Saturday, June 28, 2008

The fall of Troy

Cassandra was the daughter of King Priam and Queen Hecuba of Troy. Apollo (the Greek god of the sun, truth and prophecy) fell in love with Cassandra. However, when she did not return his love, Apollo placed a curse on her so that no one would ever believe her predictions.

Cassandra foresees the destruction of Troy (she warns the Trojans about the Trojan Horse, the death of Agamemnon, and even her own demise). Despite this foresight, she is unable to do anything about these events.

In January of this year I predicted that there was a looming problem of rising oil prices. At that time, Nymex crude oil was at $100.00 a barrel.

This past week, it broke through the $140.00 mark.

I tried to point out that if the price of sweet crude oil continued higher, the cost of everyday consumer goods would rise alongside it. This would then, in turn, spark wide spread inflation in the United States.

In its infinite wisdom, Ben Shalom Bernanke and the Federal Reserve Board of Governors in Washington DC has cut interest rates time and again over the past couple years to "stimulate" the stock market and “help” the nationwide real estate crisis.

These shortsighted actions have caused serious weakness in the US dollar. When the Canadian Loonie, for the first time in its history became more valuable than the US dollar, I made a point to mention it on this blog.

As you can see from this chart (pictured below), the Dow Jones Industrial Average is now well below the 11,722 mark it held in January of 2000.


One might kindly say that we have simply made no economic progress in the eight years that George Bush has been in the White House.

However, if you adjust those market levels for even modest year-to-year inflation you really get a sense of what a complete cluster fuck this administration has been.

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