The Economy Guy

Stocks were up and down, and ended up 48 points.  Not much new there.

10 Year Treasury Bonds on the other hand bolted upward in interest rates to 3.85%.  This has fought back to levels where inflation is the order of the day, and interest rates reflect that fear.  You should too.

The Dollar continued its strengthening.

Oil, gasoline and gold came back strong today.  Oil jumped back to over $116 a barrel, and gasoline jumped too.  Gold came back into fashion too coming back up $7/ounce.

In the news today……

The FED in conjunction with the European Central Bank and Swiss National Bank are boosting the supply of money to the banks.  The FED has stated they will be making $150B available in May, compared to the $100B it made available in April.  Why did they jump up????  They said they needed to boost bank reserves to encourage lending, and they have increased the term of those loans to 28 days.  They are taking worse junk in the TSLF auctions too.

What does all this mean??  The FED is still scared about the lack of liquidity in the world’s banks.  The problem hasn’t gone away yet.

The FED is cracking down on the deceptive credit card practiced by the credit card issuers.  The CC companies are playing lots of tricks, like raising interest rates, and creating more debt.  In other words, the CC companies are shifting the problem from the mortgage arena to the CC arena.

Dinner Conversation for Tonight….

Thailand wants to create a Rice Cartel with Laos, Myanmar, Cambodia and Vietnam.  This cartel would operate like OPEC.  Thailand wants to start controlling the world price of Rice.  This probably won’t work unless India and Pakistan join in, as they are major exporters of Rice.

What other countries are important in this thought process?  Is it in the USA’s best interest to have this cartel formed??

A Rice Cartel is no different than having import or export tariffs raised by another government.  What impact could this have on world trade?

Here are today’s numbers:
Dow Jones 30 Industrial – 13,058 (Up 48 points)
10 Year Treasury Bond – 3.85% (Up 0.10%)
Euro – 1.5424
Gold – $858 (Up $7)
Oil – $116.32 (Up $3.80)
Gasoline – $2.97 (Up $0.09)