STOCK MARKET WATCH, Tuesday December 16.....(#1)

Pac-Man, Clicks, & Bricks

Historian Roy Jastrum described gold as the “golden constant” because it always maintained its ability to buy a basket of goods. Throughout all of history during good and bad economic times, it always preserved its purchasing power. Gold is the only money that isn’t someone else’s liability. From biblical times through the present day, gold has acted as the ultimate currency -- the currency of last resort. Pharaohs, kings, emperors, prime ministers, presidents and central bankers have tried to tamper with its value. Despite their best efforts, its value has remained constant throughout all of history.

Follow the Gold Trail... to Economics and Power

The history of gold is really an economic story. It is a story about commerce, trade and ultimately power. Gold reserves are viewed as a primary indicator of a nation’s wealth. It is one reason why until recently gold represented almost one-third of western central bank reserves. If you want to know where power is shifting, follow the flow of gold. At the moment it is flowing from debtor nations to strong creditor nations in the Far East.

Strong Dollar Policy & Monetizing Debt

Another event during the 1990s would exacerbate conditions in the gold and silver mining industry. This was the “strong dollar” policy of the Clinton Administration. The Clinton Administration’s policy of defending the dollar was birthed during the Peso crisis of 1994. From this period forward, the Greenspan Fed began a policy of monetary inflation--the likes of which have never been seen before in history. The money supply began to expand at above-average rates, far surpassing the rate of economic growth. Interest rates were brought down, the value of the dollar was defended and the U.S. began a period of monetary inflation which continues on to this day.

Conclusion: Phase Two About to Begin

As I have written in “The Perfect Financial Storm,” in numerous Storm Watch Updates, and more recently in Market WrapUps, the bull market in precious metals has just begun and is still in its infancy. The second phase of this bull market is about to begin with institutional interest in gold beginning to pick up. Several of the world exchanges are initiating programs to begin trading in gold. Several ETFs are now going through the registration process and interest in gold and silver equities is growing by the day. Gold and silver prices continue to deliver spectacular returns for investors for the third consecutive year. Once again, gold and silver equities will become this year's best performers if present trends continue. The HUI is up over 65% this year and the XAU is up a respectable 41%. Both indexes have beat all of the major averages for the last three years running with returns of over 100% and 485%. This bull market is still in its early stages and very few have discovered it.

http://www.financialsense.com/Market/wrapup.htm

Holy Cow Ozy!! I just came from reading the wrap-up!!! It is just as I suspected!! And to think that with the climb in gold prices notwithstanding, gold prices are artificially low!!

Hahahaha!!! The vindication of it all!!!

Sorry to say but the dollar front looks grim from all the little snips I've managed to catch. I'm sure UIA will put in a comprehensive up-date and we'll know more then.

Looks like a relatively grim retail situation too. I know on the ground here it has been evident, but to hear about the larger picture reflecting what I see first hand in my corner of the world gives cause for alarm.

I think things are about to get real interesting. Especially with the good chance of the Fed tightening early next year.

Today's word: Parsimony. I urge all to practice it liberally. haha

Julie

The dollar dropped to fresh multi-year lows against a range of currencies on Tuesday as investors awaited the US current account report with caution.

<cut>
The dollar also hit a fresh six-year low against the Australian dollar and a seven-year low against a basket of currencies.

The figures for the third quarter are expected to show the US current account deficit at about $136bn, taking the nine-month deficit to $415bn. The report is due at 1330GMT.

Foreign purchases of US assets jumped to $27.7bn in October after collapsing to $4.2bn in September, the weakest inflow for five years. However, the inflow was well below the monthly average of $60bn from the first 8 months of the year, and also below $45bn, the minimum level needed to fund the current account deficit.

more...

* says he wants a strong dollar, but acts to undermine it. He really wants a weak dollar to "punish" the bad Europeans for not supporting him. The Europeans are on to him and aren't all that worried because they think his plan will backfire.

Now that is what I've picked up over the last few days, but I don't understand it. How will it eventually backfire on *? If we borrowed dollars worth a dollar and pay dollars back that are worth .70 isn't that good for us? Same with goods, what is the down side of a weak dollar is my question?

The talk about maintaining a strong dollar is just window dressing.

Our trade deficit is of such immensity that imports will cost us more. The facts are quite stark. We must import much of what we expect in order to maintain the American "quality of life". For Europe, the weaker dollar will hurt their exports as it makes their items more expensive for us. However, they export more goods than we do to them. The trade imbalances we currently run favor them if push comes to shove.

The deficits created by these ventures are paid back by fiat trading currency: the dollar. Now if the countries that have adopted the dollar as trading currency were to switch to, say, the euro, then our dollar is worth less and it will cost us more as a nation to repay our debts. Right now, the Fed is printing more money to cover debt payments because it can. IOW, there are many nations that will happily accept an American dollar "with the full faith and credit of the United States Government". So what happens (I ask rhetorically) when the credit rating is slashed? Other nations may hop on the euro bandwagon and *Heavens Forbid* oil producing nations do too. Energy costs increase and we have the equivalent of a migrane in our infrastructure.

Our inability to service our national debt has come into question as analogies have been built between the US currency crisis and Argentina and Mexico of recent years.

This can backfire on Bush because the "little people" like you and me will spend more on everyday commodities (inflation). Since inflation runs on average above 2% per year and money held in savings like money market funds, passbook savings and CDs is currently earning less than 2% then the American public reliazes a net loss in savings. Our money is worth less. At the end of the day, who is going to get blamed for shrinking savings? Not you. Not me.

I am sure other Marketeers could expound upon these ideas with greater deftness.

How is it that * doesn't know this? What does he think will happen?

The WrapUp does provide a troubling punch to the trade deficit. Sunday, my wife and I went to a local mall to see markdowns of up to 50% on clothing items. Stacks and stacks of them.

I heard thenews that retailers are worried over the wait-and-see approach that shoppers are taking this year as they hope to score bigger discounts. A friend who owns a clothing boutique says that the typical retail markup on clothing is 40%. So you have to wonder about profits being realized in these huge stores when their discounts exceed the purchase price.

It was sobering to see how little reaction the markets showed to the "Good News".

Dollar Sets Life Lows Vs Euro

LONDON (Reuters) - The dollar fell to a record low against the euro on Tuesday as its euphoria over the weekend capture of former Iraqi leader Saddam Hussein gave way to concerns about the widening U.S. current account deficit.

Figures showing the extent of the U.S. current account gap for the third quarter will be released later in the session, as well as consumer prices data which will provide clues on how long U.S. interest rates are likely to stay low.

"Financial markets were already discounting risk factors related to Iraq so (the capture) didn't have a lasting effect," said Mary Davis, global foreign exchange strategist at CSFB.

"As far as currencies are concerned the dollar is under pressure from a combination of the level of the current account deficit and monetary policy gap between the U.S. and Europe."


SNIP
Source: http://news.reuters.com/newsArticle.jhtml?type=businessNews&storyID=3999356

Gold Resumes Its Upwards March

LONDON (Reuters) - Gold resumed its upwards march on Tuesday in Europe after a brief stumble the previous day as the dollar slithered to fresh all-time lows against the euro as Monday's bounce in the greenback proved temporary.

SNIP

The current account balance for the third quarter 2003 will be published at 8:30 a.m. EST, with median forecasts pegged at a deficit of $136 billion, slightly below last quarter's $138 billion deficit.

SNIP

The dollar is weak, commodities -- and that includes the base metals -- are currently sexy and as a consequence of that, the gold market is making an inexorable march to $420," Peter Hillyard, head of metal sales at ANZ investment bank, said.

He said he expected gold to reach that level by Christmas and said gold's dip on Monday had simply given investors another opportunity to buy, which they had seized.


Source: http://news.reuters.com/newsArticle.jhtml?type=businessNews&storyID=3999447

from young-whipper-snapper America (who is about to get some comeuppance ;-) ). Seems gold is the big story everywhere where they care about money (which I guess would be everywhere).

I feel like I'm on a spiral slide and I have no idea how long it is or what sort of landing to expect at the end. Bruising or bone-crushing? Crappy options.

Regards from the belligerent upstarts! :hi:

Julie

Consumer Price Index, housing starts, industrial production, capacity utilization...and all before 10:00.

http://money.cnn.com/2003/12/16/markets/stockswatch/index.htm
<snip>
The economy will be in focus before trading begins. The Consumer Price Index for November comes out, with economists surveyed by Briefing.com expecting a 0.1 percent increase, compared with the unchanged reading in October. Excluding food and energy costs, consumer prices are seen having risen 0.1 percent.

Housing starts for November are expected to have declined to an annual rate of 1.91 million from 1.96 million in October.

Also due before the bell is industrial production for November, projected to have risen 0.5 percent after a 0.2 percent climb in October; capacity utilization is seen climbing to 75.4 percent from 75 percent.

:shrug: They went from positive to negative rather quickly...you don't suppose there may be some doubt about the numbers that will be coming out at 8:30, do you?

how about you? ;-)

Julie

And the euro soaring...

haha

Wall Street set for lower open ahead of data

Stocks on Wall Street appeared set for a flat-to-lower open despite some impressive numbers from Oracle, as bourses in Europe and Asia languished in the wake of the previous session's late sell off.

<cut>

"Strong growth but weak pricing power will be one theme. Another will be the yawning current account gap and the US's reliance on Asian central bank financing," said Anais Faraj, strategist at Nomura. "For US equities, the debate as to whether current levels offer good value for money looks set to continue."

Oracle, the software manufacturer, failed to lift spirits in spite of its announcement of profits up 15 per cent on last year and sales up 8 per cent. Reporting after the close on Monday, Oracle beat expectations with fiscal second-quarter earnings of $617m, or 12 cents a share.

more

...as fast as they can. The city is sprawling out in all directions. That has held what might have been a housing price bubble here to a minimum. At some point, though, this go-go housebuilding endeavor is going to go bust, as demand has pretty much been satisfied, and people are no longer able to upgrade to bigger and/or newer heaps of masonry every three years.

first the numbers

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 88.28 Change -0.18 (-0.20%)

and then some words:

Richmond Federal Reserve Bank President Alfred Broaddus said late on Monday the U.S. needed to do what it could to turn the deficit around but that as the rest of the world grew more rapidly the situation would start to be contained, which would help to stabilise the dollar.

Tuesday will also see U.S. consumer prices and housing starts for November, both due at 1330 GMT as well as November industrial production at 1415 GMT. Traders said however the market was likely to receive the news in the same way it had responded to other recent U.S. economic data.

"If the data is good, the market won't react. If it's bad, then we'll see a sell-off (in the dollar)," said Toshihiro Azuma, a manager at Sumitomo Trust and Banking.

In Japan, Bank of Japan Governor Toshihiko Fukui said the central bank was watching the effects of the strong yen on corporate profits but it may not necessarily be damaging.

and then some of my thoughts (whether they are of value is to be determined at a later date)

The reason that I posted the words above and why I believe they are possibly a precurser to the future is that they are from Japan. Whether the yen continues to tie itself to the dollar is the big mystery. If they see that they are throwing the yen into a yawning hole, they really really will stop. The BoJ did learn a few things at Pebble Beach. They learned that US assets do not always hold their value or increase and they do have a "point of pain". We just do not know where or what that is. If they say that they are watching today's numbers, this may be the turning point.

If the BoJ cuts us loose, we are truly in for a free fall. It may not happen today, but the fall will accelerate and there won't be any little plateaus for others to climb onto and bail from - the mad dash for the exits will then be apparent (and no one will shout "fire" in the crowded theater.

Hang on to your hats folks, it might be a wild ride.

Have a Great Day Marketeers!

Being denied credit from one of the biggest creditors is truly something to fear. It would be preferable to have credit extended while we get our fiscal house in order - but the absence of a safety net while we are in such a mess...?

It only makes sense though. Everyone needs to tend their own garden before they tend anyone else's.

alarm you.

But you know how when you don't need credit, every creditor in the world keeps sending you those "pre-approved", no credit limit, no cost flyers? And then when you really need credit, no one wants to touch you with a 10 foot pole?

Well, we (the US) are just about at that spot.

jmho

The German company I'm working for has just switched pricing for Asia form Dollar to Euro. The falling Dollar is hurting us pretty bad. This has risen some concern among our Japanese resellers ...

I guess this could be a trend, and others might do the same. How long will OPEC and other oil procucing countries tolerate the losses by a weak Dollar? When will others switch to a more stable currency than the Dollar? Even with the stagnant economic situation in Europe, our fundamental data are on a much more sound basis than over-debted U.S.

A friend of mine speculating in exchange futures has predicted the current situation two years ago. He was not optimistic about the European economical situation either.

Core down 0.1%

Housing starts UP 4.5% Way off mark there!



Julie

between building permits and "housing starts".

What gives?

The permits last month were 1.9 and this month 1.8 (I'm rounding) - and the starts were over 2.

So how does that work?

If my question makes no sense, just :spank:

Thanks!

Black is white
Freedom is Slavery
We have always been at war with Eurasia.

You DO love Big Brother don't you? He is double-plus-good after all. Your questions make me doubt your love for him.

I do not have the answer because I love Big Brother and do not ask such hateful questions. ;-)

(Not to mention anomolies are rarely discussed if they may lead someone to think "manipulation")

Julie

off to the camps I go!

but before I leave, another back to the 80s thing

http://cbs.marketwatch.com/news/newsfinder/pulseone.asp?guid={688C6C1A-1C02-4695-840F-71CAC3CB4788}&siteid=mktw&dist=bnb

U.S. Nov CPI down 0.2%, core rate down 0.1%

<snip>

The so-called core rate of inflation, which excludes volatile food and energy prices, fell 0.1 percent in November, following a 0.2 percent increase the prior month. This is the first decline in the core rate since Dec. 1982.

and then on a personal note - I will be leaving tomorrow for the holidays - visiting the out-laws - ooops! in-laws -

I have asked 54anickel (check your pm) to keep everyone apprised on the dollar.

I will be around for some of today - but then away I must go - and I shall mostly be computer and data deprived (eeeeekkkksss!) so I depend on you all to make certain the world continues to spin round its axis.

(edited because I don't proofread before I hit that button and I hate typos!)

though that's mighty nice of you to call in a pinch-hitter. Hope you have a good trip! :hi:

Julie

and my out-laws (although they don't disagree with me politically {who would dare?} find me a bit overwhelming and don't know what to do with me :D

They will probably not think that your loss is their gain :)

I couldn't have less in common with them. Ah well.

Julie

please all be patient with me and feel free to help along the way. There is so much speculation going on with the dollar these days!

http://money.cnn.com/2003/12/16/news/economy/housing.reut/index.htm
<snip>
Permits, an indication of builder confidence in future home sales, dipped 5.4 percent to 1,874,000 from October's upwardly revised 1,981,000.
U.S. housing activity has boomed as the interest rate for the popular 30-year fixed rate mortgage has hovered above 40-year lows reached in early June. U.S. homebuilder optimism about future sales and traffic was unchanged in December from November, a trade association reported Monday.
The National Association of Home Builders said its members believe mortgage rates - on average 5.88 percent for the long-term home loan last week - are still low enough to encourage home buying.

although I am still confused -

Single-family starts jumped 3.3 percent to 1,695,000 units in November from an upwardly revised 1,641,000 units.

Permits, an indication of builder confidence in future home sales, dipped 5.4 percent to 1,874,000 from October's upwardly revised 1,981,000.

and then the other day I read that they were foreclosing on homes in neighborhoods where there was still building occurring

http://atlanta.bizjournals.com/atlanta/stories/2003/12/08/story7.html

But some of these foreclosed homes are in subdivisions where there are still new homes being built, said Ken Adcox, director of real-estate owned operations for National Foreclosure Service. Real-estate owned properties, or REOs, is bank-speak for foreclosed properties.

and this is a "lag" situation, so only time will tell what happens on that front.

Dow 10,061.34 +38.52 (+0.38%)
Nasdaq 1,921.50 +3.24 (+0.17%)
S&P 500 1,070.43 +2.39 (+0.22%)
10-Yr Bond 4.243% -0.032

And I've got more economy boosting to do. :hi:

HEADLINE 1:
NEW YORK, Dec 16 (Reuters) - U.S. chain store sales softened as shoppers put off their holiday gift trips until, retailers hope, the next couple of weeks, Instinet Research said in its Redbook report on Tuesday.

The pace of sales at major retailers slowed to 3.0 percent on a year-over-year basis for the week ended Dec. 13, after growing 3.2 percent in the preceding week, the report said. Sales at chain stores were down 1.1 percent so far in December compared with November.
http://biz.yahoo.com/rf/031216/economy_retail_redbook_1.html

HEADLINE 2:
NEW YORK, Dec 16 (Reuters) - U.S. chain store sales rebounded as shoppers came out in droves after the snowstorm in the Northeast largely halted retail business for a few days, a report said on Tuesday.

Sales increased 2.1 percent in the week ended Dec. 13 after a 2.5 percent fall in the preceding week, the International Council of Shopping Centers and UBS said in its report. Compared with the previous year, sales for the week grew 5.1 percent.
http://biz.yahoo.com/rf/031216/economy_retail_ubs_1.html

......OK, which is it Reuters?

it is very irritating.

I like how it's the same news agency, same date, and nearly the same opening sentence. If it were AP versus UPI, that would be one thing :)

10:31

Dow 10,070.30 +47.48 (+0.47%)
Nasdaq 1,916.12 -2.14 (-0.11%)
S&P 500 1,070.80 +2.76 (+0.26%)
10-Yr Bond 4.259% -0.016

Save a seat at the table for me later.

Ozy

Hello all,

Today's reading is CENSORSHIP changing to SHOCKING. Here are the changing lines from Censorship: "It is dangerous to attempt to abolish an old and ingrained patterns all at once." And, "You are in a fine position to perceive the present situation with clarity. If it appears hopeless and doomed, as it well might, now is a good time to exit."

Wowzers!

And of course, Ching is predicting something SHOCKING will happen, but I've been led down this garden path before, so I won't hold my breath.

I'm going to predict a wobbly day. Nothing dramatic unless the SHOCKING event actually occurs!

Let's be careful out there!
:hi:

There is another thread in LBN about the lackluster holiday shopping season. It made me think about a trend I've noticed in my family and friends. I was wondering if any of you had noticed it as well.

I call it "Buying Necessities as Gifts":


If my evidence is not just ancedotal, this would have significant impact.
Here is my example: For Christmas this year I am giving my grandmother a $150 gift certificate to her hair salon. She goes once a week for $12 (you know how old ladies are). So $150 will last her about 3 months. This will free up her $150 in order for her to buy herself a little extra food and other sundries. All in all, not a significant impact to "improving" the economy at all. But it will make a big difference to her.

My whole family is doing things like this for each other this Christmas. No more big toys and gadgets, we're just trying to help each other get along.

much the same thing. Gift cards for gasoline for the teens, car washes for the elders, gift certificates to various stores so family can buy what they may truly need or want vs a token gift.
Many friends I have spoken to are doing the same thing. When I got the gasoline card they clerk stated they were selling like hotcakes this year. Sign of the times.

They will likely buy needed items rather than "a lovely porcelain fruit bowl". <snork>

Everyone else is getting nicer versions of things they use anyway...coffee, wine, soap, etc.

Not a year for frivolity here. I expect serious shocks in finances over the next 10 months in this country...major problems for the vast majority of Americans. This isn't the same world most people think they're still living in....the "American Dream" is something many people are going to wake up from, and find the reality to be their worst nightmare.

Thanks to runaway corporatists owning our government. Thanks GW and family.

:kick:

In the past, I've tended to go with somewhat extravagant trifles for friends and family at Christmas. This year I'm definitely aiming (and have had more requests for) more practical items.

And, across the board, my spending will be down 20 - 30% from last year. Gotta keep adding to savings, lest I get caught with my fiscal pants down in the layoffs rumored to come in January.

Although it's not unusual for my family to have the "Things I need" folks and "Things I want" folks. For example, my sister isn't much into "stuff", therefore she often asks for things like winter clothing (whatever has worn out at the time), batteries, or things for her car. She just bought a new house, so her asking has been mostly along those lines...though not extravagant. Either way, it's not unusual for her to ask for necessities. My grandfather and my father are the same way, and always have been. Last year was definitely a "I need" Christmas for me because of my situation at the time. I'm happy to be in the "I want" column this year (I pretty much just asked for an expensive bottle of wine and some musical equipment). My girlfriend is often a "I need".

I was actually talking to someone at work about this yesterday (she had trouble finding a very extravagant and unusual gift for her husband, and I was trying to help her find it), and she said the theory they've adopted for Christmas or birthdays is the "Ask for something you'd never buy for yourself" model....i.e. if they need a new everyday item they'll just buy it themselves, but something goofy and and that can be considered a luxury counts as gift material.

Okay, socks, too! :D

More clothes this year than previously and some cash gifts "for what you really need". No big-ticket "family" gift this year, but more family time together.

Makes for a better holiday season, anyway!

I practice voluntary simplicity - have for several years now. There are many good books out there on the subject (get one at the library). Bottom line is - there are very few things in life that are "necessities". We've all been made to feel that certain things are necessities when they're not. You'd be surprised how quickly your savings increases and the sense of security you have when you have a good savings base. Also, it's a much less stressful life which we could all use in this country.

Hmm...Dow up a decent bit, Nasdaq down almost the same as the Dow is up, and the S&P wobbling but going nowhere...and money moving into 10 year treasuries. Like we were saying yesterday, that Saddam bump in the markets turned into nothing much pretty quickly.

Dow 10,074.08 +51.26 (+0.51%)
Nasdaq 1,905.64 -12.62 (-0.66%)
S&P 500 1,070.14 +2.10 (+0.20%)
10-Yr Bond 4.238% -0.037

Looks like that shopping trip turned the tide! :P

Dow 10,095.91 +73.09 (+0.73%)
Nasdaq 1,913.88 -4.38 (-0.23%)
S&P 500 1,072.06 +4.02 (+0.38%)
10-Yr Bond 4.246% -0.029

edited for color

Dow 10,116.82 +94.00 (+0.94%)
Nasdaq 1,921.97 +3.71 (+0.19%)
S&P 500 1,074.72 +6.68 (+0.63%)
10-Yr Bond 4.229% -0.046

2:30PM: Slight firming trend in the afternoon continues...CalPERS, the California Public Employees Retirement Systems fund, and the biggest US pension fund, has filed a lawsuit against the New York Stock Exchange and seven specialist firms...the suit alleges that orders were not filled at the best available price...there has been no broad market impact...
http://finance.yahoo.com/mo

:eyes:

I came across this interesting article on the inflation/deflation debate. I do not know much about this author or site, but I found it interesting. The article is a bit long, but was wondering what some of your thoughts on it might be. Lots of interesting graphs.

http://www.zealllc.com/2003/infdef2.htm

Some snippets:

The last time the US witnessed real falling general prices was during the Great Depression of the 1930s. As shown above, in the early 1930s near the ultimate post-1929 stock-market bottom general price levels actually fell more than 10% over one year! This environment was truly great for savers because with each passing month the capital they had painstakingly set aside grew more and more valuable. Their same dollars could buy more in houses, cars, food, and everything else we need to survive and enjoy life.

While today’s socialist Keynesian historians who bow at the idol of Big Government try to tell us that deflation was bad, they are dishonorably bending history to advance their own Marxist agendas. Falling general prices are not necessarily bad, and there is no doubt they helped countless American families survive the Great Depression as each of their dollars went farther and bought more of the crucial goods and services they needed to survive. If you were out of a job and had to feed your family, would you rather live in an environment where each of your dollars was worth more every day (deflation) or each was worth less every day (inflation)?

From my perspective, it seems like the “threat of deflation” is brought up most often by Wall Street and the government/Fed establishment. I am starting to suspect that these deflationary references are merely cleverly crafted misdirections though, designed to distract investors from the real inflationary threat. When you watch a magician perform, he always leads your eyes to focus in one place while the real “magic” is happening somewhere else. Alan Greenspan himself is the master of this grand economic sleight of hand designed to mask the true dangers of inflation.

Greenspan is already one of the greatest inflationists in world history and he will go down in infamy next to the notorious John Law from three centuries ago in the history books. All the Greenspan Fed does is print money and foment bubbles, like the late 1990s stock-market bubbles and today’s bond-market and real-estate speculative excesses. The problem with printing unlimited amounts of fiat money is that price levels will have to rise as a result.

So if you are Greenspan and want to distract investors from the real threat, why not pretend you are fighting the nonexistent “threat of deflation” rather than edging towards all-out dollar hyperinflation? While inflation has been universally recognized as a great evil and an immoral regressive stealth tax for millennia, perhaps inflating can be rendered acceptable if investors are duped into believing that it is “necessary” in order to prevent the bugaboo of deflation.

If this deflationary-sleight-of-hand-to-mask-huge-inflation hypothesis is correct, what is the motive? I suspect the motive of Greenspan and the pro-inflation crowd is simple. They want to flood the markets with dollars to try and prematurely end the Great Bear bust in the stock markets, but they don’t want the bond markets to recognize the true monetary inflation and collapse.

A bond collapse could send long interest rates into the stratosphere, which would slaughter the majority of Americans with adjustable-rate mortgages and single-handedly disembowel the refinancing boom. And if Americans are forced by rising long rates to stop extracting equity from their homes to buy cars and TVs, the US economy is toast and another full-blown Depression, albeit an inflationary one, is probably assured.

Looks like this morning's economic info has been digested and the prognosis seems to be guardedly positive.

Dow 10,123.26 +100.44 (+1.00%)
Nasdaq 1,922.69 +4.43 (+0.23%)
S&P 500 1,074.90 +6.86 (+0.64%)
10-Yr Bond 4.230% -0.045

Cash still moving into the 10 year also.

They were waiting for the dip! And so they showed up today and...
Dow 10,129.56 +106.74 (+1.06%)
Nasdaq 1,924.29 +6.03 (+0.31%)
S&P 500 1,075.13 +7.09 (+0.66%)
10-Yr Bond 4.234% -0.041

http://www.springfieldnewssun.com/biz/content/business/ap_story.html/DollarGold/AP.V3601.AP-Dollar.html;COXnetJSessionID=1fD0Xd8GBcDGenZs5KCMbKtZpsbGNj8G1e296LT7XroYxJszy7rH!518344907?urac=n&urvf=10716127887710.8090074421309966

NEW YORK (AP)--The dollar fell to a new low against the euro on Tuesday, amid persisting worries about the overall health of the U.S. economy.

The euro was quoted at $1.2320 in late European trading up from Monday's $1.2284 record close. Later, in midday trading in New York, the euro traded at $1.2332.

Over the past several months, the euro's surge has pushed it more than 17 percent higher against the U.S. currency this year, amid stubborn concerns over the U.S. budget and trade deficits, which economists say can undermine a country's currency in the long term.

snip> on the brighter side:

But Dorothea Huttanus, an analyst at Dresdner Bank in Frankfurt, sees the euro's climb as self-perpetuating upward spiral sustained by thin year-end trading that she predicts will not last into 2004.

``The dollar is actually a much more solid currency than the euro could ever be,'' Huttanus said, noting that despite the U.S. deficit, enough positive signals are coming out of the United States to drive the euro back down next year.

would have given the dollar a mini-boost today. Guess not.