Rationale: Oil was oversold today on the announcement to release 60 million gallons of oil into the global supply from strategic reserves with 30 million gallons coming from the United States reserve. The 60 million gallons does not even represent one day’s worth of global oil consumption. In other words, this is a token announcement. The world has more of a money supply problem than an oil supply problem. Both are policy problems which will not be soon resolved. These problems will keep the price of oil in dollar terms on an upward trajectory.
Calls to Date: Good Calls: 31, Bad Calls: 25, Batting .553
Key Indicators for Thursday, June 23, 2011
Gold Price Per Ounce: $1,521 BENEFITING FROM PERMANENT UNCERTAINTY
MINT Perceived Target Rate*: 2.25%
Unemployment Rate: 9.1%
Inflation Rate (CPI): 0.2%
Dow Jones Industrial Average: 12,050
M1 Monetary Base: $1,895,400,000,000 RED ALERT!!!
M2 Monetary Base: $9,086,900,000,000 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.