Economic Ruminating

Oil price up today. Duh!. Yesterday the Fed cut interest rates, so investments flowed to the Euro and other currencies of countries holding interest rates high. Of course the value of the dollar against those currencies fell, and since crude oil is priced in dollars. Well, duh! (Of course crude oil just got cheaper in all those other currencies.

Meanwhile, the corn from which we make Corn Flakes is at record highs. Cows eat it, too, of course, meaning steak is also at record highs. Is someone going to explain to me why using our food for fuel is a good thing? I didn’t think so.

Some fool on television was arguing that consumer spending will be strong – carry the economy – through the quarter, meaning Christmas. Well... The currency is inflating. (How is devaluation against other currencies in a “global economy” not inflation?) Real estate has cratered, mortgages are in default, debt is at historic highs, there’s no more “home equity” to convert to cash, and the consumer is going on a spending spree?

It reminds me of the time I heard an analyst say “We don’t pay any attention to PEs anymore.” That was right before the so-called “dot-com” crash.

On a more positive note – well, maybe not so positive – that crude market is going to crater. Along as there’s not a war, that is. I mean another war. It will go down to the inflated currency equivalent of wherever it would be without about a 30% “fear factor,” say, about fifty or so.

This internet’s a cool thing. Courtney wrote another Hawaii blog the other day, and about Tar Heel basketball. I’m doing this Pen-Pen thing, and a couple more. Almost anything I want to look up (like the currency markets) I can, quickly and easily. I was thinking about the first time I became aware that computers could make things different – really different. It was 1978, I think. That’s a whole other story. Perhaps tomorrow.