3/31/03
It appears as though the up move in the stock markets is over. We could still maybe go to 9000 or at best 9200, but I seriously doubt it. Gold is holding in the 325 - 335 area poised for a run up. Long bonds - Treasuries, are holding at about 4% 10 yr. and 5% 30 yr., yields should start to expand.

Economically speaking - everything seems to get slowly but gradually worse. There appears to be a misconception that when the Iraqi War is over the economy will soar. While anything can happen, I just don't see it. All of the economic problems predate 9-11, actually starting under Clinton.

The congressional plan to give less than half of Bush's requested tax (cut) benefits will have less than no effect. In order to turn the economy around, we need to encourage savings and investment. Further, as a country we need to reduce the enormity of debt overhanging individuals, corporations and governments (city, state & federal) We are all too indebted.

Recent PPI and CPI numbers released are starting to suggest rising inflation. While this is a definite possibility, the big risk is a runaway inflation which the Federal Reserve will cause attempting to stop deflation.

Basically what we are looking at is stagnation. No growth, with various industries suffering from deflation (computer, autos, telecoms, etc.) and various industries suffering from inflation (commodities, medical services) ALL AT THE SAME TIME.

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- posted by Arnold @ Monday, March 31, 2003