highmax

Dr. Copper Spots a Monster Crash

If China de-pegs their currency in six months time, that would make buying these commodities they supposedly need so badly much cheaper depending how much it appreciated. Why wouldnt they wait till then to stuff their warehouses? Maybe they are?
It would cause quite a crash in all asset prices!

www.bloomberg.com/apps...

Options Trader: 25% Off the Top Tuesday

Great article and funnies, thanks. I like your reference to GFCF (Gross Fixed Capital Formation) being the dominant driver of GDP growth in China, estimated at 50% of GDP over the last 12 years..no other Asian country ever reached that level or had a capex boom over 9 years in length, as the Asian Flu of 98 ended much of them. Something to think about..

Jim Rogers on the Next 10 Years

Near term could get interesting if the Chinese start consuming more, saving less and start running trade deficits. Then they wont be inclined or probably able to finance the U.S. deficit and interest rates will start to kick upward, meaning higher cost of capital as it becomes scarcer worldwide. Could lead to new round of QE, just when Treasury wants to start reining in the deficit.

Two Good Economics Books: Spin-Free Economics, Animal Spirits

Austrian school..interesting that Drucker lived and taught and wrote the latter part of his life in California, but his lessons arguably were ignored there more than anywhere.

Joblessness Drops? Hold the Applause

cont: instabilities, and so on. If or when said mood changes, That is when these statistics will start to matter.

Joblessness Drops? Hold the Applause

According to Prechter, the social mood determines the markets rise or fall moreso than statistics. Thus, this rally can shrug off the bankruptcy of GM, start of quantitative easing, near BK of California, ongoing financial

Green Shoots: Starting to Wither...Soon to Die

I think 'green shoots' thinking should shift to 'green Smoot's' in light of rising protectionism as in 'buy China' and 'buy American'.

Five Points to Eliminate Confusion About the U.S. Macroeconomy

To understand how economists go about their work, Gary North's "Economist's Crucial Technique", GaryNorth.com/free materials/economic analysis shows the inside secret.

Monetary Madness in a Single Chart: Hyperinflation's Just Around the Corner

I do not agree hyperinflation is inevitable because the level of consumer indebtedness has been reduced by only $178B over the last quarter in which weve seen the money supply expanded by over five times as much. Since wages are sinking, unemployment is rising, commodities are for the time being rising, combined with the precipitous overhang of debt any marginal incremental cash injection that does reach the consumer must be used to reduce such debt. Real wealth can only come from savings, not consumption, so a long readjustment period will have to take place during which deflation is the more likely outcome.

This guy is on the right track. Money will be DEVALUED, truly it already has been greatly eg: in Canada since last summer B of C holdings backing the loonie have switched from 100% AAA Gov Bonds to include about %40 bank questionably toxic and non-marketable assets and consumer debt. Interest rates have to increase to accomodate the increase in risk.

>Not to dminish Laffer's points but he didn't see this coming in 2005 and 2006 when he said the U.S. economy was stronger than it's ever been.

We need to stop calling rising prices inflation. Inflation is growth (just like blowing up a balloon - a bubble) in the money supply. This growth causes a decrease in the Purchasing Power of Money (PPM). Laffer states in his article the Fed signaled a 180 shift from an anti-inflation position to an anti-deflation position. The Fed has NEVER been anti-inflation and has ALWAYS been anti-deflation. Unless you know of any one else besides the Fed who can create money either by printing new paper slips (Federal Reserve Notes) or increasing member bank reserves (expansion of bank credit) only the Fed can create inflation.

Why do we continue to discuss the Fed as if it is sometimes "hawkish" on inflation. The purpose of the Fed is to be the "lender of last resort" and to inflate the money supply. Here's a quick peice of trivia: since 1913 the U.S. dollar has lost approximately 96% of its purchasing power under the watchful eye of the ever hawkish Federal Reserve Bank whose initial mission was, get this, price stabilization. In the 93 years prior to the birth of the Federal Reserve Bank (1820-1913), a terrible time for sure since there was no Central Bank run by geniuses whose very words were worshipped by the chattering classes, what cost $1.00 in 1820 cost $0.63 in 1913 due to increased productivity and the growth of goods and services in the market place competing for dollars. This was a time when money still had both of its original purposes (1) a meduim of exchange and (2) a store of value. It is no longer a store of value thanks to our wise rulers in Washington D.C. But I digress.

Laffer's predictions are most likely true which proves one can actually be right, some times, even for the wrong reasons. Currency devaluation is a better description of what lies ahead and it will entail both rising prices and rising interest rates. It will be very interesting.<

Three Charts To Ponder: Oil Services, Oil, and the Pound

Anyone who cares to pay attention would know the housing slump has seemingly reached British shores now and thus a slump in the pound is an expected outcome. Therefore acting on this chart which was wisely included IMO is probably a prudent course of action at the present time. A trendline drawn along tops indicates resistance, yes?

Penn West Energy Distributes High Income Rate to Shareholders

P & F chart target is $11?! I would not touch this right now.