Just a quick note to let everyone know that I am sick as a dog. I apologize for my absense. And uhhnh..no.... I haven't decided to hole up in a bunker with guns and gold:) (not yet anyway).
I may be away for a few more days depending on how I feel. There hasn't been to much to discuss recently anyway.
The recent move in Gold is an interesting one. We are back up near the recent highs of around 1020 or so.
There are rumors swirling out of England that oil may no longer be priced in the US Dollars.
It's becoming increasingly obvious that the world continues to slowly but steadily lose confidence in the US dollar. The Fed has no problem with this as long as its controlled because it helps them in a variety of ways. They want reflation/inflation because it helps asset prices hold. It's also been pretty bullish for the market....For now that is. That will change if oil gets back up to $140.
At the same time, the consumer is creating tremendous deflationary forces on the US economy as they lose their jobs and their wages decline or stay flat. U-6 unemployment is now a staggering 17% folks.
The unemployment rate for young workers is now closing in on 50%! Although the market moved nicely higher today, the market has been pretty choppy lately.
The recent move higher in equities appears to be as a result of the falling dollar combined with fund managers that are forced to chase prices here in order to keep up with their rivals.
The bulls also expect to see strong GDP growth in Q3 and Q4(I tend to agree) because the comparables from last year are going to be pretty easy to beat.
The question you need to ask yourself here is has the market already priced this in? Could this be a sell the news event when the topline of these companies remain flat or declining while profits increase?
Another question you need to ask is has the "cash for clunkers" and the "first time home buyer rebates" taken some growth out of the economy for the second half of the year. Could we see surprises on the downside?
I am leaning towards mildly strong growth heading into the end of the year because the financial system almost came to a halt last year. This kept everyone including businesses and consumers on the sidelines.
That's about it for me tonight kids. I need some ZZZ's.