Lots of interesting stuff has been happening the last few days. Investors are really liking U.S. Treasuries -- not because we are in good shape but because euro bonds are scary. They are fleeing equities, at least for the moment. As Denninger points out here and here, the market is basically Apple, and it cannot possibly end well.
The central banks have a lot of deck chairs they can shuffle. Nobody wants to go into a deflationary depression -- even though that is the real remedy. Certainly no one with any political clout in the U.S. wants to let her sink before November. I suppose we will see how much control they have.
Given the options, I expect inflation to continue, despite the not insignificant slippage in crude. Oil is declining as other commodities, e.g., precious metals, hold on or rise. This is a function of both the weakening of the euro and the weakness of last weeks U.S. jobs report.
I expect Bernanke to take advantage of the situation and do some more bond-buying whether officially QE-n or not. The Fed may start pumping money into euro bonds to hold down a rising dollar. Stupid, but it can work for a while.
About every time I go to town these days, I come back with more ammunition. It's supposed to rain here quite a bit the next couple of days. Maybe I'll get some more reloading done -- load up all the empty cases I have.
This is dedicated to all The Powers That Be who think the Dire Wolf will eat you last:
I sat down to my supper
Was a bottle of red whisky.
I said my prayers and went to bed.
That's the last they saw of me.
When I awoke, the dire wolf,
Six hundred pounds of sin,
Was grinnin' at my window,
All I said was, Come on in.
Don't murder me.
I beg of you,
Don't murder me.
Please,
Don't murder me.
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