Spiga

Markets, Elections, and the Dollar


GOOG is now down 33% from its high, the tech stocks are off the highs, all indexes are testing major support, and Hillary Clinton beats Obama. So what is next for the market?

I still stand by my predictions that 2009 will host the worst part of the beginning of a global economic change not seen in several generations. We should see our markets crash into the fall of 2008 and my Dow target before 2009 is below 10K.

There is a global chaostan exploding in the world by many who are profiting from the current bull market in commodities. From the Middle East to South America, things are geting HOT.

A disturbing fact not being talked about in the media is the price of Diesel Fuel. Once the cheapest fuel, a gallon of the D is costing over 4 dollars a gallon in many parts of the country, that is higher then Super Unleaded. Everything runs on Diesel that needs to move anywhere, from ships to trains and heavy machinery and trucks.

And the CPI figures are finally shooting into levels not seen for a decade. All while the Fed pushes on a string.

And why does the Fed cut, risking the dollar value? Because we are now at Systemic Risk - the very breakdown ONmoney discussed many posts ago. If people don't borrow, the Ponzi crashes, its that simple. Crushing the dollar makes the debt worth less (and more manageable for those oversees investors that are loosing out). It also give our exports a chance to rebound and help GDP figures.

That is more important then dollar value at this point. Citi is for sale, our banks are in turmoil and the petro dollars are coming back to buy chunks of the good ol US of A. Corp.

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