On a Roll Today!

Important stuff first; trades: Sold PDC today. After it's recent lows around $11.00 I think it's time to cut my losses. They stand at 16%. Mostly, I sold this to make room for FXP. I think that with their support from the U.S. consumer crumbling at the same time they are paying record high commodity prices, their economy will be squeezed to the breaking point.

Next, more posts from the Winterwatch. I won't post what I'm responding to, the link will suffice for that.

"I don’t think that the current trend of price deflation in discretionary goods versus necessary goods is a result of labor supply/capital ratios. I think it has to do with the fact that price appreciation is being concentrated in the most basic and elementary materials of production. Let me explain myself another way. Two and a half years ago, we had the peak of the housing bubble euphoria. Now we have skyrocketing prices in coal and iron ore and plunging house prices. What’s the difference? Maybe it’s the added labor that goes into building a house. But if labor was the cause, I think we would see downward pressure on labor costs. Instead, wages are rising, especially in China which is the driver of coal and iron prices. I think that it’s more likely that basic materials are rising as the wave passes from end products to beginning materials. Give it a year, and the wave will move on and prices will be in freefall. Just like housing."