Comments on: 3 numbers spell danger: $100, 3.44, 20 Tue, 24 Mar 2015 16:54:45 +0000 hourly 1 By: NukerDoggie Mon, 28 Feb 2011 18:36:14 +0000 The unfolding price hit to (of all things) crude oil – resulting from (of all things) a monster wave of democratic uprisings in the Middle East, almost smells like the heavy hand of some superhuman devil intent on creating a ‘perfect storm’ against the developed economies. Let me say this a different way: if I was asked to write a story about the impending end of life as we know it in the West, I couldn’t have dreamed up a more perfect, but bizarre and unlikely story than what is actually now unfolding on the front pages. The skyrocketing oil price, if it is sustained, has the unique ability to create a ‘feedback loop’ of enormous destructive potential to the finances and economies of the West, as another Reuters analysis this morning observed. James Saft – you are right to be deeply concerned. Wouldn’t it be interesting if the Fed’s QE2 came to be seen as a major factor in producing the latest commodities price surge, which in turn helped to push the already-suffering peoples in the Middle East and elsewhere past their limits, and into the streets, which in turn produced the price hit on oil we’re now worrying about? It would be a classic case of the Fed shooting itself in the foot, no? I only task the experts to take a look at how closely this most recent commodities bubble coincided with QE2, as investors piled into ‘hard assets’ like commodites. This stuff is all connected.

By: AdamSmith Sat, 26 Feb 2011 18:12:36 +0000 James, you said,
“The second is the yield on 10-year U.S. Treasury notes, and if you are keeping score, they have dropped a rapid 28 basis points from early February, a drop that is telling you that bond investors do not believe the U.S. economy can easily withstand $100 oil.”

You neglected to mention that the “bond investors” include the Fed, which has been buying up everything in sight.

By: Missinginaction Thu, 24 Feb 2011 22:49:42 +0000 Read this piece carefully, then go back to James’ excellent piece on February 10th titled “Bonds, risk and Bernankes Intentions”.

Geez…..deflation, demand pull inflation, supply push inflation?? Easy monetary policy, QE, QE2, maybe QE3 (if you read the last paragraph here) who can say?

We’re living in the land of confusion. The scary part of all this is that it seems that no one truely understands what we have going on here.

How does one value risk (or even know what risk is out there) in this environment?