Friday, December 28, 2007

OK. I’m back.

Year-end is as good a time as any to take stock. Let’s see now…

The U.S. dollar has gotten creamed.

Crude Oil trades just shy of $100.

Gold is rocking in response to the $. Silver, too.

Housing has a severe pneumonia.

Agricultural commodities like wheat, soybeans, and corn are trading at record, or near record prices.

If you have been reading my stuff for a while this is all check, check, and check…

Now for 2008:

Nothing new:

The U.S. dollar continues to weaken versus commodities and the currencies of oil exporters (versus the Euro? No opinion because it just isn’t that important – unless you are a currency trader).

Crude trades over $100, with a high of $140, and a low of $75 (I had dinner last night with FireAngel of fame and he felt $165 was very possible. His calls have been nothing short of prescient, so I moved my own projection up from $130. Brave of me, no?).

Gold and Silver continue to appreciate against the $.

Corn trades higher in sympathy with oil and natural gas. Soybeans and wheat? Tough call.

For the U.S. economy:

In Nominal Dollars, no recession if oil supplies are equal to or surpass 2007. In Real Dollars we might be in a recession right now. The data for inflation, the GDP deflator, money supply, etc… is so disparate (it doesn’t add up) and unwieldy that Alexander the Great and his pesky Gordian Knot pale by comparison.

The Great Unknown is the response to the U.N.’s International Panel on Climate Change’s final report to the General Assembly. I don’t care how many Larry Kudlow, pooh-bah jerks the deniers line up to mock those tree hugging scientists, this issue is going to be big - REALLY big. Like rationing electricity big. Or leaving coal in the ground unburned big. BIG.

I am back and will be posting regularly and I wish for you and yours a happy, healthy, and prosperous new year!

Mentatt (at) yahoo (d0t) com

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