Which Inning and Game are we Playing?

Petrol dollars are greasing the world's economies....a major positive....a lot like the last couple of years...people and investors don't fully appreciate this...higher prices are a function of demand and supply....we probably have a bit of short covering and bad hedges being unwound right now...after a 100% move off the lows...stop focusing on spot crude prices they really are irrelevant.

As global investors are quickly coming up the learning curve of the new Chairman of WDC, LLC's newest auto company, new insurance company, new banks and housing finance companies, (health care next) followed by hydrocarbons, they are realizing there is what we call in the real world....empty suits behind the business plan. Support for the dollar is falling fast and the interest in owning bonds sold by this administration will become toxic. We hope that this learning curve followed by Americans is in fact quick enough to stop the hemorrhaging....maybe mid term elections 2010 will help....New taxes across the board (will be retroactive) should allow for proper shock and awe.

It should be no surprise Gold remains the best performing asset class in the world this decade.....adjusted for past and future inflation it is still cheap.
....and completely misunderstood.

The current great recession is going to be talked about much like the great coming dollar decline (devaluation).....get ready....everything is about to cost a whole lot more very soon.....inventories are almost done on their draw downs.

Question: How much should government motors charge for a new car? Should it be sold for a loss? I.E. subsidized by US tax payers?? Who will make that call? Who would want to serve on that board?

Get used to the expression Unallotment which is a line item veto...this will be he only way astute governors can stop spending by unread elected officials.

The equity market continues to impress and narrow....the USA is still the worst performing market in the world year to date....sorry...only Poland, Switzerland and Japan are worse...negative for the year!

Best performers? Brazil +63%, Hong Kong +32%, India +57%, Norway +41% and Russia +67%

Our theme of creditor nations over debtor nations (performance ) is holding steady. Same with hard assets that are over capitalized and in leadership positions. The rally has been powerful....greatest in a very long time...over bought from an over sold position...time will tell....but the trends are firmly in place.....stay away from anything the boys in WDC, LLC are interested in...for sure...the easiest call remains: WE KNOW WHERE WE DON'T WANT TO BE.

Danny Boy seen here has the ball in his court.