I was buying groceries the other day and I noticed the price of 'Souse' was $2.00 per pound. If you don't know, souse is a spam-like mixture of pig rinds and pig snouts. Yummy! Most people wouldn't touch this stuff but in hard times, we can't afford to waste anything. But $2.00 per pound? My mercy, is inflation a beast!! Yes, I know the liars that we elect to govern us claim that inflation does not exist but these are the same people that perpetuate the myth of a 'strong dollar' policy while they do everything in their incompetent power to destroy the buck's power every day. This results, of course, in inflation. Count it or not. Reinvent formulas to say there is none. Whatever. Our government is a lie. Everyday. All day. Lies, lies, and more lies. If there is no inflation, how in the world does a package of souse, at any weight, deserve a price of $2.00 per pound?
The reason for inflation and the denial of such inflation is simple. The economy is stuck in a rut and looks destined for a slow-bleed death. Our government could pull us out of the economic death spiral but that would require all of Congress, all of the House, and all of the White House to disband and go home for good never to bother us again. They are all incompetent idiots void of intellect or economic understanding. Our only chance is for them all to lose their path to the capital building and never return. Maybe they should all convene at Pelosi's wine ranch to contemplate the sequence - destruction of California, destruction of America, destruction of the entire Western Hemisphere, etc... Well, Pelosi can already click off the first two. There's a real 'jenuis' at work! The truth is, our government is trying to revive the economy with good old fashion inflation. The Fed is supplying the exorbitant supply of money and credit. Our elected officials have abandoned responsibility to their constituents by becoming a lap dog to every wish of the Federal Reserve. No one knows anything. The only strategy employed at the moment is to throw money at the problem. Number one, that won't help. Number two, it causes inflation. Number three, it is an exercise in stupidity. At best, all the extra money will only blow a stock market bubble even bigger. At worse, our money becomes worth less than the paper on which it is printed.
Isn't it curious that the dunderheads running the show are trying to expand debt when debt has already drowned the American public? Soon, half of all mortgages will be under water and the government thinks it is a good idea to boost home ownership through first time buyer credits. That will only accelerate the drowning. Of course, the government does have ownership in the lenders. Isn't it curious that the government instituted the 'cash for clunkers' program to spur auto sales at a time when auto loan delinquencies are rising. Of course, the government does have ownership in the car makers. Isn't it curious that the government has their talking puppets out touting economic recovery when unemployment is growing by the tens of thousands every week? Of course, government employees now make two or three times the salary of the luckily employed private sector populace. The elite have arrived. Now they need to placate the serfs. So they lie and cheer us on while we dig our debt graves deeper.
The chart below is a look at the Dow last week with 10-minute bars. You can see that the PPT kept the market higher to lock in the August gains that ended Monday. Tuesday was met with an immediate and harsh selloff. The PPT wrestled control of market direction from the sellers on Wednesday and then bolted the indexes higher on Thursday with classic PPT micro-thrusts of buying at the end of the day. Obviously wanting to get started on their Labor Day weekend a bit early, the PPT elected to pop the markets higher on Friday at 11 in the morning rather than wait till their prescribed 3 o'clock rally hour in the afternoon. Bravo! Well played, gents. But, next week is yet another week and the picture ain't getting any brighter. Each rally carries us higher and higher to bubblicious territory and the real news is really not good. The clunker stimulus is over. The housing stimulus soon will be as well. Souse is $2.00 per pound and climbing. The average American is losing their footing on the mountain of affluence.
My best advice is don't fight the PPT. They have the only legal right in the world to use counterfeit money. Hey, maybe that's what we should call the new market - a 'counterfeit market'! Enjoy! Just send me royalties on the copyright usage. Next stop - Dow 10,500. Why? Because the PPT wants us there!
DJIA 5 days ending 9/4/09 10 min bars
Chart courtesy StockCharts.com