Inflation Attack Rest of Year - This week’s inflation data will not matter that much to the Fed.

European natural Gas prices jumped 30% yesterday, but moves of as much as 100% to 300% higher are entirely possible.

Even then, prices would not be back anywhere near the initial crisis levels, and this would merely be a reasonable price rebound let alone another crisis.

The US economy is going to be incredibly squeezed further by both higher energy costs and interest rates. This is an economy already stalling out with a long recession already in place in manufacturing and other sectors. It is highly unlikely that in its weakened state the economy will hold under these increasing pressures over coming months.

We may be witnessing the serious un-ravelling of the US economy under such pressures.

Stock valuations are currently above long term averages, while the economic reality is far below such performance averages. It is not rocket science to recognise that there is growing risk of a significant fracture lower in equity markets.

There is no turnaround in sight for any of the three major economic regions of the world. One of these two characters, stocks or the economy, have to break back toward the other?

It looks far more likely that we will see a serious stock market capitulation in respects of an intensifying global slow-down under on-going pressures from energy prices and interest rate levels.

In this, there is much opportunity. I continue to suggest defensive strategies.

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