Almost all commodities are headed higher unless caught in trade war disputes. I don't believe its because of income inflation, but rather the effects of steadily rising global demands coupled with a global zombie economy which did not reward capital investment but rather bubble blowing real estate and asset games. China's rising demand alone will put increased burdens on global commodities.

It is nice to see the dollar firm up. It will be even nicer if demand for longer term Treasuries increases, the trade war rhetoric is put to bed without any more actions, and there is a clear sign that no more deficit inducing budget garbage is in the making. Hopefully, people are realizing a weak dollar has a lot worse downsides than a rising dollar.

I don't think China or Asia's cell phone sales is a canary in the coal mine or a canary of any sort at all. If you have been to Asia you will notice people keep cell phones like teens have Facebook accounts. Each has like 3 or 4 cell phones and a few in the home that aren't used. As feature rich phones increase it gets too tedious to deal with multiple phones and accounts and thus, I suspect, that is the main reason for the drop in demand. Maybe using the free cell phone gimmick to get you on a telcom service is finally failing in Asia like it did in the US a while ago.

People should not sell off their investments to build up cash, however, every downturn should remind everyone to save cash. The cash you save today, you can look to increase your investment when the time is right. In the meantime, it also helps you not have to tap into your savings when it is not an opportune time to sell.

Sadly, another factor that makes those who engage in protectionism uncompetitive internationally is that most things require the cheaper more competitive inputs from other countries. Thus, in the case of the US, one adverse affect is that Europe is now tying with China who will then supply them with low cost commodities and in a few years we will have competing products from them at lower prices. Tariffs are a terrible distortion of global economics and tend to result in you shooting your own economy in the foot.

I think QT is not and has not been substantial and the Federal Reserve realizes they can't clean up the mess without making a worse mess than they had before instituting QE. Indeed real QT would be horrific on the market given how it has seeped into so much of our economy.

In inflation, I on't see inflation being caused by income gains making that much of a problem. The problem is trade wars tend to cause commodity inflation as assets get harder to move around and if the commodity is tariffed it makes it even more dramatic. Likewise, a rising deficit and a falling dollar will lead to inflation. I agree that the market really under estimates this cause of inflation which is what is leading inflation upwards more than anything.

I still find it funny for people to be so into Microsoft's Office Suite as something new and novel now that they are practically forcing people and companies into monthly subscriptions. The funny thing is that their main competition seems to be Windows 7 still. On that note, expect their monthly monetization of Office to continue for a while. Then we will see if they can really create and grow their cloud applications with a new product instead of just changing their product into a monthly fee and forcing people to buy it or go without Word, Excel, and Powerpoint.

The one thing I can say is that their 365 mail is not bad, although putting ads that lag some computers on personal email accounts is annoying.

The Ghawar reserve probably has less reserves than thought using older technology than the Saudi's think but may hold as much as projected using new technology. I hope the Saudi's are considering starting the process of spending more on development as they IPO their state oil company.

I doubt if anyone takes the CBO's projections as correct. They are usually politically motivated. That said, their projections are more moderate than I expected. Whereas, you are correct the spike tends to be sharper at the beginning, it will be muted by the Federal Reserve's tightening. The second issue is much worse, inflation.

The rise in growth may actually occur since inflation is rising and may peak a couple years from now. Sadly, it is not due to labor conditions but rising commodities prices due to international competition for things like oil and trade war and sanctions actions primarily by the US. One thing we can control, the other we can't.

Let's hope energy stocks end the week on a positive note. It is hard to say though because the market punished stocks that were relatively positive this quarter like Google. I think after the market digests such stocks will rise back up to pre-earnings levels.