All the headlines last month were “investors flee commodities as the financial storm stokes fears of recession and a flight to quality,” now they are all saying “investors flock to commodities as the financial storm persists and intensifies a flight to quality.” Do people still take business reporters seriously? These guys don’t have a clue.
There was no commodities bubble, there were forced sellers. There is a ton of inflation and the only thing worth owning right now is precious metals and oil. Soon, we will be including Asian stocks and agriculture in there as well.
…That sounds familiar. Oh yeah, NOTHING HAS CHANGED.
hedgy       /hej-ee/
-noun
1.   a slightly less than average intelligence, usually 20-something male, working for or managing a hedge fund that uses flashing color signals and/or lines drawn on charts (sometimes by fancy sounding computer programs written by broke never-invested-outside-a-mutual-fund PHD’s) to destroy wealth.
2.   a person so incapable of independent thought they outsource all their decisions then refuse to accept responsibility for the consequences.
3.   a person who hides their inability to understand even the most basic fundamental realities of their discipline with an ostentatious lifestyle funded by debt.
4.   a person who everybody subconsciously wants to see fail at life.
If China decided to diversify even a small fraction of its current US dollar reserves into gold, they would certainly cause the price to increase dramatically which could prove to be quite a lucrative strategy, especially given the size of their domestic gold production today. Is it possible western powers are flexing their muscles by demonstrating how unprofitable such a move would be by dropping the price of gold and reversing the course of the dollar with such ease? I can imaging the conversation between a Chinese and American official would go something like this…
The Federal Reserve is printing dollars to stimulate consumption, but since most products Americans consume are produced abroad their dollars flood the world and foreign governments print their domestic currencies to take them off the market and stabilize the exchange rates. That is literally the inflation that is ravaging emerging markets, meanwhile foreign leaders persist in their vain attempt to maintain the status quo. The only possible reason they would follow such a stupid policy is a false belief that American demand is driving global economic growth.
I’m tired of reading endless expressions of grief for the demise of traditional media. They are disappearing, but largely due to their own ineptitude. They were too stupid to recognize that an outdated distribution model has the potential to damage a business, especially if its customers consume the product with gritted teeth — there is a lesson here for the music industry and Microsoft.
