Wednesday, October 13, 2010

Melt up, up and away

We're still in the same mode on the market. The dollar falls and commodities like stocks and oil rise. You can see this in real time as the gas prices jump 4 cents every day. It will take a bit longer to show up on the shelves but you can also expect jumps in wheat, sugar, coffee, poultry, beef, and pork. When coupled with the new ethanol ruling today (nothing like clamoring for a few farm votes before a critical election) corn might get very pricey in the next year.

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Trivia question of the night: What was the best performing stock market in the world over the past 5 years?

Answer: Zimbabwe. Now, I'm not implying that our situation is like Zimbabwe but in a country where the currency plummets in value their stock market went from 1,420 to 5,418,000,000,000. Yeah, that's a 5 Trillion! Unfortunately, their dollars aren't worth anything so it's meaningless.

I read a good explanation of how to picture the big numbers we toss around so casually today.

If you want to have a million dollars just put $500 in a box every week for 40 years.

If you want a billion dollars make it $500,000 every week for 40 years.

If you want a trillion dollars you need to put $500,000,000 in a box every week for 40 years. $500 million every week for 40 years. Yikes.

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Not that anyone seems to care about the real economy anymore it's all about Facebook and iCrap, but out in the real world the UCLA Pulse of the Economy Index "fell .5 percent in September after falling 1.0 percent in August, which is the first time the index has experienced a consecutive monthly decline since January 2009."

The money quote from the report "Our economy’s loss in traction is alarming."

Cheers!

1 comment:

The Hermit said...

Folks attitude about gold is what really amazes me. When it was under $300/oz., you couldn't give it away. It was a dead metal. Now, at $1300+/oz., people are going nuts over it. Bernake is printing like crazy. Where do you see the value of the dollar in 1-2 years in terms of purchasing power?