Time to check out LA Daily Blog.com's companion website StrategyUpdate.com because oil has hit a record price of $104 a barrel. So that will cause the price of gas at the pump to rise, as well. (So that means consumers will have less money to spend on other goods and services -- and the higher gas prices will cause inflation to creep into the manufacturing and delivery of food and almost all products.)
And, further evidence of a weakening dollar, and inflation expectations (sucky economy) is the fact that gold is back at record levels ($985 at 1:51 PM 3/5/08) after a profit-taking sell off drove the price down yesterday. I think you will continue to see profit-taking that will keep driving it back down. But the sell-offs will be shorter, and it will keep rising back up to higher levels than before.
Some people feel that although Fed Chairman Ben Bernanke said the Fed prefers to make rate adjustments during regularly scheduled meetings, another emergency rate cut may be in the works before the next meeting. But I think that is overly optimistic, unless some bad news comes out regarding the bond crisis.
With gold and oil futures rising, even though inflation fears would lead one to believe the Fed will not be able to make the continued "big" half point rate cuts...Wall Street appears to be betting that the Fed will be forced to deal with the "growth/recession" problem, and hope that stimulation brings down inflation...and if not (if inflation becomes more of a problem), the Fed will be much more likely to step in with an emergency rate INCREASE at any time. But for now...more cuts to help stimulate growth, during an election season.
What made the price of oil break new record levels today? Well with the U.S. dollar so weak, and expected to be weaker, they had to come up with a way to get more bang for the buck (more dollars per barrel, now that the dollars are worth less); so a story came out today that there is a "supply problem". (Yeah, right!)
24 hour LIVE gold and metal charts, CNBC/Bloomberg/WSJ/Barron's/etc news wires, analysis and more investors resource links at StrategyUpdate.com.
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