Hey Folks!

There are a lot of things on everyone’s mind these days. Heck between Libya’s self-sabotaging and the related threat to the US consumer’s weak pocket it feels like some sort of pounding. The most recent GDP number was not that bad, but it just happened to go in the wrong direction. While my initial thought was that Bernanke was going to pull out the checkbook again, I’m inclined to think that may not happen. Now if oil goes to $200 and the same folks are still in power, then I think QE3 is not just a thought anymore. I think the US consumer is in for some surprises though. I don’t think the US understands the implications of a devalued dollar. To be honest I don’t know if anyone does. In the past most countries that devalued their currency had to do so with the reference of a strong dollar in the background (or foreground). If the dollar is devalued then where is the reference? China? A basket of currencies? I don’t think so. So, in my opinion this is all uncharted waters. Keep in mind that there is a difference between a fluctuating strong currency and a flat out devalued one. I’ve said it before and I’ll say it again, this whole “I have the worst currency” competition in the name of higher imports, just isn’t right. Whoever got us on this spiraling merry-go-round ought to be sentenced to 20 years in the electric chair.

Stuff I’m reading

China talking a good game about inflation – story here

 50’s webinar, great fib based analysis – webinar here

Great Barrons article on Adam Smith biography – story here

Hedge funds are into munis it seems, or at least munis want us to think so – article here

Looks like Amazon is in the tax collector’s cross hairs – article here

Anatomy of a market correction – nice discussion – may or may not agree with it though – discussion here

The Grain Report – FUNDS RE-CALIBRATE – story here

 A discussion of long-term economic impact of Crude Oil price rise – here

A quick overview of the impact of budget cuts and such on US economic growth – for whatever it’s worth – article here

Kathy Lien discussion on the impact of an Oil Crisis on the US Dollar – good historical perspective – article here

In case you missed it – GDP was revised lower – explanation here

Inflation is coming you’d best be prepared – Interesting read about how to prepare here

More on inflation in emerging markets and it will be playing in a neighborhood near you soon – article here

In case you missed it Amazon is challenging Netflix in a pretty smart way – read up on it here

Interesting article on capital flows and their effect on Asia – If you trade currencies you should read this one – read it here

Warren Buffett’s Annual Letter to Shareholders – Article and link to letter here

Buffett’s hunting with an “elephant gun” looking to close some deals, I guess backing a democrat can be quite profitable in a derivative sort of way – article here

Oil contango and backwardation discussion, learn what the heck these terms mean here

Bears are have been declared an endangered species, short interest is falling – can you say bullish sentiment bubble? – read about it here

An interesting discussion (plea) about China letting go of some Yuan’s – Wishful I think – you can read it here

Well, I hope I didn’t give you too much homework.  Let’s keep fundamentals in our heads this week as we trade our technical levels (those of you that trade technically).  I wish you all the best.

May the pip gods smile upon you this week.

Keith Rivas – @4xguy