The Economy Guy

Stocks rocketed forward today as all the news was good???  This is just one more step toward the top of the stock market.

Bonds moved sideways.

The Dollar was decimated again, as it fell a large amount against the Euro.

Gold rose, and more significantly is using the $1000 mark as a bottom to bounce against. It looks poised to set new highs.

Oil and gasoline rose on the fall of the Dollar.

In the news today…..

CPI – rose 0.4% in August.  This is a rise of 1.4% for the whole 12 months August to August.  I find this astounding.  In a period where we’ve had one of the biggest deflations in American history driven by the destruction of money in the financial system, and added to by a massive meltdown in oil prices – prices rose anyway.  If prices for ordinary people (and that’s what the CPI is supposed to represent) can rise under those circumstances, think about how it can rise when the “recession” is over.  Our national press is saying this is one of the “smallest” CPI rises ever – can you believe these jerks trying to pull the wool over your eyes.

Supplementary Account – that’s what the US Treasury calls one of its accounts that it’s been using to save the nation from our financial meltdown.  They are going to reduce it to $15B.  Does that sound good?  Can’t tell can you!!!  I’ve never heard about this account ever being discussed in the financial community – have you?  During the worst of the meltdown, the Treasury had this Supplementary Account up to $560B – and now we’re starting to talk about some real money.  What were they using this ton of money for?  Why isn’t anyone asking?

Foreign Purchases of Bonds – continued to be positive.  It was $15.3B more bought than sold.  As long as this is positive, we will not have a crisis in our bond market caused by no one wanting to buy our bonds – at least I hope so.  We will have a crisis in the bond market when inflation hits hard enough to cause the FED to start raising interest rates.  The stock market will crash worse than the last time when the FED raises rates back to 5% for the Fed Funds Rate.

Here are the last numbers for today (about 40 min before closing):
Dow Jones 30 Industrial – 9792 (up 108 points)
10 Year Treasury Bond – 3.47% (no change)
Euro – $1.4749
Gold – $1018 (up $12)
Oil – $72.51 (up $1,57)
Gasoline – $1.85 (up $0.06)