It's Friday!

Well, 'Ol Chopper (Helicopter Ben) really has his work cut out for him now. Commercial paper is still shrinking. His half point cut sent the DOW skyrocketing. Then gold took off. After gold, then the 10 and 30 year bonds. I've seen more headlines about inflation and recession in the past couple of days than during all of August. I think this rally will be short-lived.

The subject of today's ramble will be speculation on the future. Namely, what will happen when hedge funds trying to catch the next bubble and investors/speculators trying not to get left behind inflation get hammered? What is the next bubble after that? Art? That's a bubble too. I remember hearing weekly stories of record art prices in 1998-99, just before the Dot.Com implosion. The stock market? The stock market has already hit its peak in terms of gold or Euros, and probably won't make a new high in dollar terms. Higher long-term rates will kill the market as soon as earnings start to reflect the reality of bad loans on the books. They can sweep the losses under the rug, but they can't get a good return on equity when it's not there. Real estate? In the right locations, it might actually be a sound investment, but probably not in California. It really depends on how long it takes for the commodity/emerging markets bubble to pop. I put commodities and emerging markets in the same bubble because emerging markets are supplying the demand and monetary inflation that are feeding the bubble. Foreign currencies could do very well, especially those that are not dependent on the U. S. market. The Euro comes to mind. How about companies paying dividends in Euros? I'll have to see what's out there.