[Cashmere]

You have gotta love the old gal! You just can't keep her down.

Man, this has really got to piss off the "it's a bubble" crowd. Just when they thought they heard the faint hissing of deflation, they realize that the sound they heard was the big man drawing in another huge breath, during which draw some slight deflation took place.

Soak it up DSEs.

[socrates1fan]

Gas prices will go down occasionally and in a temporary fashion but continue to rise.
People can't seem to let go of the cheap gas days.

[RonMN]

I LOVE the avatar Cashmere!

Who's the ultra skinny one on the right?

[socrates1fan]

I LOVE the avatar Cashmere!

Who's the ultra skinny one on the right?

What?!
Every time I view that photo I try to keep my lunch down as funny as the picture is!

[cipi604]

It's a bubble for sure, but still inflating to the maximum. It's going to burst in a few... years or so. After that , you'll be paid to use oil.

[Denny]

Dan Bernanke must be pissed. After he worked so hard developing just the right words, just the right inflections for his sales pitch to convince the world that he REALLY meant it this time, not like the other 25 times in the past, when he said that strengthening the U.S. dollar would be his prime task, reining inflation back in.

[misterno]

Something is not right

How come oil and stock market be up at the same time and so much? Markets getting crazy. Signs of PO

[Denny]

Something is not right

How come oil and stock market be up at the same time and so much? Markets getting crazy. Signs of PO

In a word...INFLATION!

[heroineworshipper]

Funny how every time oil starts to fall, Dubya says "Can't let Iran have nukes" or something similar.

[emersonbiggins]

Denny is right. Wal-Mart sales are up 4% YOY, but inflation is running right there with it, if not exceeding it by a couple of percent. If you use government indicators for inflation, it still looks like the economy is "remarkably resilient." Those of us out here in reality are seeing things a bit different, though.

[SoylentGreen]

thats Ben Bernake not Dan and he inherited a bowl full of feces.
Inflation 4-5%???? with gasoline up 160% in 4 years? the Government accounting is way more creative than the worst big business scams in history.WorldCom, HealthSouth, Tyco, Enron....

[3aidlillahi]

How come oil and stock market be up at the same time and so much? Markets getting crazy. Signs of PO

A "strong" stock market is nothing without a strong currency to have real increases in wealth.



Price the stock market in Euros, Yen, Yuan, gold, silver, etc and it's down big down lately. Silver, for example is up 1.90% today while the stock market is up 1.73% for the day. Good thing I'm in silver and not the stock market.

Compared to the euro and gold, DJIA is actually better for today but longer term, DJIA is a joke.

[kokoda]

Any price fluctuations will just add a few bumps to the curve.

[yull]

I see the boogeyman today is the falling dollar, even though it only fell 1% while oil rose some 5%.

Perhaps the profit taking is over, the market is finishing taking a breath before the next rally up up and away....

[bkwillia]

The economic data keeps indicating that America is not down and out yet. We are still consuming 99% of the oil we did last year. Money is being distributed and spent at sufficient rates to make investing and growth profitable. It may be a house of cards, but its still standing.

[DantesPeak]

Something is not right

How come oil and stock market be up at the same time and so much? Markets getting crazy. Signs of PO

In a word...INFLATION!

The Federal Rserve has replaced $550 billion of its assets, mostly Treasury Bills, with the debts of banks and brokers, but mostly mortgage related derivatives. This doesn't count maybe $100 billion more in guarantees its made.

This action is properly called a debasement of the dollar. Techinically the Fed is not inflating too much, just reducing the value of the dollar. A hyper-inflationary increase in the monetary base is not needed yet due to the central banks of various countries buying US dollars at a $500 billion annual rate over the last year. Essentially by differring the collapse of the dollar, dollar inflation is being dispersed worldwide.

In these circumstances the dollar keeps losing value and the value of other things like many stocks with physical assets and commodities keep rising.

[patience]

How long until other countries choke on the wads of Federal Reserve notes, and upchuck? There has to be a limit to this scam.

Sure, we fed them a big dose of MBS and other BS first, but Europe seems to be more inclined to take their medicine and get it over with.

The last one to blink wins?

[TreeFarmer]

The economic data keeps indicating that America is not down and out yet. We are still consuming 99% of the oil we did last year. Money is being distributed and spent at sufficient rates to make investing and growth profitable. It may be a house of cards, but its still standing.

BK I understand what you are saying, the data has not turned bad, at least not yet. Somehow, and I guess its a gut feeling, not anything based on hard data, I feel like the country is "running on fumes." One bit of decently bad data or continued $4 gas and $5 diesel and we'll see the bad news start to pour in.

TF

[DantesPeak]

How long until other countries choke on the wads of Federal Reserve notes, and upchuck? There has to be a limit to this scam.

Sure, we fed them a big dose of MBS and other BS first, but Europe seems to be more inclined to take their medicine and get it over with.

The last one to blink wins?

The accelerated phase of US dollar buying by government backed foreign banks kicked off in earnest in early 2003 - and has accelerated since to keep up with the growing US trade deficit (caused mostly by rising energy prices).

There is some practical limit where the whole foreign exchange system starts to overload and destabilze. I suspect we are already past the point of no return for the US dollar, since the trade deficit is going to balloon again with $125 oil, but it will take some months and maybe a few years before all the players realize this.

[sittinguy]

cipi604 said,,, paid to use oil???? what the hell are you thinking?
are you sure your in the rite place. Please tell me what you think will happen in the future.