posted Mar 31, 2004 at 08:13PM
My position is 100% cash. Gold stocks are about the only thing that has potential interest but their sluggishness is something that makes me wary. Can't put my finger on it, but it smacks of liquidity running dry.
History suggests that the high oil prices will cause a recession... a real one. A recession means the American consumer will have to pull their horns in, and everything follows from that. There are no other internal economies that can take over at this time. Recipe for deflation? Yes particularly on the demand side.
The USD. Weak? Yes but considering the news that BOJ won't intervene...surprisingly steady. I have read an interesting speculation that the massive short position on the USD, now knowing that the BOJ wont't be there to take thier bets, may actually get caught in a pickle as everyone is on the same boat.
The yield charts simply cannot be reconciled with the oil price. Something has to give. My impression is that there is no supply crisis, but the price is at crisis levels.
Bullion, gold and silver, have the strongest charts, but both have high levels of highly leveraged speculative involvement, always a percursor to ugliness.