The Iraqi brothers grimm are no more. I hope you took note of their date
of finding, July 22. War started (birth date) the day prior to the March
equinox. The US papers labeled the event a 'turning point' in the Iraqi
struggle. As one would expect at 120 degrees.
I was asked a question about the spi, where to from here, so here are
some thoughts. Looks to me now that the July top I gave some thoughts to
earlier, has been more of a sideways pattern of accumulation. But the
maths are more important. The US markets are pushing the limits of the
ranges up now, so a weekly mid point retracement is due over the next
three months. The SPI however is slowly grinding out the repeat run of
the first range out, April 30 top, minus the Mar 13 low, added to May 20
low. Possible numbers and time frames to watch anyway.
The US released consumer confidence numbers this week that were poor,
not that I follow such stuff, but the reaction was interesting; the
market hardly moved, which indicates to me the market is looking further
out than just these numbers and is expecting good news for the rest of
Some of the metals, zinc, copper, silver, have broken out of some years
of an accumulation base this week. May be indicating a belief that
industrial production is set to improve substantially. I would move the
hands of our economic clock now to between 8 and 9 am. This is echoed in
our stock market at the moment where there is stacks of good value small
cap stocks also moving off bases (tne, arl, aun, ajl, ane, cnd, maq,
fea, ytl to name a few).
More important however is the efforts by all the Presidents men to
ensure he is re elected;
- Massive deficit financing, ie the US government issuing bonds and
notes on a scale never before seen, it is just huge. Fractional reserve
banking at its finest, i.e. the issue of credit as a debt, backed by the
government's power to tax, for future generations to payoff. The banks
just love it.
- Large tax cuts favoring the wealthy end of town (I am told it will
- US central bankers, well one of them anyway, a certain Ben Bernanke,
saying last week "we should be willing to cut the funds rate to zero,
should that prove necessary to provide the required support to the
economy" (I would insert 2004 presidential election in between the lines
NEVER BEFORE IN THE HISTORY OF THE UNIVERSE HAVE ASSET PRICES DEFLATED
WHILST THIS IS HAPPENING. Got that.
The collapse of asset prices has always, in the past, without exception,
been preceded by interest rate rises, and / or government budget
tightening. Interest rates, we watch the yield curve. Budget tightening,
watch the government accounts naturally. And the bigger they are...the
harder they fall.
To some other matters:
There is possibly only one sport the French practice more often than
cycling, and that is ballooning. This month sees the world ballooning
championships, would you believe it, right here in down town Mars La
Tour. They go up morning and evening, not hundreds, but thousands, using
a dis-used US world war II air force base just down the road. Quite a
sight in the evenings. (Too early in the morning for me to catch...)
And for something even more bananas, my chasing of books via the net
unearthed this recent publication of 17/6/03, (I know nothing of the
book, nor what it purports to say), titled 'American massacre, the
tragedy of Mountain Meadows, September 11th, 1857.
Ahhh the date you say. Look a bit deeper, 2001 minus 1857 is how many
years?? yep, that's what I said too... mmmm
1857 being a very difficult year, largest US depression to that time.
Following is a quote, one of many about past cyclical lows I have
unearthed so far:
"It is a gloomy moment in history. Not for many years - not in the
lifetime of most men who read this paper- has their been so much grave
and deep apprehension; never has the future seemed so incalculable as at
this time. In our own country there is universal commercial prostration
and panic, and thousands of our poorest fellow citizens are turned out
against the approaching winter without employment, and without the
prospect of it. In France the political cauldron seethes and bubbles
with uncertainty; Russia hangs, as usual, like a cloud, dark and silent
upon the horizon of Europe; while all the energies, resources and
influences of the British empire are sorely tried, and are yet to be
tried more sorely."
From Harpers weekly, vol I, page 642, Oct 10 1857