PLEASE ACCCEPT OUR WARMEST WISHES FOR A HEALTHY, HAPPY AND FULFILLING 2008

2008 WILL BE A YEAR WHERE FOOD INFLATION MAKES US PROFITS

It is not yet widely in the news in the developed world, but in the developing world and in the energy producing countries of the Mid East, Asia, and Latin America; inflation is beginning to share the headlines with news about rapid economic growth.

Most of the western economic  pundits dismiss inflation as a non-problem because it is their view that inflation has been caused by higher food prices, and food prices will move lower once good weather allows more crop production, or once high prices dilute demand as has been the case in the past.Click here to read full article...

Happiest Holiday Greetings to All!

THE STOCK MARKET DOCTOR MAKES A SHORT PROGNOSIS

Unfortunately, our doctor is not Doctor Feel Good…at least not in the short run.
 
The prognosis is not good for the stock markets in the U.S. and Europe.  Sure, they can rally, but don’t count on any long bull runs.  Any stock market runs we get in coming months are more likely to be bear runs, and those are seldom fun.Click here to read full article...

THE U.S. DOLLAR
 
As we predicted the drumbeat of PR for the dollar has begun in earnest, and this was and is to be expected.     
 
No governmental financial authority anywhere wants the dollar to fall in a straight line without any rallies and without any slowdown.  Now an effort has begun to give the dollar a rally; and it has been successful so far.  The battle to slow down the dollar decline will include:

• Intervention by central banks to protect their dollar holdings. 
• Jawboning by central bankers and finance ministers in every country to try and give the dollar a further rally.

Long-term, we remain bearish on the U.S. dollar.  We should however, remember that even the dollar can rally, and it occasionally does.  It rallied for eleven months beginning in December 2004. Then it had a spectacular decline from late 2005 until quite recently.Click here to read full article...

This is a season of reflection with the harvests in the northern hemisphere and the planting season in the southern hemisphere.  We are thus reflecting and wanted to take this opportunity to thank you for your confidence, friendship, and readership.Click here to read full article...

INFLATION REARS ITS UGLY HEAD

Saudi Arabia [4.9%] and China [6.5%] have just reported big increases in October inflation. These are high numbers.....but more worrisome they are way up from a year earlier.
 
India reported their big inflation increase a while back at 6.2 % in September.
 
Much of the developing world is suffering from inflation as well. Sure we are not yet seeing it in Europe and North America, but it is on the way.Click here to read full article...

IF THE DOLLAR FALLS SLOWLY, OR RISES SLIGHTLY, EVERYTHING WILL BE O.K…and the weak U.S. dollar will be a problem not only for the Americans whose global standard of living is being eaten away, but also for foreign holders of U.S. bonds, and for the export competitors of the U.S. who will have to be more efficient in order to compete.
Click here to read full article...

I don’t know if any of you know the old blues song from the 1930’s that goes "Once I lived the life of a millionaire…spending my money...I didn’t care.  Taking my friends out for a mighty good time...buying bootleg liquor, champagne and wine.  But then ooh...I fell so low...Had no friends and had no place to go..."Click here to read full article...

ALTHOUGH A LITTLE TECHNICAL, THE FOLLOWING ARTICLE FROM THE FINANCIAL TIMES POINTS OUT AVERY IMPORTANT FACT ABOUT DERIVATIVES

Most derivatives are pretty much guesswork at this time.  Like medieval medicine (which killed more than it cured before it developed into a science), derivatives and how they are structured and used can be dangerous.  The art of using derivatives, leverage and financial manipulation based on mathematical models remains far from a science.  However, there is plenty of incentive to undertake it because of the outsized profits that can accrue to those who are able to convince the gullible that it is a science.Click here to read full article...

The World Bank has done some excellent research on this subject.

I know that many are skeptical that anything wise can come out of the World Bank, but there has been some excellent research done by some economists there.  These individuals..."presumably with green eyeshades pulled low’’ have done some thorough and groundbreaking research which corroborates what a lot of us already intuitively think.Click here to read full article...

Let’s keep things in perspective.  None of this is rocket science, but it is easy to get carried away by fear and greed.  Those who win are those who keep their wits about them.

Here are some probable events that we are looking forward to.Click here to read full article...