Thursday, October 21, 2010


"The reports last week of increased jobless claims, increasing trade deficit, and an inflation rate for food and energy prices that doubled over the last month should have put a lot of pressure on the open trading markets. Frankly, the stock market is now brushing off most poor economic news at the moment--a trend that analysts worry about because it shows a decoupling of economic fundamentals, and the effect it has over real stock market moves. The electronic trading industry continues to move markets irrespective of economic fundamentals.

In the real world, and on the street, higher jobless claims at a time when seasonal employment should be improving the rate are worrisome. With it, we have to add the notion that producer prices rose 0.4 percent in September. Excluding volatile food and energy prices, inflation moved up just 0.1 percent. One of the concerns over inflationary pressure is that the Fed is likely to add stimulus to the U.S. economy through a Quantitative Easing strategy--which essentially has been called "printing money." The result of this action typically creates inflationary pressure on products.

Lastly, the trade deficit for August moved up 8.8 percent on record imports from China. This is both good and bad. The good side of it is that it shows demand in the U.S. for products is still strengthening, which equates to improved economic activity. But it is also a concern because of the growing trade deficit and the perception that it ships jobs overseas."

This article points out something that I don't think many people are aware of; the completely irrational nature of the stock market at this point. You might as well just take your money to the casino and bet it on the game of your choice because that's what we've got with the markets. It used to be that a person could invest based on research and fundamental economics. Now however, the game is being rigged. The markets are controlled by traders with access to computers and software that allow them to trade in milliseconds, changing the value of investments all over the world for no reason outside of short term gain. Remember the "flash crash"?

How can anyone be comfortable knowing that their savings and maybe even their primary source of income is at the mercy of some kid with a computer playing what is essentially a giant game? Can the normal investor understand this system well enough to take advantage of it? Can they even understand it enough to make a cogent argument for the market as a safe repository of their funds? Does the average retiree even understand computers well enough to conceive of the system that is working against their interests?

Of course the investment guys they deal with tell them that everything is under control, that their money is safe. Really? How can they know? They don't control the guys with the computers, either. They can be the best investment guys in the world, doing research and analysis, carefully charting a course through the markets when all of a sudden somebody, in less than the blink of an eye, makes a move that drops the value of an investment for no logical reason, like a tornado sweeping across the plains. Is that a manageable form of risk or just a disaster waiting to happen?

If you don't think I'm right just ask yourself why the market keeps going up when the economy keeps retracting? Doesn't there seem to be a disconnect?

And where does the government come up with these inflation numbers? They don't count food and fuel? What? I don't know about you but outside of my house payment those are the two biggest items in the budget and they're going up fast.

The Producer Price Index keeps going up yet producers aren't passing this on to consumers? If that's the case then we're either on the edge of big time inflation as the cost of goods sold will rise to reflect the cost of production or businesses will start shutting their doors. It's that or the government is lying about the true rate of inflation by somehow cooking the books, again.

It seems to me that nothing can be trusted any longer. The world has become a cesspool of lies and deceit. The government lies, the media lies, even our priests and preachers can't be taken at face value. I know that in the Catholic Church we are seeing constant and purposeful distortion of the truth by many Church leaders to satisfy a political agenda that runs counter to the teachings of the Church itself.

We can no longer be complacent in our daily lives. Everything must be checked for truthfulness. Everything we read, hear and see has to be doubted until we can verify its accuracy. Personally, I don't trust anyone except family and a few friends. I believe in the Catholic Church and the deposit of faith but not the people that control it. I certainly don't trust our federal government at all. I have some confidence in the state and local government but not much. I do trust local law enforcement but believe that they are going to be presented with some horrific choices in the near future that may make it impossible to completely trust them, too.

So what can we do? Personally, I don't worry about it. I figure that it'll all work out the way God wants it to and I'm just going with the flow. I pretty much figure life's going to suck for the foreseeable future and that's just the way it is. The thing is, there's only so much we can do outside of prayer and some basic preparedness. The rest is up to God.

I just hate to see the people that just don't get it, especially the older ones, keep on living as though nothing has changed, as though it's still 30 years ago when America was on top and the rest of the world be damned. Because that's an illusion being sold to them by the money interests to buy enough time to suck every last bit of wealth out of the system. And when they've done it and they pull the plug all the people that bought into their snake oil will be shocked, confused and angry. And a bad situation will quickly become a nightmare.

And that is the truth.

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