The Iraqi brothers grimm are no more. I hope you took note of their date of finding, July 22. War started (birth date) the day prior to the March equinox. The US papers labeled the event a 'turning point' in the Iraqi struggle. As one would expect at 120 degrees.

I was asked a question about the spi, where to from here, so here are some thoughts. Looks to me now that the July top I gave some thoughts to earlier, has been more of a sideways pattern of accumulation. But the maths are more important. The US markets are pushing the limits of the ranges up now, so a weekly mid point retracement is due over the next three months. The SPI however is slowly grinding out the repeat run of the first range out, April 30 top, minus the Mar 13 low, added to May 20 low. Possible numbers and time frames to watch anyway.

The US released consumer confidence numbers this week that were poor, not that I follow such stuff, but the reaction was interesting; the market hardly moved, which indicates to me the market is looking further out than just these numbers and is expecting good news for the rest of the year.

Note;
Some of the metals, zinc, copper, silver, have broken out of some years of an accumulation base this week. May be indicating a belief that industrial production is set to improve substantially. I would move the hands of our economic clock now to between 8 and 9 am. This is echoed in our stock market at the moment where there is stacks of good value small cap stocks also moving off bases (tne, arl, aun, ajl, ane, cnd, maq, fea, ytl to name a few).

More important however is the efforts by all the Presidents men to ensure he is re elected;

- Massive deficit financing, ie the US government issuing bonds and notes on a scale never before seen, it is just huge. Fractional reserve banking at its finest, i.e. the issue of credit as a debt, backed by the government's power to tax, for future generations to payoff. The banks just love it.

- Large tax cuts favoring the wealthy end of town (I am told it will 'trickle down')

- US central bankers, well one of them anyway, a certain Ben Bernanke, saying last week "we should be willing to cut the funds rate to zero, should that prove necessary to provide the required support to the economy" (I would insert 2004 presidential election in between the lines there...)

NEVER BEFORE IN THE HISTORY OF THE UNIVERSE HAVE ASSET PRICES DEFLATED WHILST THIS IS HAPPENING. Got that.

The collapse of asset prices has always, in the past, without exception, been preceded by interest rate rises, and / or government budget tightening. Interest rates, we watch the yield curve. Budget tightening, watch the government accounts naturally. And the bigger they are...the harder they fall.

To some other matters:
There is possibly only one sport the French practice more often than cycling, and that is ballooning. This month sees the world ballooning championships, would you believe it, right here in down town Mars La Tour. They go up morning and evening, not hundreds, but thousands, using a dis-used US world war II air force base just down the road. Quite a sight in the evenings. (Too early in the morning for me to catch...)

And for something even more bananas, my chasing of books via the net unearthed this recent publication of 17/6/03, (I know nothing of the book, nor what it purports to say), titled 'American massacre, the tragedy of Mountain Meadows, September 11th, 1857. Ahhh the date you say. Look a bit deeper, 2001 minus 1857 is how many years?? yep, that's what I said too... mmmm

1857 being a very difficult year, largest US depression to that time. Following is a quote, one of many about past cyclical lows I have unearthed so far:
"It is a gloomy moment in history. Not for many years - not in the lifetime of most men who read this paper- has their been so much grave and deep apprehension; never has the future seemed so incalculable as at this time. In our own country there is universal commercial prostration and panic, and thousands of our poorest fellow citizens are turned out against the approaching winter without employment, and without the prospect of it. In France the political cauldron seethes and bubbles with uncertainty; Russia hangs, as usual, like a cloud, dark and silent upon the horizon of Europe; while all the energies, resources and influences of the British empire are sorely tried, and are yet to be tried more sorely."

From Harpers weekly, vol I, page 642, Oct 10 1857