Tuesday, April 3, 2012

A Letter

                       The President says that we are producing more oil than ever before and domestic demand is down. So, considering use of the Strategic Oil Reserves and the heralding of new out year higher fuel efficiency standards are not relevant topics. The commodity markets see higher out year global demand and Middle East supply concerns and, nudge the price a little higher anticipating problems in the near future. This is a right and proper reaction by the markets. Are they making a bet? Yes, but that is what the market is all about. If you want to put your money on the table you can play too.

                       And finally, the money supply. According to Federal Reserve data, the M1 account, the money we play with, was at $1,864.7 Billion in January 2009. By January 2012, the supply had grown to $2,679.8 Billion. The Federal Reserve by the purchase of Treasury debt had increased the M1 account by printing another $833.1 Billion.

                       We unwashed and uneducated in the fine points of politics see this as 44% decrease in the value of the dollars in our pockets. We, the American people, know this as inflation. The reported change in the Consumer Price Index of a few percent is a farce. Perchance the Ruling Oligarchy loves inflation. The value of the debt in dollars is less. The competiveness of the Oligarchy's multi-national companies love it as the price of their products overseas is more competitive. But, what about the non-multinational company? What about the American people?

                       The Oligarchy does not govern, it rules.   

Bob Dewey


Ps. Don't even begin to think about the price of gold over the same period.

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