STAGFLATION???

FUNDAMENTAL ANALYSIS
With so many analysts out there, including ex-fed chairman Greenspan himself, expecting a recession and other analysts, including myself, expecting rising inflation, Greenspan consolidated all views and suggested that the US economy is really going into a STAGFLATION!

So, what in the world is STAGFLATION?

STAGFLATION is one of the most complex and dangerous economic condition any economy can get into and is characterized by a gradual economic downturn along with rising inflation. In layman terms, STAGFLATION means RECESSION + INFLATION! Wow, how's that for pleasing both camps and stunning investors? In a STAGFLATION economy, neither rate cuts nor rate hikes actually work because rate cuts increase inflation while rate hikes increase the possibility of recession! So, how's that for a sticky situation? I see actual numbers pointing to inflation for months but I have yet to see any actual numbers pointing to an economic downturn. So far, economic growth, productivity and employment has been improving all year long! I am shocked someone as experienced as Greenspan can come out talking about recession one day and then stagflation the very next day. These 2 conditions are VERY different! (lets not even talk about his crazy idea of a full cash bailout of the subprime mess which is going to rocket inflation to the moon!)

TECHNICAL ANALYSIS
The pullback continues today as expected... let's continue to wait for when the turn around happens.