Look Who's Worried Now!
"Big Al decided that he would tell the world that the Fed Heads are now worried about inflation…WOW! All this time, we've been told there are no inflation pressures, that productivity was the end all and so on, and so forth. But now…they're worried?"
by Chuck Butler In this issue… - Look who's worried now!
- Rates going higher… So what!
- Poole lathers up the dollar bulls…
- 3 thoughts from Chuck!
--- Advertisement --- Need more World Market deposit slips? Simply give us a call at 800.926.4922, or e-mail worldmarkets@everbank.com. We'll be happy to send you more Bank-By-Mail envelopes by return mail. --------------------- And now…today's Pfennig! Look who's worried now! Good day. Well, I'm back! I have been here for over an hour this morning trying to get my email box up-to-date. Over 1,000 emails in my box since I left! So, this will have to be short n sweet, like my favorite saying. As long as the book on what men know about women! So, I got up-to-date upon my return reading Chris' Pfennig's. He did a wonderful job in my absence trying to keep the calm among the masses, with all this dollar strength going on. While I was gone, I saw that the Fed had raised interest rates again 25 BPS, (See, I told you they weren't going to get aggressive with those hikes!) but this time Big Al (wait, I've got to tell you that I'm having a devil of a time typing this morning, my fingers don't want to work!) Anyway, this time Big Al decided that he would tell the world that the Fed Heads are now worried about inflation…WOW! All this time, we've been told there are no inflation pressures, that productivity was the end all and so on, and so forth. But now…they are worried? I'm not even going to get on my soapbox and call them names that might get me thrown in jail! HA-HA! But since the Fed is now worried about inflation, some idiots have gone out and started waving the flag for dollar strength. Yes, if inflation is a problem (and I say it is) then interest rates are going higher, but they will be going higher because the Fed is behind the eight ball of inflation! Inflation, people! Did you hear that word? It should be the cause of all ills in an economy, and no reason for people to buy a currency! So…there! You know where I stand on this topic! Not like there was any question before! St. Louis Fed President, Poole, got the dollar bulls all lathered up this weekend with more inflation talk. So the dollar is stronger again this morning, but we'll see how long that lasts! I've got two thoughts for everyone regarding the strength in the dollar, no wait, three thoughts. Here you go: First: IMM futures positions showed last Friday that the U.S. dollar short position has collapsed to its lowest level since February 15th. And you may recall that was about the time the dollar's beginning of the year rally was faltering. So, unless there is something going on to reverse the weak dollar trend of the last few years, this dollar run has just about run its course. Second: I have seen several economists project U.S. Fed Funds to top out around 4.5%. If that thought catches on the markets will reverse the dollar strength even if rates are rising! The Twin Deficits are still there staring us in the face…and dollar strength isn't going to make those deficits look any better! So, don't get caught up in what I call SIRT… Third: This is not a crying opportunity…it's a buying opportunity! Well, that's my opinion anyway! Currencies today: A$.7690, kiwi .7080, C$ .8220, euro 1.2895, sterling 1.8750, Swiss .83, rand 6.20, krone 6.3650, forint 192.05, zloty 3.19, koruna 23.32, yen 107.90, baht 39.56, sing 1.666, pesos 11.21, and gold… $426.10 That's it for today. Except to say a great big THANK YOU to everyone that sent along birthday wishes to me. You were so kind! And to everyone here that was able to join me at my house, before I left, to celebrate…thanks to my wonderful wife! Thanks to Chris for picking up the ball for me with the Pfennig, and to Jen for trading in my absence! I saw some wonderful spring training games in Florida, which leaves me very excited to get the season going! With that…I'll try to start sifting through all this stuff on my desk, and those 1,000 emails! Have a great Monday and week! |
