Back to Normal
Yesterday I talked about one of the indicators that I like to watch for indications of a coming change in direction of the stock market. If you look closely at that chart, you see that yesterday, there was a dramatic change in direction at a crucial level, however the moving averages that will sustain a prolonged change still have to catch up. So we are early in getting back to normal.
Interest rate levels need to jell with the people. Rates between 2.5 and 3.5 are not high rates, in fact I think congress would do everyone a favor by making 3.5 % a hard rate from which the FED could only move if there was something dramatic going on, and in no case for more than a year, and never below 1.0 %.
The rise of the dollar and decline of oil prices are completing some long term background views that I have expressed since the beginning of the year. The dollar no doubt is benefitting from the stupidity of the Steve Bannon influenced Brexit moves by England plus the stupidity of huge levels of liquidity added to the U.S. economy by the FED and Treasury over the past two years. On a relative basis the US is sitting in a good place. High Energy prices benefitted mostly from Ukraine, and that area is seemingly becoming a stalemate.
At the moment US politics remains a nest of whores. Biden was a good choice when Trump was the other possibility, but Biden has way too big an Ego and little sense of how to get major economic projects in place to be the positive force needed now. Climate change has the potential to be the major driving force of the economy, but at the moment we only see the negative side of it, the ramifications of rising temperatures, and unnatural precipitation patterns. How many of us know the name of the person heading up the Climate Change initiative. This should be the most known name in America, more known than Biden’s, as he is what he initially said he was, the caretaker. But what we have is a Climate Change head with basically experience in regulation, not Big Positive policy. You have to go to google to find her name.