Producer Prices in U.S. Rise 0.7%; Core Rate Up 0.1% (Update1)
CIGA Eric

Static observations, like inflation remains subdued right now, is like forecasting weather by looking outside the window. While some forecasts will be right, many others will look bad without knowledge of present and past trends.

“Inflation remains subdued,” said Joseph Brusuelas, president of Brusuelas Analytics in Stamford, Connecticut. Limited price pressure “provides an extraordinary amount of comfort to Fed policy makers. They can stay on hold well into 2011.”

Today’s "subdued" action looks similar to the big commodity run from 1938 to 1951.

16-Raw Industrial Spot Price (1935-1947);
Great Britain Wholesale Price of All Commodities (1885-1935):
^[1]

Despite the constant disparagement, gold continues outperform as expected.

Spot Commodity Price Index (CRBSPOT) to Gold Ratio:
^[2]

Source: bloomberg.com ^[3]

More… ^[4]

US Long Bonds
CIGA Eric

The upper gap has been tested on shrinking volume. This implies weaker energy during its formation. This is bearish. Cumulative tape energy, however, is increasing. As a result, I would not be surprised so more than one attempt to break the gap.

Money flows in the bond market, released later today, will provide more information.

US Long Bonds (ETF):
^[5]

More… ^[6]

Greece asks for EU-IMF bailout
CIGA Eric

What many fail to realize or acknowledge is that the US, with its controlling interests of the IMF, will be sharing the burden of the Greece bailout. The bailout of one weak EU nation implies that others will soon follow. As long as the State, or combination of States (EU/IMF) can issue debt, no one will be allowed to fail. Cascading State failures were common in early 1930’s, but few are drawing these comparisons today.

Greek Prime Minister George Papandreou called for the activation of a joint eurozone-International Monetary Fund financial rescue to pull his country out of a major debt crisis.

Source: finance.yahoo.com ^[7]

More… ^[8]