I was thinking a bit about my previous blog entry on how I said I was ultra bullish. I have actually been thinking on this topic for about a week. And now I realized that this could be the perfect storm against the shorts and those waiting on the sidelines. Though I think it is worse for the shorts. Here is why.
* Oil is going up and so are the commodities and according to Fast Money it is because the US is printing money making the US valueless.
If this is the case then like a couple of years ago people will have to ratio their gas (already started by people buying smaller cars) and exports from America will soar.
This means American companies will earn more and people will be able to keep their jobs urging them to spend again.
Foreign companies will have more dollars and be able to buy, consuming pushing the world out of recession.
* Oil does not go up, and the dollar strengthens.
Then there is no inflation the economy trudges along slowly, but people’s earning power will increase due their ability to buy more for their money. However, since the US is printing money like crazy their money is worth quite a bit more. Thus the US will be richer than ever.
* Oil does not go up, and the dollar weakens
There is no inflation since most commodities are priced in dollars, and the countries trudge along slower and with time the global economy recovers. But because the dollar is becoming weaker the commodity suppliers will restrict output forcing prices to go higher.
My point here is that we are in a statistical outlier moment and regardless of how you spin it in the short term the US wins. Sure there might be ramifications in a couple of years from now, but can the shorts hold on that long? I doubt it! In other words the shorts or those waiting for a pullback are royally screwed. Kind of interesting situation actually…