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..There's a little Samuel Pepys in all of us..

Thursday, May 18, 2006

Ahh, the world is reeling in the past couple of days of profit taking on the markets..
One had to realize, that with the Dow reaching it's highest levels ever, gold back to 1980's levels, oil supplies in doubt with the developing situations in the Middle East, investors would take a skim. The Indian Market, the Sensex, dropped by 7.1% today. The Hang Seng and all the others are suffering from the same malaise, that of corporate and individual cash inflow.
Nothing really to worry about in itself, but the American CPI could cause problems over a slightly longer term.
If the States does decide to raise interest rates, it's going to involve not only the long term borrowers the likes of corporate giants, but also those small businesses. Unemployment will rise as Joe's Market lets it's unessential workers go, State welfare costs will spiral upwards, and we'd be looking at another recession, if a mini one at that.
It's not what George wants to leave as his legacy.
But, optimism leads one to believe that OPEC will raise it's productivity levels, that gold and other precious metals will rebound, and investors will once again settle into the levels of complaincency they've enjoyed for the past decade or so.
It has been said, that as the US economy goes, so goes the rest of the world, and what perhaps is the real reason behind this temporary panic in the markets, is the proclaimed moves by several big economies towards non-fossil fuel sources. This is a manufactured blip, designed to underline the fact this world runs on oil, and while the Middle East has any clout whatsoever, it will play with it's customers economies at will.
This is one of the prime reasons research into alternate fuel sources should be accelerated. Now, acceleration is defined as a change in the rate of velocity per unit of time, and we are running out of the latter factor. There is going to be continuous dicord in the OPEC consortium, and continuous means just that. Perpetual.
Time we cut the oil umbillicus, with prejudice, if necissary.
George is still wrestling with the westernisation of Iraq, while dancing with the Iraqi's on the nuclear front, and the Sudanese by interfering with the internal problem in Darfour.
Now it's a given it is not politically correct to say 'let them work it out themselves'. It would be considered naive for us to think that they've millennia of expertise, having dealt with drought, famine, internicene wars and genocide, and that they should be left to their own devices. Bono would certainly chastise those of us in the West who enjoy a good meal once in a while, while strangers are starving thousands of miles away.
But, I'll bet Bono, and all the other celebrities who've tossed their hats in the political ring, never consider missing breakfast in support of those starving masses. It's a chimera, designed to impress the impressionable. It's also a good tax dodge, to donate towards an incurable disease.
So let the markets fall.. it's a correction for the time being.
When interest rates begin to rise, accept that as well, as a societal adujstment.
A side note here. There is growing pressure on Tony to name a date for his vacating No.10, and that, for us in these British Isles and for those we call 'allies', is a cause for concern. Whoever takes the reins could well lead us into closer ties with the EU, and that, for us, would be catastrophic.
Rumania and Bulgaria for God's sake. Do we really want to tie our economy with criminals? For, in fact, those states are developing normally, which includes at this point, anarchy.
Whatever may be watching over us all, keep us away from a developing hegemonic economy. Let us stay with those who've gone through the Wild West stage, like, Canada.

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