Today’s Call: Yield on 10 US Treasury to fall, price to rise. Currently 2.99%.
Rationale: The combination of the FED downgrading the economic assessment and announcing no further stimulus along with no clear progress on the debt ceiling will cause, paradoxically, talk of a fiscal stimulus package so that authorities can claim to be “doing something.” Problems in Greece will cause most funds to repurchase US Treasuries by default to stay away from the Euro.
Result of Call for June 17, 2011: Dow Jones Industrial Average to rise. Was 12,004, Currently 12,163. Good Call.
Calls to Date: Good Calls: 30, Bad Calls: 25, Batting .545
Key Indicators for Wednesday, June 22, 2011
Copper Price per Lb: $4.10
Oil Price per Barrel: $95.06 A FAILURE TO INFLATE
Corn Price per Bushel: $6.07 MONETARY POLICY IS NOT WORKING
10 Yr US Treasury Bond: 2.99%
FED Target Rate: 0.09% FED IN PERMANENT DESPERATION MODE
Gold Price Per Ounce: $1,549 BENEFITING FROM PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 2.25%
Unemployment Rate: 9.1%
Inflation Rate (CPI): 0.2%
Dow Jones Industrial Average: 12,163
M1 Monetary Base: $1,921,900,000,000 RED ALERT!!!
M2 Monetary Base: $9,084,400,000,000 YIKES!!!
*See FED Perceived Economic Effect Rate Chart at bottom of blog. This rate is the FED Target rate with a 39 month lag, representing the time it takes for the FED Target rate changes to affect the real economy. This is a 39 months head start that the FED member banks have on the rest of us on using the new money that is created.