Folks, the market is shouting - SCREAMING — that we are on a troublesome economic path. The tinkerers in Washington and Treasury are driving the dollar into the crapper. They’re putting Treasuries into the shredder. The mortgage markets just dislocated in a huge way. And gold is flying toward $1,000 an ounce.
Oh and don’t forget $66 oil, surging gas prices, rising soybeans, rising wheat, rising corn. Meanwhile, TIPS spreads are blowing out to the upside. At the 10-year maturity, they have gone from 4.3 basis points in November to 183 — that’s a 4,250% move if my math is right. I’m certainly not going as far as Marc Faber and predicting Zimbabwe-like inflation. But if Bernanke and Geithner don’t show some sign of “getting” what the market is saying, we could end up with a real crisis.
To paraphrase Rick Santelli’s CNBC rant from a while back, is anyone in Washington listening?
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- Treasuries mauled as my “no free lunch” theme gains traction I’ve been hammering home a clear point for several weeks and months – there is no such thing as a “free lunch.”...
- “Selling America” redux American assets continue to be sold aggressively. The Dollar Index is down 59 basis points to 79.94. The long bond...
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On a personal note, I’m trying to re-finance my property and get a 5% mortgage, down from my 6% mortgage, but we haven’t locked in the rate yet. We were a little unnerved when my banker saw the rates jump a point, from 4.85 to 5.60 in a couple of hours. Rates are artifically depressed by Fed manipulation. I wonder how long they will stay low and if I’ll be able to lock in a the really low rates.
Mike,
Doesn’t the law of supply and demand make sure prices don’t go too high? Hey if gold and silver go through the roof I will be rich. If that’s what inflation brings so be it. I’m ready. I’ll just avoid or minimize those items that cost too much. We already know how to deal with $5.00 gasoline prices. Bring it on! We know what to do to survive. Since we can’t stop it, we might as well profit from it. Happy days are here again and you will help us profit from them. Thanks Mike!
Nope, not listening.
Off shoring more jobs (including scientists at NASA), helping the unions to destroy an entire swath of our economy by thrusting more of their problems on the backs of small business, gifting banks, insurance companies trillions.
I own a small industrial fastener company and my customers (not just automotive) and suppliers are telling me they have just had the worst month EVER. And this is BEFORE the effects of GM, Chrysler, Visteon bankruptcies are slammed into us.
This entire fiasco started with throwing open the doors to the third world’s cheap labor. That gutted the true wealth production in our economy and then greedy bankers fueled what everyone thought was the success of globalization. It wasn’t, it was just housing.
Put a fork in us all, we are done.
And I can’t farking wait until the energy bill, health care bill and other associated big government programs hit us.
Who exactly will be left to pay for it?
I agree Bruce. The Fed is fighting a losing battle, especially now that China is not behind them by continuing to buy a lot of our debt. I just can’t figure out why the market thinks we are coming to the end of this debacle. I have invested to the down side and I am getting my shirt handed to me
In my opinion, the USA elected a president whose experience was to organize neighborhoods, and legally extract money from corporations to support people who got fired. He doesn’t have any business experience or is commited to following the economic laws businesses have been following. So NO, not enough people in Washington are listening.
Hey, I should correct my post - China is listening!!
Headline in the news is Geithner making a trip to China this weekend. We’ll have to see what comes of it.
To Bruce, Your opinion is right on re: Obama and neighboorhood organizer. Jesse Jackson invented the original model. These guys are nothing more than extortionists with zip bussiness experience posing as responsible Americans.Law professors make lousy economists . Their experience tells them you get things done by extortion and at the end of a gun barrel. Expect more from the Chicago south side anarchists and socialists.
Here’s another thought regard Mr Weisses White Paper and the Petition he sent to Washington. Considering the attitude the Pres expressed for Crystler bond holders during their bankrupcty talks, he might veiw the petition Mr Weiss sent as what is wrong with USA, greedy investors, thus passing the list to the FBI to keep a watch on everyone. Didn’t Clinton abuse FBI powers when he was in office? I wonder if any of the petitioners will get their taxes audited? Just a thought.