Stop The Presses!

05/19/01 The Daily Reckoning

Weekend Edition

May 19-20, 2001

Waterloo, New Hampshire

By Addison Wiggin

MARKET REVIEW: Stop The Presses!

The market Friday paid little attention to a Commerce Dept. indicating consumers had driven the trade deficit up a record $31.2 billion, preferring to rest easy following its Fed-inspired Wednesday run up of 343 points.

The Dow closed slightly higher – up 53 to 11,301. The `blue’ chip index enjoyed a whopping 480-point gain for the week – closing at its highest point since September 6th. The S&P 500 gained 3 to close at 1291 – up 46 for the week. The Nasdaq shimmied up 5 on Friday 2198, a total gain of 91 for the week.

Running the printing presses full tilt appears to be just the method Mr. Greenspan prefers for engineering the fabled `soft landing’ for the US economy. On Wednesday, according Bill King, Easy Al and company goosed the money supply by $11 Billion – M3 growth has escalated to nearly 14% for the past 13 weeks… M2 is up +12%. Annualized that’s in excess of 20%.

“While Alan Greenspan thinks he’s averting a recession,” said Jim Bianco, of Bianco Research, “He may be causing a depression.” Inflation is already rearing its ugly head – CPI rose 3% in April. Gold reacted strongly, rocketing up $13 dollars in the final 3 hours of trading Friday.

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Markets Around The Globe: Japan slipped 0.2%. Germany, Britain, and France all rose slightly.

The Russell 2000 rose to 506, ending the week up 18.

ADD’L PRICES FOR THE WEEK: Runaway Bull In Gold?

Gold: $287 – up $13 in the last 3 hours of trading Friday

Crude Oil: $30.34

Natural Gas: $4.29

CRB Index: 218

Dollar Index: 116

The Sad, Sad Euro: $.87

British Pound: $1.43

Japanese Yen: $.81

Addison Wiggin

Addison Wiggin is the editorial director of The Daily Reckoning, and executive publisher of Agora Financial, an independent financial research firm based in Baltimore, Maryland. His second editions of international best-sellers Financial Reckoning Day Fallout and The New Empire of Debt, which he co-authored with Bill Bonner, were updated in 2009. His third book, The Demise of the Dollar… and Why it’s Even Better for Your Investments was updated in 2008, the same year he wrote I.O.U.S.A. Read more about Wiggin’s best-selling books here.   

Wiggin is the executive producer and co-writer of I.O.U.S.A. an acclaimed documentary nominated for the Grand Jury prize at the 2008 Sundance Film Festival and the 2009 Critics Choice Award and shortlisted for a 2009 Academy Award. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs.

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