Tuesday May 14 2013
Our headline is a quote form Alan Abelson who wrote for Barrons. He passed away last week.
IEA reports no shortage of oilThis article also notes OPEC production is up. Again my take is that oil prices are hanging around with stock prices at very elevated levels.
If this count is correct, the Dollar is about to experience a third of a third wave up. That would coincide with the fifth wave down in gold so it makese some sense. Friday and Monday were ceertainly impressive up days. If this count is wrong, the dollar will not get through 84. The rest of the week will tell us which is correct.
Japan is providing a lesson in how Bernanke has goosed the stock market higher by doing the same thing.
The red black bars represent the 60% move in the Nikkei Index since last fall. The Black line is the falling value of the yen. A cheaper currency floats all stocks higher with no change in earnings.
All the Central Bankers are now engaged in the same shenanigan. The idea is that a cheaper currency makes one's goods less expensive. As currencies trade against one another this is why the US Dollar is rising.
The Dollar and Oil
Here is another real world implication. Last September the Dollar in green and red made a high and oil sank to 856. In February oil in black was still 85 and the Dollar soared again. Now the Dollar and Oil are at the same level. This will not last. If the Dollar continues to surge, the logical level for oil will be a return to 85.