Wednesday, May 11, 2011

Back on Your Heads

Posts like the last several days worth are so much fun for me that it's easy to not look at the world outside.  Yes, I'm still reading the blogs and following the regular folks I visit (most of the list at right - I have a tendency to not visit every day if the author goes through a period of not posting everyday, and then can get really behind).  It's just more fun to talk about guns, space flight, and caliber discussions, even "hey, how messed up is that market?" than to talk about the approaching endarkenment (as Billy Beck so memorably phrased it). 

There are weird goings on in the market.  Look at the recovery in the dollar (from
The dollar is up (against this mixed basket of currencies) around 3.3% since its low.  Why?  I don't know, but it definitely looks out of place, doesn't it?  If you just continued that ramp to the right, the dollar should be in the low 72s or high 71s now.  That's territory it has never been in, so the world may be saying they don't believe the US is ready to collapse just yet.  Or the world could be buying dollars because of the old, "least disgusting girl at the dance" effect.  The EU is in trouble, Greece is talking about pulling out of the EU again, as Brussels is telling them to sell off part of the country to pay back their deficit, and more.  The Chinese economy is suffering from the inflation we're exporting to them, and the Shanghai Exchange is getting ready to do something big (from Stock indices can't stay in flag pattern wedges like that past the pointy part. 
Or the dollar could simply be having a dead cat bounce and the planned devaluation will continue soon.

Oil prices going down might not necessarily be a good thing - strange to say.  Part of the drop is the dollar getting stronger (that would take oil from $103 to $100 by that reasoning), part of the drop is that the $4/gal. average (within a few cents) does act to lower demand in the US as it makes life a bit more unpleasant here, and lower demand from the rest of the world can account for all of the drop, which is about 10%.  It's that last one that concerns me - it's saying the whole world is still economically shaky at best.   

We can debate for days whether or not the US economy is actually recovering.  I simply think that if you measure all of the parameters they do in dollars, inflating the number of dollars makes those things look better.  Unemployment (the real number, not the widely reported one) is still close to 20% nationwide, with pockets of worse than that.  Even liberal media (but I repeat myself) are now reporting on real inflation vs. what the reports.  When MSNBC, of all places, puts out a story like this, you know people are sensing the smoke being blown up their butts. 

Meanwhile, the Mississippi flood continues to expand, with the Weather Service (NOAA) predicting a flood level at Natchez about 4 1/2 feet higher than the previous record from 1937!  It's already above that level.
This has the potential to be a real SHTF event with national repercussions.  If those gasoline refineries on the Mississippi get taken out, $5 gas will be a "good old days" memory.   

When I look at these few things, the dominant thought I get is "it just can't last".  We seem to be in the calm before the next storm.

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