sdavid0419

Why There's More Upside for Equities and Commodities

Housing prices were artificially high due to cheap money and the get rich quick house flipping schemes. Heck they rose so fast developers had to put up gas pump like signs where they could raise the starting from price almost daily. State and local governments had to put caps on the rise in property tax rates to protect people that bought their houses at the fair price. The housing collapse finally got that market to correct to the true reasonable prices (in my opinion they still could come down a little more). Any good housing news is just a good sign that market is returning to normal and by that I don't mean the go up every day and flip normal but the pre insanity normal.

As to unemployment I always prefer the U2 as a truer indicator as it includes those that are still un(der) employed but have fallen off the rolls as their unemployed benefits have expired. Every state has crumbling infra structure that needs immediate attention from dams and bridges to water mains, highways, and office buildings. Yet the Obama stimulus plan a year later has only dispensed half its funds. It took 2 seconds to dispense a trillion dollars to bail out wall street an act I despised as unwanted and unnecessary. Whats taking so long to put people back to work? The unemployed people contribute nothing to reelection campaigns and wall street uses the trillion dollar taxpayer gift to buy as much government as they can!!!!!

Inflation Likely to Win Tug of War with Deflation

Inflation has been under reported for years as the government has done everything from changing the way it is calculated to deliberately understating it and amending it up multiple times as less people are watching. Small businesses have eaten as much of this as they possibly could and then cleverly reduced the size of their products to hide increases in price. With the slow down in the economy the resistence to reduce prices is huge. In fact some are blatently raising prices that they feel they can get away with.

In the case of animal production for food we are seeing a dangerous situation where it is costing more to feed and raise an animal to maturity than they are fetching at market. Some are liquidating their stock creating a very short term period of cheap meat at the market. Short period that is since once we eat the cheap stuff there will be lots less meat coming in to replace it. I never thought I would see any cut of meat advertised at $10 per pound but that is happening more and more in the supermarkets.

The thing that amazes me is the given when governments print more money than revenues can cover it cheapens all of the money printed before it. ie. hyperinflation. This is a known economic law not an opinion or hypothesis. All of my friends keep telling me "I hope you are wrong" and are doing nothing to prepare for it.