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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Chip McVickar who wrote (7296)	1/11/2006 4:17:31 PM
From: robert b furman	Respond to of 33421

Hi Chip, I red it all very similarly. We have a global recovery - in more population centers than ever before,thusly the resource demand boosting prices.This is good old supply demand and it is growing and a good thing(energy and resources). Globalization has imported deflation.The destruction of union wages and power is best evidenced by this.It is a relentless power and by no means finished.As middle classes grow in third world and developing worlds there will be a slow diminshment of this deflation but in all avery powerful force as the rest of the world wants and claws out what we've had for many years. The pouring of cheap money to escape the jaws of deflation has over heated our realestate markets in USA.Actually Ireland and England are ahead of us in this.We had 9/11 and a slight recession while UK didn't have a recession - so their relestate has gone un bridled a bit longer. Their treatment to slow down housing was increased rates also.They've dealt with anverted curve in Australia and UK longer than we have-by about a year. The inversion is not that bad from a recessionary view - it must and is intended to cool off housing prices. It seems to be working. I'm very optitmistic and think that equity inflation is the next step.I'm really liking all of these breakouts.The one caution is that as we transition from a slow bottom feeding market to a breakout and into consolidation market - one must be more nimble. If you've been into accumulation over the last 6years - you'll do well.If you want to leverage up your paper profits (which is always tempting) one must be nimble. Breakouts are afaster market - so are shakeouts - be ready for both as they come together. These are excellent times. The inversion at this point doesn't bother me - The Fed laways follows - they've been leading as they corrected their imposed excesses.When they reach equilibrium (somewhere in here now) they'll get back to following the bond market - that's where the real money is. JMHO Bob