The Indian jeweler’s strike, in response to the Indian government’s tax increases has crippled near term demand. However, Commitment of Traders analysis shows that it has been primarily the small speculators who have been washed out on the 8% decline in the gold futures market while commercial traders have been using this decline to add to their positions.
The domestic economy remains the focus of this year’s election. The primary components of this discussion include gas prices, unemployment and the Federal deficit. This week’s article concludes this series with a summary of the previously discussed topics and possible solutions.
The U.S. budget deficit needs to be the center of the focus for this year’s election. The continued issuance of new debt to pay down the interest on debt already incurred does nothing to solve the problem. A Value Added Tax (VAT) is one way to accomplish equitable taxation while cutting spending on social programs.
The effect of unemployment on the Presidential election is not as straightforward as it would seem. Furthermore, there are structural issues regarding the way the unemployment numbers are calculated, the effect baby boomers remaining in the workforce and the growing regulatory expenses small businesses are forced to swallow that must be addressed for the domestic employment situation to gain traction in the coming years.
Energy policy will be one of the main battle lines in this year’s election. The threat of $5 gas will force the President into action. The American public votes with their pocketbook. How will his administration adapt its policies to placate voters without turning his back on the environment and the middle class?
The U.S. equity markets have enjoyed a nice start to the year, led by the Nasdaq. However, there are several factors that suggest this rally may be nearing an end.
Cocoa futures are attempting one last rally due to uncoordinated policy implementation and weather concerns. Once these pass, foreign direct investment, modern agronomy, and a stabilized political system should enhance cocoa production and stabilize prices at lower levels in the coming years.
The cattle market was unable to grow the breeding herd in 2011 due to weather issues in the southwest. This has created the tightest supply situation since 1953. Where will April live cattle futures or June live cattle futures end up?
Goldman recently came out with a trade recommendation to sell U.S. Treasuries. Personally, I think there are several reasons to avoid this trade if not, directly take the other side of it. The simplest reason is, “Don’t fight the Fed.”
The low cost of fracking has brought an economic boom to fossil fuel production. Here in Ohio more than 200,000 jobs are expected to be added in the next three years. New technologies like SteriFrac are being developed to make it more environmentally friendly. However, the environmental impact must also be measured overseas. Iran, Qatar and Russia control 70% of overseas reserves and their primary focus is likely to be profitability.
