The Lindsay Lohan Indicator

Jul 10, 2011
J. Webster
Comments Off on The Lindsay Lohan Indicator

Some unconventional indicators might tell the real economic story. Perhaps this marks the top related to the concern and worry about the value of the U.S. dollar, what with one brilliant economic sage posting a tweet about gas and food prices. This sage of course is the wise old market maven Lindsey Lohan. Trends tend to top out when they reach such a saturation point that the Lindsay’s of the cultural world start to make statements of concern about the economey. Randall W. Forsyth from Barrons has the story:

So, as Lohan tweets last week: “Have you guys seen food and gas prices lately? U.S. $ will soon be worthless if the Fed keeps printing money!” Not being among Lindsay’s two million followers on Twitter, I found this out from Ed Yardeni, the president and chief investment strategist of Yardeni Research, who includes this in daily briefing with the analysis of the Chinese purchasing managers index.

Turns out Lohan’s tweet was sponsored by some company trying to attract traffic to its site, Yardeni points out. Still, she insisted “I actually do care about gas and food prices” in a subsequent tweet, as if to show she has an ear to the vox populi.

While Lohan’s plaints certainly ring true on Long Island whence she hails, one wonders if they mark the top tick, as it were, of the concern about monetary and fiscal profligacy.

After all, they came as the Federal Reserve was winding down QE2 — the purchase of $600 billion of Treasury securities. So, the Fed has stopped “printing money,” to use Lohan’s locution. As for her observation on the currency market, the U.S. Dollar Index has stabilized around the 75 level since the QE2 approached its final destination last month.

The real threat to the dollar has been the U.S. fiscal situation, which may actually be moving in the right direction. President Obama and Congressional leaders appear to be working to grand budget deal, which would slash the deficit by $4 trillion over the next 10 years through a major cut in entitlements and tax changes, the Wall Street Journal reports Friday.

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