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  • From: Don Bowen KI6DIU <don.bowen AT earthlink.net>
  • To: homestead AT lists.ibiblio.org
  • Subject: [Homestead] What some of it means
  • Date: Tue, 25 Sep 2007 06:43:03 -0700

Recently we had a discussion of the meaning of the economic bad news flooding us. I am slowly starting to understand a small part of it. One is the massive injection of money supply and the big jumps in the stock market coupled with the free fall of the dollar.

It is all perception or feel good publicity. The Fed wants the stock market to fly because that number is reported in almost every news outlet. People may not have any money in the market but when the numbers are flying people feel good about the economy. If the market tanks it is reported far and wide and people feel bad about the future of the economy. So the fed bumped up the market, exactly the same thing they did just after the dot com bust and exactly what fed the housing bubble.

Another part of the puzzle is the tanking of the dollar. People holding dollar dominated instruments realize that with more money in circulation it has less value so they bid down the dollar. In order to attract the foreign investments needed the stock market has to climb to mitigate the affects of the declining dollar. There are some other heavy downward pressures on the dollar such as Saudi Arabia moving away from the dollar for oil transactions.

Meanwhile there are domestic pressures for significant inflation in the near future, mostly because we insist in pouring food through our SUV gas tanks.

Corn $3.735, Wheat $8.777, Soybeans $9.787. (9/25 CBOT) Feeder cattle $1.166, Live cattle $1.007, Pork $.875 (CME), gold $732.80, Crude $80.95, Euro $1.4113, Can$ $.9978.


Don Bowen Awl Knotted Up KI6DIU
http://www.braingarage.com




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