[eastbay]

I agree with you Jack... but try explaining that to my dear wife and that pestering, nagging, idiotic sell-gremlin constantly whistering away into my ear.

I'm keeping my $$ away from cash (very contrarian at this point) because I don't believe 5% is going to mean much pretty soon. Therefore I'm leaving it in the usual oil/oil svc sector funds and riding the market to enjoy mid-term gains due to soon- to- be- expected inflationary pressures which will make the cash guys cry.

[eastbay]

I agree with you Jack... but try explaining that to my dear wife and that pestering, nagging, idiotic sell-gremlin constantly whistering away into my ear.

I'm keeping my $$ away from cash (very contrarian at this point) because I don't believe 5% isn't going to mean much pretty soon and leaving it in the usual oil/oil svc sector funds and riding the market to enjoy mid-term gains due to soon- to- be- expected inflationary pressures.

[Tyler_JC]

$this->bbcode_second_pass_quote('seahorse2', '
')No inflation? Go buy some milk, cheese, etc. In food and energy, there is inflation. You mention prices of cars and houses are STAGNATING, this is called stagflation, which is bad all the way around.

[eastbay]

I'm not sure what it is that's supposedly going up in price this past year or two, but it certainly and thankfully isn't the few things we buy.

But that situation will probably change in the short to mid-term.

[skiwi]

Currency: NZ and Aussie dollar keep sliding

$this->bbcode_second_pass_quote('', 'T')he New Zealand dollar continued streaking downwards overnight, while the first signs of petrol price rises started to appear..

..On world markets overnight the big winner was the yen, which had its biggest one-day gain versus the greenback in almost nine years as investors unwound risky trades financed with borrowed yen on fears of a global funding crisis.

The yen soared against all major currencies and hit its strongest level since November against the euro as the unwinding of carry trades accelerated on evidence companies across the globe were having increasing difficulty accessing credit...

..The Australian and New Zealand dollars were on track for their steepest daily declines against the yen in more than two decades.

The Australian dollar fell 7.1 per cent against the yen in intraday trading, which would be its biggest drop in 21 years, according to Reuters data. And the New Zealand dollar slid 7.8 per cent, its biggest decline in 20 years, to trade below 76 yen, having been at 84.5 yen around 5.45am yesterday.

The Australian dollar has now lost more than 14 per cent in the last six sessions at current prices, while the New Zealand dollar is down about 17 per cent against the yen.

[seahorse]

Tyler,

What I'm trying to point out is the risk of stagflation, which I think is here or close to being here. The Fed is damned if they do (lowe rates) damned if they don't.

$this->bbcode_second_pass_quote('', 'S')tagflation is a problem because the two principal tools for directing the economy, fiscal policy and monetary policy, offer only trade offs between growth and inflation. A central bank can either slow growth to reduce inflationary pressures, or it can allow general increases in price to occur in order to stimulate growth. Stagflation creates a dilemma in that efforts to correct stagnation only worsen inflation, and vice versa. The dilemma in monetary policy is instructive. The central bank can make one of two choices, each with negative outcomes. First, the bank can choose to stimulate the economy and create jobs by increasing the money supply (by purchasing government debt), but this risks boosting the pace of inflation. The other choice is to pursue a tight monetary policy (reducing government debt purchases in order to raise interest rates) to reduce inflation, at the risk of higher unemployment and slower output growth.

[eastbay]

I'm beginning to think that the market is reacting and acting as if there is no longer any such thing as 'long-term'.

Look at the P/E of the major oil companies. Look at the feeding frenzy of the past few years in the mortgage market.

In fact, the market may be acting more rationally than many think. If so, we're in really big trouble much sooner than many of us here anticipated.

[Eli]

The Yen is making another run at it 112.83.