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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 375.93-1.8%Nov 14 4:00 PM EST
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To: TobagoJack who wrote (44128)12/21/2008 1:36:35 AM
From: Hawkmoon  Read Replies (1) of 217774
 
Good point and reflective of the deflation we're continuing to see globally.

Can you REALLY perceive inflation to be a risk until we see economic activity (monetary velocity) finding a bottom? Massive liquidity injections will not cause inflation until velocity of financial transactions recovers. At that point the Central Banks will have to act to drain liquidity from the financial system to compensate. And the Baltic Dry Index is certainly a leading indicator and it's not showing a bottoming of diminishing demand so necessary to predict future monetary velocity.

I hope those folks who were buying DRYS over the past several weeks know what they're doing... ;0)

And don't get me wrong.. I would actually like to see some inflation building in the global economy as it would cause money to flee bonds and seek those sectors that would benefit from a revival of economic activity and trade.

Btw, did you get any further information on retail demand in China since last month? I'm still not buying that 22% increase they reported unless there's a perception in China that they are looking at devaluation of their currency and deciding to buy in advance of that.

Hawk
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