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BACK TO THE MUNDANE?

February 23, 2005

Okay, so much for the gut-wrenching, heart ripping, movie stuff. Let’s get back to the economic world we live in. After January, my rantings on the economic front looked so far off. As we close out February this week, they look pretty darned close. It’s amazing what a month can make.

The Dow was wowing and the Nasdaq was jacking (upwards). But today the Nasdaq fell below it’s starting point for the year. Red for the year at one point today. The Nasdaq managed to claw back to being only down 2, and still marginally green for the year. Nonetheless, the Nasdaq has been down for 7 of the last 8 days, and so have the Wall Street brokers attitude.

Good old China- marketing DEFLATION to the world in massive amounts. They can produce more than we can actually buy at prices 5-10x lower than we or Mexico can produce them. Now China is marketing INFLATION to the world as well (commodities). It turns out their 1.3 billion people need grain, food stuffs, and OIL. Chinese crude oil imports were at a record 10.3 million metric tons in January! So, now we’ve got competition for oil: another word for a tax on our income.

Robert Prechter reminds us in a Feb. 20 article (The Elliott Wave) that we’re in a DEPRESSION. We’ve just not seen the bottom. Economists didn’t recognize the 1929 depression (the word wasn’t used in print) until 1933, at the bottom! Prechter’s thesis is we moved into a depression in 2001 and the bottom is on the way.

Did I say mundane news? Hmmm.

Written by Ernie · Filed Under Daily Commentary 

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