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Politics : Welcome to Slider's Dugout
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To: SliderOnTheBlack who wrote (6705)10/18/2007 9:47:37 AM
From: jim_p  Read Replies (1) of 50739
 
Slider,

Nothing has changed in my view, the only issue has always been timing. The problem with inflation is increasing and the economy is continuing to slow. Wage inflation is a serious problem in developing countries such as China and India and it will soon show up in the cost of imports. Food inflation is here to stay for at least the next several years and energy supplies have not increased despite record high energy prices. This is the first energy cycle in history that higher energy prices have not resulted in increased supplies and that should tell you a lot about the future and where this market is headed. The credit crunch is still alive and well and is not going away with lower interest rates. The credit markets still need to develop a new way in which to create, package and distribute credit before this credit crunch will end and the banks do not have the balance sheets to expand credit and they will not have the ability to expand credit any time soon. Any expansion of credit will have to come from the FED, which will aggravate inflation if they take that path.

I'd stay long gold and gold stocks and stay short the market, but avoid being short tech (due to market rotation out of financials) and large cap multi nationals (due to foreign earnings). Short the small caps, financials, real estate and mid caps.

Jim
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