Friday, June 22, 2007

Feel the Gush

EUR/USD 1.3458 Hi 1.3470 Low 1.3380
USD/JPY 123.95 Hi 124.17 Low 123.67
AUD/USD 0.8484 Hi 0.8496 Low 0.8460
EUR/JPY 166.78 Hi 166.82 Low 165.63

You would never know from the headlines that Nicholas Sarkozy actually LOST seats at the recent legislative elections in France. No. Everywhere there is talk of triumph. The media is having a GUSH FEST about his mandate for reform. Indeed, the man did win the Presidency but he wasn't exactly running against genius. Far from it. And when it came to the more recent Legislative Elections the UMP actually lost seats. Alain Juppé got tossed out altogether. That was the guy appointed SUPER-MINISTER for everything. Now he gets the super ministry for nothing. Not that he is likely to be out of job. Friends in high places mean quite a lot in France.

But hey no-one in the mainstream media is worrying about Sarkozy's spectacular failure to win a legislative landslide and his inability to EVEN HOLD on to ALL the seats the UMP already HAD. It's full steam ahead and let's go for reform because the man has the votes. Votes. Right. The way democracy works NOW is: as long as you have enough votes at the relevant elections you can do whatever you want subsequently. You may even talk "Political Capital" just to rub it in.

Looking on the bright side at least no-one is talking about outright electoral fraud.

So we have a worldwide trend. No-one is getting governments these days that even vaguely resemble what "the people" want. In France "the people" want less immigration and more security. Particularly job security. What they will get is the exact opposite. Not that the PUNDITS are fussed. The narrative in the press is that Sarkozy won a mandate for widespread reform. End of story.

And now somewhere in Europe there is all sorts of tweaking going on with the European Constitution Mark II. This tweaking, which is largely cosmetic, will allow our Dear Leaders to plausibly deny that they introduced something which "the people" have actually already voted against. Oh my. It's so kind of them to bother. After all they could just barrel ahead and introduce the darn thing without making even cosmetic changes. But hey they do understand their role as our representatives. Maintaining appearances is so crucial.

Meantime back at the ranch the people working behind the scenes to ensure that ARMAGEDDON happens right on time haven't given up. Accusations are flying. The Americans are accusing the Iranians of kidnapping people. No mention, of course, of the Iranian DIPLOMATS which the U.S.A. kidnapped in Iraq earlier this year. Or of the covert U.S. operations inside Iran aimed at destabilising the Government. And, of course, no-one is really talking about that great U.S. fiasco: the illegal Iraqi Invasion.

And right at this pleasant juncture Tony Blair has decided to bestow a knighthood on Salman Rushdie, who is, you might recall, not the most popular person in Iran. Nothing like pouring a little fuel on the fire Tony. Such timing. Such panache.

Tony reportedly plans to convert to Catholicism soon. Can it be the rite of CONFESSION that he's interested in? They no longer do indulgences. But place your hand on your heart and say you're truly sorry. A couple of Hail Marys and, voilĂ , all is forgiven, your soul is wiped clean and you get to move on. Accountability is so last century.

Back on financial markets the game plan looks a little strained. Interest rates are rising everywhere. Sweden went. New Zealand went. The U.K. looks set to hike in the short term. Japan is reportedly planning to hike soon. And BOND MARKETS are getting slammed.

This is not the greatest scenario possible for debtor nations. And debtor currencies. And the U.S. is the NUMBER ONE debtor nation.

U.S. Treasuries yields look set to test their recent highs. And U.S. Stock Markets are less nonchalant about that than they used to be.

USD/JPY is doing fine. That's about it. And that particular trend is supposed to be something to do with Japanese Housewives opening deposit accounts in foreign currencies. These housewives are supposedly offsetting those huge on-going Japanese TRADE and CURRENT ACCOUNT SURPLUSES with that little piece of sophisticated financial engineering. Does that sound plausible to you? Me neither.

Everything else looks sick. The USD is performing badly against pretty much any currency you would care to name. No-one wants to buy more U.S. Treasuries and the Stock Market has got as much zing as it's going to get out of Mr. Murdoch's timely little take-over bid. Stay tuned this could get worse.

OIL 69.28
GOLD 656.70

In the midst of the mess that is the Middle East OIL climbs. GOLD is being held in check by shady forces and COMMODITIES are struggling as global economic growth slows. Led, of course, by the economic train wreck taking place in the U.S.A. and helped along by the rising cost of finance, well, everywhere.

Liquidity glut? I mean please.

Labels: , , ,

Comments: Post a Comment

Create a Link

<< Home

This page is powered by Blogger. Isn't yours?