Recovery.... comes as a cost......

While the mainstream media, analyst communities and govt authorities are cheering that we are out of the woods and we have averted a major depression, we want us to pay attention to the chart below....

This is a plot of S&P 500 v/s the USD Dollar with the dotted lines, classifying the time period since March 09. Ain't the two plots look a mirror image of each other....



The Equity markets got a big jolt up since the Federal Reserve declared its mega QE (Quantitative Easing) program after its March Meeting. As the Equity market have gained swiftly since, the recovery effort has primarily been at the cost of trashing the dollar. As the dollar has weakened, the wealth of anyone and everyone holding Dollar Assets has gone down. The burden of the weakening dollar is shared by the population at large, in terms of high commodity prices - such as Sugar, which is at an all time high, steadily climbing Copper prices (which has moved more than doubled to $2.8), Gold prices (currently around a High for 2009) and Oil prices (having moved from $32 per barrel to a nr term High of $75 per barrel)....with the fear of higher taxes, lesser public facilities and a confused healthcare environment running at the back of the mind.....

It goes to show time an again.... that there is really no free lunch.....