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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Mike Johnston who wrote (75028)	2/21/2008 4:40:38 PM
From: SouthFloridaGuy	Read Replies (3) \| Respond to of 116555

So what is your solution? What should the Fed do which would alleviate all the things you mentioned. To me you are implying that if the Fed were to raise interest rates to 12% or something like that, then food prices would go down because Indians and Chinese would begin to watch their carbs. I'm sure people will be worrying about a lot worse things then $3 gas, which is still way cheaper than Evian. By the way, I was just in Europe and it ain't cheap, even for the Europeans. They all want to come here.

To: Mike Johnston who wrote (75028)	2/21/2008 5:54:20 PM
From: roguedolphin	Respond to of 116555

Our wonderful SliderOnTheBlack coins the new term "Moflation"..... Message 24331174 From: SliderOnTheBlack 2/21/2008 6:52:01 AM 12 Recommendations Read Replies (2) of 8023 "The Era of Moflation" Inflation, Hyperinflation, Stagflation and Deflation. They are all - always and everywhere, a central banking phenomenea. Pick your "flation." Inflation? You'll find it at a 7.1% rate in China, 5.7% in the U.K. and nearing double digits here in the U.S. when you strip away the hedonic adjustments. Hyperinflation? Defined as inflation above 10% - you'll find it in nearly all commodities, in global money supply, and in food prices. China's food prices have risen 18.2% year over year. South Korea's import prices are up +21% year over year, and they stand at +15% in the U.K. and +12 in Russia. Commodities? Oil and Gold at record highs. Platinum going parabolic and cocoa at 34 year highs. Food stuffs from corn, to wheat, to soybeans - all soaring thanks to "phenomenal" central bankers... 18 of the 20 largest Central Banks have increased money supply at double digit rates. Australian money supply has surged +20%, China's +18%, and Canada's +12.3%. Stagflation? For stagnant growth + inflation - just look to the USA for the newest version of Stagflation 2.0. Deflation? Mortgage paper selling for pennies on the dollar, money markets frozen, and billions of dollars of write-offs and recapitalization injections from souvereign wealth funds. Derivative debt bombs everywhere you look + cratering housing prices - again, led by the good ole US of A. Pick your "flation" - they're all here. Yesterday, the markets reached a crucial turning point. Flation - be it in, stag, hyper, or de, flation - has now been not just accepted - but, embraced by the media. The media just capitulated on the "flation" story and the public will soon follow. Welcome to the era of -- "Mo-Flation." Momentum + pick your favorite "flation" = "Moflation." The momentum traders are now rushing into the "flation-trades." The two things this gold market has been missing all through this entire cycle are - capitulation by the media and the general public on inflation, and the broad entry of the momentum crowd into gold and commodities. I believe that yesterday, we saw an actual turning point and capitulation by the mass media on the "flation-trade." There is a massive amount of cash on the sidelines and the commodity sector stands nearly alone as the primary beneficiary of the momentum trade. Now is the time to scoop up small caps and laggards in your favorite "flation" sector. We saw what just happened in PAL and in Palladium. JP Morgan just upgraded Stillwater (SWC) and raised it's price target to $26 a share. SWC closed yesterday at $17.39, so that leaves another 50% upside to JPM's target in SWC. For those taking profits on the doubling of PAL, don't dump everything. Keep a few shares, and look to re-enter on any pullbacks and keep exposure in SWC and in Palladium itself, if you play the metals directly - as Palladium looks to be headed for a quick run through $600. For gold stocks... the HUI has been basing, and looks to be a coiled spring that has 550ish written all over it, and the headline we've all been waiting for... "Gold soars to $1,000." ...may be just days, or weeks away. The era of "Moflation" with $100 Oil and $1,000 Gold leading the parade has arrived. Buckle up, hang tight, and enjoy the ride. Mo later, S.O.T.B.