This is a special 'special advisory'. The key to successful long term trading success lies with proper assessment of the current and the transitioning environment. The recent Japanese earthquake sent shock waves around the world, all puns intended. This natural disaster will create a 'new' world not just a 'new' Japan. The balances of world power have been changing for decades but the transitioning has been the terminating for some 'once' proud and powerful nations. Japan has now been added to that list of Russia and Europe. America has endeavored to isolate itself from the rest of the world particularly the nations of the U. S. and Canada. They are marching to another beat of the drummer than the 'free' democratic nations of the rest of the world. A particular obvious separation is trying to reduce our energy dependency on other countries. This will be a transition that will be a work in progress for years, denoting the mood shift of America.
My worries can be made into opportunities if we take small segments of time and correctly evaluate them. The Japanese calamity will be an ache to the U.S. that becomes a chronic pain as time progresses. Japan owns a high percentage of U.S. Treasuries. Their national monetary needs will become pressing as the devastation turns from an obvious eyesore to an abstract ominous darkness. That darkness will be the necessity for funds to reconstruct their economy. The easiest source? Right! U.S. Treasuries! This will bring a new revelation to our already fledging economy. Chronic pain is introduced. A worsening situation does not need to be accelerated, it needs time to be understood and corrected. Time may not be a U.S. luxury. The new 'pain' is the bull whipping that oil prices are now administering to an already chronic pain. The gasoline shock is probably the sharpest sting to our economy that literally allows no one to be spared. The stimulus monies Benny has pumped like a fire hose on a fire has missed some of the flames. In fact, I wonder if it is water or diesel fuel being spewed on the fire. An irony indeed and another pun intended!
The only reason the U.S. stock market has rallied is because its source is QE2 which is another Benny bombastic bungling. He has the wrong liquid in his fire hose to provide liquidity and extinguish the depression. Will he turn off the spigot? The spigot will be turned off for him and there goes our stock market.
I want my readers to realize that Japan's earthquake and resulting Tsunami, are minuscule to the tsunami that Benny's artificial liquidity has done. Our quake will produce a volcanic eruption of inflation never ever seen before in the U.S. Do you remember the late 1970's inflation, that was a surfer's wave, Bennie's bombastic bungling will be the Tsunami of inflation never before seen. Will you drown? Find an Ark!