits in front of a room full of knowledgable people and answers questions off the cuff almost like a paternal schoolteacher.
Anyway, you asked what I thought about his prognostications? Well, there's no doubt he was very optimistic and it shows --- not in his face, but in the markets generally, especially in those stocks and commodities which could be considered hedges to the USD and the US economy. In fact, the market reaction to his speech has been so severe that it is possible we could see trend reversals in the USD and gold as well as other metals eg silver, copper etc. Further, the CRB index of commodity prices has come right "off the boil" and that, too, could easily reverse or stabilize. Gold shares are looking very weak too.
Indeed, I find the positive currency market response extraordinary especially when one takes into consideration the worsening situation in Blahland with servicemen fatalities now approaching 140 per month. The costs of the exercise must also be escalating hand over fist. And I'm not even talking about the BIG debts which seem to have vanished overnight as no-one ever mentions them.
It will be very interesting to see what happens when interest rates rise, as they surely will? That has to give the property market a smack and further, put a considerable squeeze on the finances of JoeSixpack. Accordingly, we are likely to see more insolvencies and retrenchments. That sort of stuff can't be good for the stockmarket either.
So, it seems the economic recovery will help the rich to get richer and the poor to get poorer. How do you see it? |
