The Unthinkable?

"Don't deny what your own eyes are seeing" was my admonishment to traders and brokers over the years...

So let's recap what we are seeing right now:

1. The Fed and Treasury appear to have walked away from the US$ in favor of housing and banking.

I would have thought they would have tried to walk the tight rope, but it appears that both their actions AND their speeches are telling folks to abandon the US$. "Don't deny what your own eyes are seeing".

2. The International Debt Market continues to buy Treasury bonds, notes, and bills - but for how much longer? The Japanese continue to buy, and have accelerated their purchases of, Treasury paper; clearly they believe that deflation is the bigger risk. They better be right, or the Treasury market is going to have one very, very unpleasant day sometime soon. (Disclosure: My biggest holding, bigger than precious metals are Treasury Notes.)

3. The Gold market does not believe in anything except Gold. That market continues to go vertical.

4. Natural Gas consumption denies the industrial pickup that the equity market foresees.

5. Oil prices in US$'s are high enough to tip the US over into another recession.

Given the above, I have no firm conviction on any course of action.

50% of American Children will receive Food Stamps

Before I tackle the recent AP report and study on children in need of food assistance I wanted to say how appalled and horrified I am at the cold blooded murder of innocent, hard working, honest men and women at Fort Hood. I have no insights into this particular tragedy other than that the violation of the sanctity of human life in this incident is beyond my abilities to properly place in its terrible perspective.

Sometimes I despair for my fellow man. This is one of those times.

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I use the "food stamp metric" as part of my analysis of the economy and markets.

The AP reported that 50% of all children, and 90% of "black youngsters", will receive food stamps before they reach adulthood.

How are we to take that? Clearly, it is a positive that children in the U.S. do not go hungry for the most part. What does it say about the parents? Does society, and certain special interest groups in particular, bear responsibility for its contribution to the disintegration of the family unit - or the lack of its formation in the first place?

Children living in poverty tend to have one circumstance in common - their father is missing in action, if you will. That the percentage of children living with both parents receiving food assistance is a fraction of all children receiving food assistance is beyond debate. It would seem that the critical input in this data set to work on would be how to encourage/force/cajole/shame/beg/ the children's fathers TO BE FATHERS.

This is a very complicated issue. For instance, the vast majority of "dead beat dads" are in prison, parole, or probation. Its very tough to provide for your children when you are wearing grey pajamas and eating off paper plates. Guess what happens latter in lives of the children of convicts? This is the "gift that keeps on giving" if you are a lawyer, cop, judge, corrections officer, etc... but the rest of us will not be able to support it for much longer.

This is quite the conundrum.

libertariananimal (at) gmail (d0t) com

Weekly EIA Data

The Weekly Status Report from the U.S. Dept. of Energy' EIA is in, and in no surprise the decline in the volume of imported Oil into the U.S continues to accelerate with year over year imports down 9.6%. With 10 months of data, and given the last 2 year's import decline, I think you can start to draw your own conclusions.