hedgefundlive.com — For a moment I will back away from pontificating on the Middle East and the markets ability to ignore the severe impact it could have on our economy. I will focus on inflation and the fact that QE2 is coming to an end. Do I need to recap how many of the pundits referred to the rally of the last 3 months as the QE rally? Then we will see the first real inflationary cycle in this country that we have seen in many years. This is not some fictitious fear, it is happening as we speak.
THE CONSUMER IS GOING TO TIGHTEN THE PURSE STRINGS. The consumer is the driver of the economy. Once again I find myself staring into a delusional market. I awake to hear that Hugo Chavez is the world saviour . That is like saying Stalin would have been the best guy to convince Hitler that the Jews aren’t all that bad, and he should give them a chance. Have we all lost our mind? We sold off and then rallied yesterday and apparently are seeing follow through today. But we will, if not today then tomorrow, fail. We will break 1300 during the next bunch of session and eventually test 1290 on the S&P futures. Nothing has changed on the geopolitical front.
Our economic numbers continue to be a look back to prior Libyan events. Chavez has only one thing on his mind, “is it possible that this could occur in Venezuela”. He hates the USA. Chavez is a pendejo. If Hugo cannot make progress, I am sure Kim Jong is available. But the again let us not forget that big oil has a lot of money riding on Chavez. CVX has a big investment in Chavez.
It would not surprise me if Big Oil were behind this as opposed to The Arab League, though they really are the same thing. There will be no peace in Libya until Kaddafi is dead. Yemen coming to terms with its rulers opens up a new training facility for al Qaeda. Bahrain will not end quietly, and Saudi Arabia is nervous.
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