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Wednesday, April 27, 2011

Federal Debt Ceiling and QE3

There is much talk about raising (or not) the U.S. debt ceiling and ending Quantitative Easing Round 2 (QE2). Honestly, I see all this as clumsy posturing. Americans and their leaders do not have the stomachs for living within their means, at least not yet. Obama and Congress are fooling around with $30B cuts, when the deficit is more like $1,400B. The world is awash with U.S. Treasury debt. The Chinese and others are pretty well saturated now. The Federal Reserve will have to continue printing to buy up most of the new bonds and bills issued by the Treasury. Raising the debt ceiling is also a priority for Wall Street - take a look at this. So QE3, in my opinion, is guaranteed. The U.S. will kick the can down the road yet again rather than face a default now.

Thursday, April 21, 2011

Commodities at new highs!

Once again, commodities are at new highs. Some are at new highs, some are close to new highs and the precious metals are currently in the lead. Why is this? Has the reckless printing of money around the world anything to do with it? Or are speculators simultaneously attacking oil, coffee, copper, gold, silver, corn and soybeans? If printing your way to prosperity is the answer, then why doesn't the fed just send every citizen a cheque for $1,000,000. Of course, gasoline prices might just go to $50 a gallon and a 1/2 pint of strawberries might also then cost $35. H'mmm