Send in The Clowns
Send in the clowns...
Jim Rogers: The "clowns in Washington" have "signaled to the world they don't care about the U.S. dollar."
The commodities rally, which Rogers correctly predicted in 1999, may last 15 more years. Oil may reach $150 a barrel during that time.
Bring on the clowns...
Congress will miss the Oct. 1 deadline for passing the 2008 budget.
Lawmakers have failed to pass any of the 12 spending bills needed to keep the government running when the new fiscal year begins on Oct. 1.
The measures call for at least $22 billion more in domestic spending next year than the $933 billion proposed by "the resident clown".
Democrats argue that the $22 billion difference is small, just 2.4% of $933 billion domestic discretionary budget and less than 1% of the total $2.9 trillion federal budget.
"The Resident Clown" said that amount would grow to $205 billion in perpetual spending in five years, requiring a tax increase.
The resident, incompetent, incumbent, village idiot, head clown, Dubya Shrub:
"At a time when families are working hard to pay their mortgages, pay for their children going to college, now's not the time to be taking money out of their pockets."
Of Pick Pockets and Clowns, the Nattering One muses...
The Fed cuts will benefit: exports and multinational profits through Forex arbitrage on a lower dollar;
the stock market and banks through lower Fed Funds & discount rates; and as previously mentioned on many occasions...
the holders of high yield junk paper, insurance companies & pension funds, through HIGHER long term high risk paper yields.
Already under massive pressure, the dollar is tanking to all time lows. Long term interest rates (10 year yield from 4.32% to 4.65%) have risen, and may continue to rise. Why?
Inflation or stagflation is not measured excluding food and energy. The "advertised" rate of stagflation, including energy & food, is 5 - 7%.
According to the government spin or lie, CPI, since 2001...
health care has inflated 17%, while wages gained 19%. The reality is health premiums rose 78%, while wages have been negative over the period.
The real rate of stagflation is approaching 15% and most people of intelligence, including foreign investors, realize this.
And, the bond markets are just starting to reflect this in long term yields.
A plunging dollar has and will, continue to raise the price of all commoditized inputs, especially crude oil.
Crude is already at an all time high and should head for $90 in the near term. $100 a barrel by next summers Olympics in China, would not be out of the question.
Exporting Stagflation & Deflation... something else we have commented on in the past.
The Chinese are already supplying some goods, at a loss. Why?
They must create 250K new jobs per month to keep the population in line. Why? A starving population might rebel.
Preview of the not too distant future... our senior citizens & their grandchildrens job market...
These jobs have 60 to 70 hour work weeks, the "workers" live in 16+ bed dormitories, and earn less than $50 per month, while facing unemployment if they are injured at work.
China will be "sterilizing" their exported "inputs" stagflation by manufacturing more goods at greater losses. That's not a misprint or typo.
China will keep the factories humming, even at a loss, and they can afford to. China's reserve account surplus is estimated at $1.5 Trillion with reserves growing on the order of $1 Million per MINUTE.
Bottom line, what is left of our manufacturing base and Europe's (due to a higher Euro) will be decimated...
in the next 3 years by rampant durable goods deflation coming from China. The UK economy is also housing and "money shuffling" (finance) dominated.
A plunging UK Sterling Pound, falling housing prices (-2.6% last month) and their own bank solvency crisis (Northern Rock, Barclays) won't help matters either.
Meanwhile, commodities prices will increase further, while foreign investors & goverments slowly diversify from dollar & sterling denominated assets.
Both will drive long term bond yields higher to reflect the true rate of stagflation.
This will further collapse all that remains of the emasculated service & debt based US & UK economies, the housing market.
Jim Rogers: The "clowns in Washington" have "signaled to the world they don't care about the U.S. dollar."
The commodities rally, which Rogers correctly predicted in 1999, may last 15 more years. Oil may reach $150 a barrel during that time.
Bring on the clowns...
Congress will miss the Oct. 1 deadline for passing the 2008 budget.
Lawmakers have failed to pass any of the 12 spending bills needed to keep the government running when the new fiscal year begins on Oct. 1.
The measures call for at least $22 billion more in domestic spending next year than the $933 billion proposed by "the resident clown".
Democrats argue that the $22 billion difference is small, just 2.4% of $933 billion domestic discretionary budget and less than 1% of the total $2.9 trillion federal budget.
"The Resident Clown" said that amount would grow to $205 billion in perpetual spending in five years, requiring a tax increase.
The resident, incompetent, incumbent, village idiot, head clown, Dubya Shrub:
"At a time when families are working hard to pay their mortgages, pay for their children going to college, now's not the time to be taking money out of their pockets."
Of Pick Pockets and Clowns, the Nattering One muses...
The Fed cuts will benefit: exports and multinational profits through Forex arbitrage on a lower dollar;
the stock market and banks through lower Fed Funds & discount rates; and as previously mentioned on many occasions...
the holders of high yield junk paper, insurance companies & pension funds, through HIGHER long term high risk paper yields.
Already under massive pressure, the dollar is tanking to all time lows. Long term interest rates (10 year yield from 4.32% to 4.65%) have risen, and may continue to rise. Why?
Inflation or stagflation is not measured excluding food and energy. The "advertised" rate of stagflation, including energy & food, is 5 - 7%.
According to the government spin or lie, CPI, since 2001...
health care has inflated 17%, while wages gained 19%. The reality is health premiums rose 78%, while wages have been negative over the period.
The real rate of stagflation is approaching 15% and most people of intelligence, including foreign investors, realize this.
And, the bond markets are just starting to reflect this in long term yields.
A plunging dollar has and will, continue to raise the price of all commoditized inputs, especially crude oil.
Crude is already at an all time high and should head for $90 in the near term. $100 a barrel by next summers Olympics in China, would not be out of the question.
Exporting Stagflation & Deflation... something else we have commented on in the past.
The Chinese are already supplying some goods, at a loss. Why?
They must create 250K new jobs per month to keep the population in line. Why? A starving population might rebel.
Preview of the not too distant future... our senior citizens & their grandchildrens job market...
These jobs have 60 to 70 hour work weeks, the "workers" live in 16+ bed dormitories, and earn less than $50 per month, while facing unemployment if they are injured at work.
China will be "sterilizing" their exported "inputs" stagflation by manufacturing more goods at greater losses. That's not a misprint or typo.
China will keep the factories humming, even at a loss, and they can afford to. China's reserve account surplus is estimated at $1.5 Trillion with reserves growing on the order of $1 Million per MINUTE.
Bottom line, what is left of our manufacturing base and Europe's (due to a higher Euro) will be decimated...
in the next 3 years by rampant durable goods deflation coming from China. The UK economy is also housing and "money shuffling" (finance) dominated.
A plunging UK Sterling Pound, falling housing prices (-2.6% last month) and their own bank solvency crisis (Northern Rock, Barclays) won't help matters either.
Meanwhile, commodities prices will increase further, while foreign investors & goverments slowly diversify from dollar & sterling denominated assets.
Both will drive long term bond yields higher to reflect the true rate of stagflation.
This will further collapse all that remains of the emasculated service & debt based US & UK economies, the housing market.
Comments
I have to read your blog every day, cuz nobody else seems to find the right measure of dark humor in the markets.
"Other than that Mrs. Kennedy, did you enjoy the motorcade?"