"There you go again!" - Ronald Reagan
"It's a story about us spending money we don't have on things we don't need to create impressions that won't last on people we don't care about." - Tim Jackson (he should have added: "but who we would like to have sex with).
Well, the Fed did it again.
In an effort to re-blow the housing bubble they blew bubbles elsewhere - primarily in precious metals.
In an effort to help exports they have killed the US$, leaving Oil in the mid $80's... and Oil is problem NUMERO UNO for our trade deficit. In other words, "let's help our exporters by increasing our foreign debt for Oil" - this is not a strategy that any rational person would pursue.
It is simply not possible to know what the hell you are doing in a world in which the rule makers change the rules day to day and week to week. IF, and its a BIIIIIIGGGGGG "IF", you could forecast the policy response with ANY accuracy you MIGHT make heads or tails out of this... but considering the FEd DOES KNOW what the policy response is going to be.... and considering how badly they have f*&^#!ed everything up... you get the idea.
Oil in the mid $80's is very near to dragging the economy back to the abyss. Oil over $100 would shoot the economy in the head... and then drag the economy back to the abyss. Either way, you end up in the abyss.
Here's another thought.... Oil in the mid $80's with 10% unemployment? With REAL unemployment closer to 20%? I would not have thought possible.
It just gets weirder and weirder.