Jobs Jobs Jobs

Well we have been waiting all week for tomorrows jobs report. The question is how much bad news we are really prepared to absorb without a major selloff. Today's late afternoon trading was surprising as we rallied in the last few minutes. Tomorrow we will interview Matt McCall of Penn Financial. Matt has made bullish comments in the recent weeks and I am looking forward to finding our more about his stance. Today's trade in Natural Gas really didn't make my recent inflation thesis look very good. I have not changed my mind and I will be looking to add to my UNG if it drops below $22.75.

For those that are arguing we will not see inflation for a very long time---did you hear about the proposed stimulus? The one that may be close to a Trillion Dollars. Yes TRILLION. Mish Shedlock argues that the dollar is going to stay strong because other countries are printing money just as fast as the United States. I have tremendous respect for Mish, but I respectfully disagree that the dollar can hold its value. First and foremeost I can't see any country that is as dependent on debt as are we. China stimulus will come from surplus dollars and ours will be financed. I differ from traditional theories as I don't believe that deficits are bad for the economy. I see the stimulus being effective in starting the economy and INFLATION.

Credit is beginning to flow---slowly. Housing still needs to see improvement and I think it will take a while for us to reach the bottom. Investor Confidence is another very important unknown today. We are seeing many people that have lost confidence as they saw their 401K's wilt away---and then we add Madoff to the mix and we have seen risk tolerance substantially decrease in the past few months. I am tired of hearing about the money on the sidelines---much of it may stay on the sidelines for quite a while. I am not a bull right now---even though I thought the late afternoon action was encouraging. I still favor commodities as I think we will see more investors choose those investments as the economy begins to turn. The individual investor has never been able to invest in commodities as easily as they can now. I strongly believe that we will see more dollars flow into commodities than ever before. I would argue that there will be a higher "speculative premium" in commodities this time around. As we see signs of inflation this premium will get higher and fear will get worse. If you don't believe me---bookmark this post and come back in 18 months.

I would not be so convinced about inflation if we were in a true free market system. The government believes that they must inject money to get the economy going. I believe that we are at a place where if they do not---we would see very dire circumstances. We are paying for the Greenspan policies of avoiding recession at all costs. When do we take our medicine? We must become more efficient??? we can't do it by propping up every industry that runs to Washington. We could debate this one all day long but the truth is that we are not going to take our medicine and we are HEADED FOR INFLATION. I am holding UDN.

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