This past weekend, we took a horseback ride to a place we have not been before. Actually, it is interesting that we have not been there before. The property belongs to our neighbors and it borders the backside of where we live. The property is vacant, but we do know the folks who own it, and in a recent conversation, they offered it as a place for us to ride. The property is wild, as no one has lived there for quite some time, so, naturally, we accepted with excitement. Anyway, we cut the chain on the rusty old gate, put on a new chain and a new lock with a combo we all could share and went in. Following a worn deer path, we rode up a small draw that was open and quite beautiful. After about ten minutes, the trail narrowed considerably and then tailed off into a deep cut that turned uphill sharply. Seeing no way up there, we rode the sloped sides of the draw looking for a way up. After about ten minutes of seeing no way through the dense brush up to the ridge on top, we realized we were “boxed in,” we had nowhere to go, nothing to do but circle around in this draw over and over again …
Oil prices climbed above $102 a barrel Tuesday as talk of more financial aid for Greece helped weaken the U.S. dollar and traders worried about turmoil in Libya and the Middle East.
Sometimes, I feel boxed in as I study the economy and the market. Sometimes, I feel like we are all riding in a place we have never been, especially when it comes to the U.S. dollar, oil, and the events around the world. All we can do is circle around in a tight little draw that offers no way out except to return to where we started. Up and down, we search for a way higher, a way out of the draw to ride some higher ground…
However, sluggish economic indicators are a mixed signal for oil traders. A weaker economy would suggest less demand for crude, but it also tends to reduce confidence in the dollar, and a falling U.S. currency usually boosts oil prices.
Each small path we find to the upper ridge always ends in the impassable density of the surrounding forest. A weakening global economy is bad for U.S. economic growth, yet it is good for the price of oil, which rebounds on the weakness of the U.S dollar, and that sends equities higher. The European debt crisis is bad for the global economy, but the continually proposed solutions strengthen the euro, which weakens the U.S. dollar, which strengthens our exports, which should put upward pressure on manufacturing and job creation.
“Crude oil prices have surged on reports that Germany has given up on its principles and would allow a second bailout of Greece,” said Olivier Jakob of Petromatrix in Switzerland.
Last week, I said Germany would not allow Greece to fail, despite its own misgivings … Yes, some days I feel as if we are all just cruising the sloped walls of the tight draw looking for a way to higher ground. After a while, frustration sets in as each new path to higher ground ends in the same, dense undergrowth. It is frustrating because we can see the ridge above, and we know that if we can just get through the dense brush we will have a long and beautiful ride.
Trade in the day – Invest in your life …
