IMF Beefing Up
We had a massive jump in stocks today as the Dow moved up 104 points after breaching 11,000 yesterday. Interest rates rose in a sideways tranche.
The Dollar weakened a little, and oil/gasoline jumped back up. I would expect those energy plays to increase in value in the near term. Gold rose slightly, and is in that middle ground where you don’t know whether it will break out to the upside or to the downside. Patience is called for.
In the news today…..
Commodities – are now being purchased in big quantities by China. No new news, I know. But here is a tidbit that is very interesting. China, for the first time, has surpassed the USA as the number one country for imports of diamonds from Europe’s diamond capital, Antwerp, Belgium.
IMF – has increased it lending ability by increasing its pool of money from $50B to $500B. How did it create this magic. It just had its BOD approve the issuance of more SDRs (Special Drawing Rights). SDRs are the measure of the currency that the IMF uses. Where did the money come from. Out of thin air as far as I can see. So, what’s the real story here? I think the story is that the IMF sees a bunch of countries out there that will need to be bailed out In the near future – like Greece, where the IMF will be loaning a bundle of money. Not a pretty picture, but a real red flag flying. Oh, and those new SDRs are truly inflationary somewhere.
Tonight’s Dinner Conversation…..
The Border – have you ever wondered how we should have ceremonies at a border. When you fly into the US, you cross the border, sort of, by seeing the Immigration Officer. That is pretty bureaucratic, but effective too. However, I have one complaint. There is not enough pomp and circumstance.
How about our Mexican border. That’s a real border where a line exists, and America is on one side, and Mexico is on the other. We have a great opportunity to create a ceremony every day at that border. But, what should we do? Well, here is a great video of the border ceremony between India and Pakistan. Now these two countries have gone to war against one another before, so they mean business. Notice that there isn’t much smiling going on between them. But, it does provide the proper amount of pomp and circumstance.
http://www.youtube.com/watch?v=LZ0ue-XGl9c
Here are the last numbers for today:
Dow Jones 30 Industrial – 11,123 (up 104)
10 Year Treasury Bond – 3.86% (up 0.05%)
Euro – $1.3653
Gold – $1156 (up $5)
Oil – $85.96 (up $1.91)
Gasoline – $2.33 (up $0.02)
