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Good Morning Friends,
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today is Wednesday December 9, 2009
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Back on the job today friends. Well, that was certainly a nice and well deserved break now wasn't it? So, just what is on my mind this morning you might be wondering? The biggest thing I guess is the stock market and world wide conditions generally. Stocks are receding from their highs of late and this in not entirely unexpected for me. I have slipped more equity into my portfolio so that means I will be having more paper losses than I would have if I had left things alone. I told you before that every time I move into stocks after sitting idle for long periods of time then that is the time when the market begins to correct. So, I suppose the lesson for everyone is to watch my performance and watch the market go down.
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My general feeling about the market is that it is at risk from all of the uncertainty in the world. But, more importantly, I think the market is vulnerable to weakness worldwide and the continuing contagion that is cropping up in country after country. For example, we just had the recent Dubai debacle and now it is Greece's turn to cause havoc for all of us. Sometimes these incidents are just reasons for a market to correct anyway. Don't forget there have been some pretty serious run ups in the market.
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Closer to home, the biggest threats for me are the U.S. economy and its horrendous debts and deficits. That economy is still in terrible shape and the prognosis for recovery is not positive at all. They are trying to spend their way out of the mess that they are in. But, it is a tough sled indeed. There is too much debt and the consumer is down and out. He is simply treading water and cannot really afford to take on more debt anyway. His debt tools have all disappeared because of the losses in housing, the stock market, and his employment prospects. Employment remember, is hovering around the ten percent level. You simply have to understand that the U.S. economy is the creature that keeps the whole world economic system stable or unstable as the case may be. The consumer is hurting and that is what kept the situation alive. The U.S. consumes and Asia provides the products for that consumption.
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And, now the model is broken and that is why we are foundering. China and the other creditors are weary of the U.S. and its ability to carry its load and its responsibilities. That is why they are buying gold and are reluctant to buy U.S. debt. But, in spite of everything U.S. debt is still purchased and is considered to be not that risky. That is only because of the strength of the U.S. dollar as the world's reserve currency though. So, as you can see it is the job of the U.S. politicians and others to keep the dollar as strong as they can. And, they must do this in spite of the out of control spending and the wars in the Middle East. And, this is where we should be focusing our attention in my opinion. The U.S. is trying to get its economy going again - and it is trying to accomplish that by spending its way out of the mess. This is the struggle.
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Who or what caused the mess? Well, the system caused the mess actually. That means that things like globalization and the way the system is set up generally, that is. I have told you about that relationship above and of the relationship between the U.S. consumer and that of the Asians who supply the goods. The system is broken as I have told you. It is broken because of the greed and mismanagement which showed up in the latter part of the Bush Regime. The bankers and their greed pushed the system over the edge and there it hangs on the edge of a precipice. It is crying out for help. But, the people in power have other ideas on their besides rescuing the giant beast and doing the right things. For, the right thing for the bankers and the industrialists is always different than the right thing for everybody else. And, therein dear friends lies the crux of the problem - the beast, in charge of all, continues to founder under the threat of its own ambitions.
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Anyway, so much for the big problems of the world. I have to come back down to earth now and focus on the customer. Yes indeed friends we still have a customer in this part of the world. And, that is my job as a courier - I serve the customer because I know how important this person is.
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P.S. I did not talk much about gold this morning friends, but I am sure you are all aware of the importance of this metal under current conditions. Its price, as you most likely aware, merely highlights for us the importance of current conditions. I, personally would not read much into its current slide. The problems have not gone away in a couple of days.
