Bananaramas

If you have been floating around the markets this year, it does not look good at all.

Specifically if your looking at currencies and the weaknesses of such worldwide, we see an unnerving trend. That Prices all over the world have been steadily rising. The costs of doing business is on the up and if one still has not noticed, this has been going on for several years.

Is there really so much demand out there that stocks are at an all time high?

The last time I checked the Baltic Dry Index, (2 weeks ago) prices on there for dry bulk shipping had a flat line appearance for the year on year trend. This means whilst the rates on the BDI went up during 2012 for  seasonal demands, the price index had fallen to a new (low) precedent. That means that there is now no new demand to justify an increase in BDI rates as per the previous year ie 2011.

So why are prices going up?

Is it speculators?

Speculators operate on the premise that there is money to be made whilst speculating, and if the speculators are all flocked at the source, it means that whoever who is in charge of supply has a virtual monopoly over supply, for whatever it is of course.

However we see that the price rise is not for specific items or indices, it is in fact a general and across the board price rise. Everything from Oil to Gas, Feed to Fertilizer has been going up, and up and up and there is no adjustment at all to the prices. The economy appears to be in a bubble. 

If it is in a bubble, there is only one thing for sure and it is going to pop.

If it does, expect the currency market to become like the Banana Money as shown above, all bravado and backed by absolutely nothing, and hence, utterly worthless.

Have a nice day :)