Thursday, May 17, 2007

This Insomnia is out of control

Maybe I should watch insomnia... problem it's not a very good movie. The worst part is that it's becoming difficult to get any work done.

Gold is tracking the Euro Price right now $663.25 One may think that gold would just be the price of gold... But no. Gold is traded in U.S. Dollars, .This is where it gets sticky, If the dollar falls against the EURO and\or the POUND then suddenly Gold gets cheaper for our European Cousins. This Increases demand for gold, driving the price up.

Now, Gold also trades almost 24/5(gold doesn't trade on Saturday and most of Sunday). At night it trades in Asia, then in the morning in London, then in new york during the day. So, it seems like the price tracks the Euro, most of the night. Then once London opens it tracks the Pound. What is funny is that sometimes the weaker volume will drive the price up$10 during the night, then when New York Opens, Well. Suddenly the price Dives or Jumps, depending on the mood of the new York market.... But the new york Currency market.....

So, Why do the currency's change... Well the idea is that one country is experienced more inflation than the other. Some people in this country will have you believe that inflation is in control in this country... Regardless of the price of food or Oil... Since they get rid of food and Oil in the inflation numbers.... Seriously... Sure people can't afford to buy anything because oil and food are more expensive, Meaning that they then have to make more money, Which drives the price of goods up..... Etc Etc...

Apparently the rest of the world is growing, and experiencing more inflation than the U.S. Is. Problem is that this makes commodities get more expensive Gold, Steel, Iron, Copper, Nickle, Milk, Corn. This demand makes things here more expensive.... and we get .... Yes Inflation.

But No, we aren't experiencing inflation, it's just that things are more expensive... But that's not inflation because we aren't getting any double digit growth.... Except for gold which is falling

After this, somehow the federal government either raises or lowers the interest rate, to either increase or lower the money supply... I can't even figure out how raising the interest rate will either lower or increase the money supply....

Next up.. Will be the crazy notion that the stock market goes up on bad news because it means that the FED won't raise rates, and may lower them.... so, bad news is good news in "The Market"... I wonder how excited they would be if the Market Crashed.. That would be some Great Bad news.......

So, Have I talked about how it's all just a Shell Game, driven by psychology.... When the Music stops, make sure you have a chair.

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All this Catch 22 Crap, and subjective economic numbers, give my logical brain a Tumor.

So, a Sports Reporter asked an Infamous Stock investor, "What should the baseball player that just got a 20 million dollar salary put his money in?"

He said, "Buy a Bond, and Get some Sleep"

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