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August 31, 2005

Tapped out, Wed., August 31, 2005, 1:10 PM

Given that 1 litre of gas in Canada equals 0.26425 U.S. gallons

And 1 Cdn Dollar equals 0.8435 USD

As of today, it cost Toronto drivers the equivalent of US$3.83 per U.S. gallon for the cheapest grade.

That was when I was at the pump at 7am ET. I expect the price has gone up since then.

And I know that the price paid in most other Canadian cities is a lot higher -- or soon will be.

Pretty soon, we'll be paying European prices.

And have to downsize our autos to what Europeans believe to be a reasonable size.

And our piggybanks will be looking like those in Europe.

And we won't be able to buy up all those great deals at Wal-Mart their CEO was telling the CNBC audience about yesterday.

And that leads to deflation, not inflation.

So, ask me where this crazy economy is headed, and I'll have to say, Who really knows?"

Other than the White House, and the VIPs in Washington.

But ask me where this equity market is headed, and I'd have to say, again, 9,800 on the Dow first, followed by 9,200.

Then I expect there will be a change in Fed policy, a new round of printing money, a continuation of the inflation cycle, and " if it's a controlled one " a new secular bull market.

Ask me the probabilities, and I'd have to say, 50:50". :-)

I'm like a lot of you; tapped out. Of ideas, anyway.

btw, I think the Dow is being held up by the Katrina-beneficiaries. For now.

Ask yourself if there are more Katrina-losers than Katrina-beneficiaries, and that will answer the questions about where this U.S. equity market is headed. ;-(

Posted by Posted by Bill Cara on August 31, 2005 01:10:45 PM | Category: Cara Today in the Market

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