Skip to comments.Daily finance & investment thread (2-4-13 edition)
Posted on 02/04/2013 12:01:05 AM PST by dennisw
Daily finance & investment thread
Trying to focus on the markets for today and each day and the economic news
A number of people have talked about such a thread. Lets see how it goes. This is where you can impart some investment wisdom to your fellow freepers. You can vent about the big one that got away. You can chime in how Obama is out to wreck American capitalism.
If you see another FR economic thread you like and want to link to it here, please do
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We are close to the end.
The bond market is going south along with the dollar.
This should be good for stocks except stocks already look toppy.
Crude oil is near 100 dollars in the dead of winter when crude should be near a minimum.
Bottom line, inflation is dead ahead (falling bonds, weak dollar, high crude, stocks holding ok only because they are somewhat of an inflation hedge.)
The fed will then be in a pickle. Can’t raise rates or the economy dies and federal debt explodes. Can’t do QE5 because that is just throwing gasoline on a fire.
That is when the end comes. I think it comes before August. Plus gas at 3.50 in January puts gas at 5.00 or more in June. That will not make for happy times.
A likely scenario but 2-3 years out in my opinion. Give the Federal Reserve 2-3 more years to play out this farce before it blows up, this money shuffling game where it buys a trillion in USG debt each year
“Plus gas at 3.50 in January puts gas at 5.00 or more in June.”
Not to mention what happens if/when the Middle East heats up again.
DO not depend on inflation coming anytime soon.
Why? 2 Reasons...
China, India & SE Asia factories are running UNDER capacity. They can supply all the goods and services to absorb every dollar Bernanke can print. Anything that can be manufactured will not inflate. Oil, land, & food will keep inflating since supply is limited.
2nd reason...Fed must keep printing money to keep interest rates low, currently near 1%. If interest rates go up to normal average, the cost of servicing the $16.4 Trillion debt explodes. The federal gov’t just can’t afford that any more. Look at Japan, they have been printing money, keeping rates low, and there is no hyper inflation in Japan. Their dabt is 200% of their GDP. Ours is just over 100%. Low rates reduce cost of doing business. High prime rates increase cost of doing business which are then passed on during each step of production.
What will bring this market down is falling corporate profits. That is what happened in Japan. That will take several more months to materialize here.
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Bonds are coming with increased risk and less payout. Stocks are becoming more tricky as the markets expect a trifecta in earnings, revenue and forecast. Miss on one and the bears maul you. Ride the gravy train on what works and sell on any type of rally on the others.
I may give my equity position a small trim in the next week or two. There will be an opportunity to buy equities at a cheaper price than today’s, I suspect. At least there always has been.
Please add me as well.
I like it. Please add me
please add me to the list
Here is a guy who likes Sandstorm Gold which is like SLW - Silver Wheaton (streaming) except in gold. The 30-something CEO used to work at SLW and picked up some tricks
CPI has been tame for several years now. Hyper inflation around the corner the meme has been stoked for several years now. Why can’t people learn from history? We are following Japan, just 4 to 5 years behind the curve.
Thanks! I loves me some Kyle. Smart and easy on the eyes. ;)
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