Re: OIL AGAIN!
If I were to say the latest economic events in the financials markets , which have spread across nearly every sector so far , position resizing or whatever right . Just agree and bear with me here for a few moments .........
Now do you know what type of inflation has been at the force of the last run ?
I do , it's called demand - pull inflation . It's coming about Ben .
The economic shift caused in the markets by some of its participants , has also changed that inflation on a global scale .
There will be ripple effects , it's unavoidable and physically impossible to change or deflect in a way that is suffice .
We've watched a period where the Fed has raised rates , an administration that has cut taxes and a country go to war .
All costly to an economy in the first place .
The so called bull run was poured out of a bucket and turned into steam , equity that never existed was created .
The Fed tightened like the Almighty to slow it down , until it finally choked it , it's like interrogation gone too far , whoops .
Someone else on this site mentioned this in a thread prior to my sub. on stagflation , that's what America is faced with , the stimulus packages are a wild bet on a hand played too far .
Asia , more so China in this mention , which has boomed and will probably see continued growth as it spreads inland , albiet at a slower rate in the future , will have that inflation monster turned on them in the shift aforementioned to .
Do you know how it will turn ? I do , and I know they can ride it out .
They will see what's known as push - cost inflation , the US will just have to add that to their stagflation .................
I think this would be another catalyst for the carry trade to unwind again eventually
, and hedge positions would be critical .
Why ? Because we have seen magical data from Japan that the herd has ran with and it has disappeared quicker than the Trillions of dollars on the markets last week . Japan is a model failure , you can't print your way out of a mess for twenty years .
So this weeks data and Fedspeak , will see a stampede either way on the Yen , we can be sure of that .
But ........ Japan will be and still is in deflation , US rates being dropped won't help it one bit .
This will see tightening controls in oil by certain countries , anything that upsets the apple cart , which is probably why there a $20+ Delta out there in the oil futures , will push oil prices harshly , for my view if it get's tighter it will get uglier , if it get's uglier , oil will rise .
This has nothing in relation to the summertime driving , heating , bear markets or recessions in the US , etc. etc. , it's about demand and the swing in inflation .