Shenandoah

And another month comes to a close

July 31, 2007 on 9:08 am | In Old Posts |

And with July coming to a roaring close, I look for very little substantive news or events from our markets today. Of course this means that will probably rise 400 or drop 400 on the Dow, but that’s no longer the main focus and never really has been for this blog or the show that I do courtesy of Steve Quayle. What I have found far more interesting is that the “rally” in the U.S. Dollar Index has fizzled as many predicted and the decline is stair stepping it’s way back down towards the critical 80 mark. Last night as mentioned on my show, the infamous “Cramer” on Bubblevision actually sounded like me! Then he went and proclaimed his cure for all the market’s ills by begging the Fed to initiate a 1% rate cut in the Fed Funds rate. That of course would be viewed as triple bonus time for the investing public, but as usual he did not tell the dark side of such a move. The collapse of the dollar would be accelerated and Americans would enjoy the kind of classic Jimmy Carter inflation that so many seem to yearn for. This has been a strange month and the events underway seem to be laying the groundwork for so many of the dire predictions this writer has been warning about for the past year. While the dollar collapse seems like a minor event, the behavior of the dollar and it’s relationship to commodities is way out of kilter a the moment and will eventually return to normal.

Your reading assignment for today was provided courtesy of Bloomberg in the article Bear, Lehman, Merrill, Goldman Traded as Junk, Derivatives Show which really points to a true indication of how dire the situation is becoming. Even old Cramer stated that Bear should be trading closer to 70 last night on his show! It’s only a matter of time before all of the individuals realize that the big boys have been sneaking out through the exits quietly and then they will all rush to get out also. That will be the day or week when the word “volatility” gets abused like a Mike Vick pet. Be very conservative my friends as what we are witnessing is such an interesting parallel to our past that I fear the ignorance of the masses will punish so many, so severely that the concept of an orderly market will soon be impossible.

Thanks to Kitco for this chart which I shall post on occasion for all of us to watch….August will be the month of storms in the Atlantic and on Wall Street….