Emini Trading Update – Friday 8 Apr 2011 (12:39)
We fell out of the channel on Friday and got the trend break I was expecting (see Thursday’s Emini Trading video). Now this trend move has to play out – form a Pull Back and End of Trend sequence before it’s over.
I’ll be playing any weakness we see on Monday morning.
Links of the day …
Apparently good news that the US Government is being allowed to limp on – spending like drunken sailors. See chart on the left – doesn’t this just blow your mind! You all know what I think about this.
But what is lining up is a colossal battle between the US Government and the Fed. The Fed is signalling (Bernanke’s testimony and Dallas Fed President Richard Fisher’s speech on Friday) that it will not continue to monetize the Government’s deficit indefinitely.
The Fed know that monetizing the deficit leads to hyper-inflation. And Bernanke does not want to go down in history are the Fed Chairman that willfully created hyper-inflation in the US. He already has the legacy of being the guy who missed the largest housing bubble in history!
And this weekend’s settlement between Democrats and Republicans just shows – THEY DON’T GET IT! The gap is vast and they don’t have the balls to say “no” to anyone.
No, you can’t get your over-priced drugs for free. No, you can’t have your Stealth bombers and 820 overseas bases. No, you can’t retire at 55 on 100% of your final year salary and overtime. No, you can’t pay an effective corporate tax rate of 7%.
Karl Denninger is a national treasure and doing a huge service by providing solid analysis and thought-provoking solutions. His latest re-working of the US budget is a beautiful and elegant solution.
But it’s just too late – the US Empire is over and in terminal decline. Entropy has taken over and these things don’t get fixed neatly – they end in seismic shifts and chaos.
From time-to-time I get emails asking “why are your such a Bear?” I just think – why aren’t you? I suppose that is what makes a market 🙂
Don’t miss: Buy and Hold Is Dead … IMHO.
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