Chris Puplava's picture

The markets initially rallied off the retail sales report that came out last Wednesday as sales for January rose 0.3%, which was in stark contrast to the consensus expectations of a 0.3% decline.

Rob Kirby's picture

Folks should understand that all fiat money is loaned into existence. Thus, when fiat money is ‘created,’ explicitly, the principal sum [loan] is created out of thin-air, but the interest to be repaid is not.

Tim W Wood CPA's picture

Just as the equity markets were pushing into their anticipated turn point in late January, the Fed makes a 75 basis point cut of the Discount rate. This was the most aggressive rate cut since August of 1982. The very next week at the regularly scheduled Fed meeting they cut yet another 50 basis points.

Chris Puplava's picture

The ISM Non-Manufacturing Index plummeted in January to 41.9, a sharp drop from December’s 54.4 reading. Numbers below 50 indicate a contracting economy and January’s reading was the lowest reading since October 2001.

Chris Puplava's picture

Economic growth decelerated sharply from the 4.91% annualized growth rate seen in the Q3 2007 to 0.64% in Q4, nearly coming in at only half of the 1.2% consensus growth rate reported by Thomson Financial.

Rob Kirby's picture

Last week global capital markets gyrated in a fashion I’ve never seen before. Intra-day business-cycle-in-a-day movements in equity markets included disparaging collapses as well as stunning “flagpole” rallies.

Tim W Wood CPA's picture

As I have watched many of the mainstream financial shows over the last week or so it is obvious that confusion reigns at even the highest levels in regard to the state of the financial markets. Yet, the answer is very clear and I have been warning about this for some time.

Chris Puplava's picture

Last week’s WrapUp put forth the case for stagflation and used the U.S. Misery Index (unemployment rate + inflation rate, %) as a measure of stagflation.

Chris Puplava's picture

The Japanese yen has started rising against all of the world's major currencies as the yen carry trade may be unwinding. Traders have for years borrowed cheap yen at interest rates near 0% to reinvest those funds throughout the world.

Rob Kirby's picture

Tomorrow, January 15, 2008, the Bureau of Labor Statistics [BLS] is due to release their report for December Producer Price Inflation [PPI]. Last month at this time the BLS reported a steep rise in prices for November led by stiff increases in prices of crude oil.

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