Gartman on CNBC:

I don’t understand Gartman’s latest calls
By Greg Hunter

I was watching CNBC around 2:30P this past Friday and up popped a segment with Erin Burnett interviewing Dennis Gartman. Gartman is an economist and founder of the Gartman letter. He’s a smart guy and has been in the financial game since the 70’s. Maybe this is why I was so perplexed about his latest calls. He basically said commodities are finished and their bull run is over. This included gold which he said had come down from over a thousand dollars an ounce to the low 900’s where it is now. He also said wheat, corn and soybeans are all well off their highs and that these price declines signaled a “top”. He also said he was “long Harley-Davidson and short Toyota.”…“long financials and short the market”. Gartman admitted his call for the financials, when he got in, was like “catching a falling knife,” but his short position in the markets still made the trade a good one. Ok, I get that but shorting Toyota?! Yes, the company just announced sales off 18 percent but the company is a leader in hybrid technology. Toyota will be on at least its second generation hybrid by the time GM comes out with the Chevy Volt in 2010. Gartman told Burnett his call about Harley-Davidson was a play on expensive gasoline. I looked up what the entry level Harley costs, and a base model Sportser goes for around $7K. According to the Harley dealer I called in Queens, NY, you can expect to get around 40 miles per gallon. An entry level Toyota is a Yaris. A 5 passenger base model goes for about $12K and you do not have to wear a helmet. The Yaris is rated at 29 city and 36 highway. Can you see husbands across America telling the wife, “honey I know how we are going to fight those high gas prices. I am going to buy the family a Harley.” I don’t know about you guys, but in my house the answer from my wife would be, “not no, but hell no.” Don’t get me wrong, Harley-Davidson is a great company with a great product, but so is Toyota.

As far as the commodity boom being over… that is the call that is most puzzling to me. Last I checked, the President just signed a bill that not only bails out GSE’s Fannie and Freddie but gives Hank Paulson an open check book to do it. Add that to the billions handed out every day to the banks and brokerages at the so called “lending” facilities at the Federal Reserve and that spells lots and lots of money creation. John Williams of Shadowstats.com contends money supply growth is at a rate of at least 16 percent a year. (Keep in mind that stat does not include the Fannie and Freddie bailouts.) That means in less than 5 years we will have twice as many dollars floating around as we do now. Nobel prize willing economist Milton Friedman said,” always and everywhere inflation is a monetary phenomenon.” In other words, if you print a lot of money then you will have a lot of inflation. With all the money printing going on, I do not see how gold or any other commodity has put in a “top.”