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Friday, December 05, 2008

Charts of Dollar and Ultrashort Consumer Services

Remember how rosy things looked yesterday morning, with the market shaking off bad economic news? Well, that faded in the afternoon, and today, just rotten economic news is giving the markt its lumps. And yet gold is down despite an apparent weakening trend in the U.S. dollar. Look at a chart of the dollar ...

Maybe the dollar will be able to go higher, but it doesn't look good. So why is gold weaker? I talkeed to a Chicago broker about this late yesterday. He says too many speculators have been burned, and gold buyers are "on strike" until they get lower prices.

Meanwhile, the outlook for the U.S. consumer is awful. Here is a chart for Red-Hot Commodity ETFs subscribers ...
This is a good area for a bounce in the SCC, and the fundamentals for consumers continue to be dismal.

Here is Other News I'm Reading ...

Roubini: "How to Avoid the Horrors of Stag-Deflation"
The US and the global economy are at risk of a severe stag-deflation, a deadly combination of economic stagnation/recession and deflation. A severe global recession will lead to deflationary pressures. Falling demand will lead to lower inflation as companies cut prices to reduce excess inventory. Slack in labour markets from rising unemployment will control labour costs and wage growth. Further slack in commodity markets as prices fall will lead to sharply lower inflation. Thus inflation in advanced economies will fall towards the 1 per cent level that leads to concerns about deflation.

Employers in U.S. Cut 533,000 Jobs, Most in 34 Years, as Recession Deepens U.S. employers eliminated jobs in November at the fastest pace in 34 years and the unemployment rate jumped as the yearlong recession engulfing the world’s largest economy deepened.

China November Car Sales Drop 10%, Most in Three Years, on Cooling Economy China's November car sales plunged 10 percent, the biggest decline in more than three years, as a cooling economy caused consumers to curb spending in the world's second-biggest auto market.

'Ponzi Scheme' at Citi
A new Citigroup scandal is engulfing Robert Rubin and his former disciple Chuck Prince for their roles in an alleged Ponzi-style scheme that's now choking world banking. Director Rubin and ousted CEO Prince - and their lieutenants over the past five years - are named in a federal lawsuit for an alleged complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths.

But there's always an optimist in the crowd ...

Fundamentals of Commodities Markets Are `Unimpaired,' Jim Rogers Predicts The fundamentals of commodities are “unimpaired” and prices will rebound when a lack of new supply leads to shortages, said Jim Rogers, chairman of Rogers Holdings.

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