An interesting and informative article about inflation pressure by Bill Fleckstein at MSN Money. Here’s the mony line.

“I believe inflation will be with us for quite some time. Only when money printing leads to a collapse in the dollar or in the U.S. Treasury market will there be any possibility of the asset-market declines we face actually turning into the deflation that so many people still seem to expect.”

The inflation/deflation flap is a complex subject with deflation being the far worst outcome - should it occur. For us technical analysis types we most often don’t think much about the macro relationships between fiat currency, comodities prices, and the seemingly irresitible urge to keep the run button pressed on the government printing press.

We need to see the greenback crack the 50% retracement in a convincing manner before we can even begin to look for the wall for the crude market.

Crude is at powerful Fibonacci resistance. A quick peek above this resistance level is OK but without doing any further analysis we wouldn’t anticipate a change in trend in either market without both meeting these minimal objectives.

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As the tax deadline draws near, it’s common to suffer from deadline anxiety. If you are one of the millions of taxpayers who have put doing your taxes on the backburner, the first rule is not to panic. Here are some last minute tax tips to consider:

* Crunch it with software.
Tax software (online or the kind you install on your home computer) does more than calculate the financial data you enter.

According to Stephanie Behrends, spokeswoman for 2nd Story Software, Inc., makers of popular TaxACT tax preparation software and Web-based services, “One of the most important benefits that tax software provides is that it is current on all of the tax law changes. Coupled with a thorough interview format, tips and alerts systems, and easy-to-understand explanations, software like TaxACT reduces the likelihood for errors to occur, and expedites the preparation process — while maximizing the credits and deductions specific to your tax situation.”

Don’t have all your financial information yet? No problem. Not only does tax software offer do-it-yourself tax preparers the ability to stop and come back to the return you’ve begun to prepare; software also allows you to work on any part of your return — making it possible to prepare your taxes in stages.

* It pays to e-file and use direct deposit.
E-filing eliminates most opportunities for mistakes and enables filers to receive their refunds faster. Better still, when coupled with direct deposit, you can receive your tax refund in as few as 10 days.

As of March 20, the Internal Revenue Service (IRS) has reported it has accepted more than 57 million e-file returns — up from 8.6 percent of the total for the same period last year.

* Avoid common mistakes.
Entering an incorrect tax amount you’ve transferred from documents can be costly — even software can’t predict the dollar amount reported in box four on your W-2. So double check your numbers after you’ve entered them. Other common errors include checking the wrong filing status and listing name changes that weren’t reported to the Social Security Administration. For example, if you were married last year, make sure the name you use to file your tax return appears as it is represented on your Social Security card.

* File an extension.
If you’re concerned you won’t get your taxes in by the deadline, you can file for a six-month extension using Form 4868. If you don’t, you’ll pay a 5 percent penalty each month on any unpaid balance you owe the IRS. And remember, this is an extension for time to file, not an extension of time to pay. This means you will need to estimate your taxes. If you determine that you have an amount owed to the IRS, you are obligated to remit payment to the IRS by April 15.

What should you do if your return is completed but you are unable to pay the full amount due with your return? Don’t request an extension. File your return on time and pay as much as you can. The IRS will send you a bill and a notice for the balance due and charge interest and penalties only on the unpaid balance.

* Already Filed? What documents to keep, what to toss.
It’s a good idea to keep documentation for a minimum of three years — this is how long the IRS has to audit past returns you have filed. However, IRS audits can go back six years if it believes income has been underreported by 25 percent or more. In extreme cases, the agency can go back even further if it believes fraud has been committed. So, keeping your tax documents, receipts and other related items for seven years may well provide you the best security blanket.

Need specific tax tips and advice? Visit www.irs.gov/newsroom and click “Tax Tips 2008.” Information concerning how to request an extension for the time to file and installment agreements is available at the IRS.gov — just click on the “1040 Central” link found on the home page. More information regarding TaxACT can be found by visiting www.TaxACT.com.

By Martin Hutchinson

The Bear Stearns bailout and the associated calls for further Federal intervention in the mortgage market have highlighted once again an eternal economic truth: in an era of excessively cheap money, only the money is cheap. Everything else - assets, business ethics, economic stability, support for free markets - becomes either horrendously expensive or wholly unobtainable.

It is not surprising that political support for free markets wanes in an era of excessively cheap money because the markets themselves stop working to the advantage of society as a whole and become rent-seeking exercises for the well-connected… >>

An excerpt from another Asia Times article that will tell you everything you wanted to know about the end of the world as we know it. Always a little over the top and always the worst case scenario but at least they ask the right questions.

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In response to the threat of the U.S economy falling into recession, President Bush signed a new economic stimulus package into law February 2008 which will provide more than 130 million Americans with a little extra money. The first checks are scheduled to go out in May. Yet, some taxpayers are confused about how they can get their money from Uncle Sam.

To get a clear understanding of the rules and how the phase-outs work, here’s a listing of how eligibility is structured:

Tax Rebate for Singles -
* If you earned at least $3,000 (and paid taxes), you’re eligible to receive $300;
* If you earned more than $3,000 (and paid taxes), you’ll receive $600;
* If you have children, you’ll receive an additional $300 per child under age 17 (your child’s Social Security number is a requirement);
* The phase-out reduction begins with those who have an Adjusted Gross Income (AGI) of $75,000 and ends at $87,000 – at a reduction of five percent per $1,000 over the lower limit. If you’re single and earned more than $87,000, you will not receive a rebate check.

Tax Rebate for Couples –
* If you and your spouse earned more than $3,000 but you didn’t pay taxes, you’ll receive $600;
* If you and your spouse earned more than $3,000 and you paid taxes, you’ll receive $1,200;
* If you have children, you’ll receive an additional $300 per child under age 17 (your child’s Social Security number is a requirement);
* The phase-out reduction begins with those couples who have an AGI of $150,000 and ends at $174,000 – at a reduction of five percent per $1,000 over the lower limit. If you are a couple who earned more than $174,000, you will not receive a rebate check.

Also important to note is that $300 payments will go to seniors, veterans and veterans’ widows who showed $3,000 in veteran’s disability or Social Security benefits.

Many Americans are asking, “If I hold off on filing my 2007 tax return until April, will I get my tax refund and rebate on one check?” and “Do I have to file a tax return to get a rebate check?”

“To ensure you receive a rebate check that may be due to you, taxpayers must file a 2007 tax return. For those Americans who don’t earn enough income to normally file, a simplified filing process using Form 1040A has been rolled out by the IRS,” says Stephanie Behrends, spokeswoman for 2nd Story Software — makers of popular TaxACT tax software.

“However, whether you file your tax return in January or April, taxpayers who are expecting a tax refund will not receive a consolidated check representing their refund and stimulus rebate. In fact, rebate direct deposits and paper checks will be issued by the IRS based on the sequence of your Social Security Number.”

If you are a one-time stimulus filer, you can opt to prepare Form 1040A-3 the old fashioned way (by hand) and mail it in to the IRS. Another option for stimulus filers is to file electronically by visiting the Free File Program hosted by IRS.gov. For 2008, taxpayers filing their 2007 tax return and one-time stimulus filers may qualify to use the IRS’ Free File Program providing your Adjusted Gross Income does not exceed $54,000. Taxpayers are, however, encouraged to weigh their options carefully as some Alliance Partners place restrictions on the type of income and deductions taxpayers can claim while using the Free File Program.

Some parts of the country will get hit a lot harder than others, and it will take them longer to recover.
By Jerome Idaszak, Associate Editor, The Kiplinger Letter

We’re forecasting a mild, short contraction ending well before the year is out. With housing and lending industries hurting, factory production and retail sales falling, employment shrinking and consumer incomes slowing, there’s no question that a recession is under way. But relief is already in sight.

Still, some parts of the country will be hit a lot harder than others. In states that led the housing boom, including Florida, Nevada and Arizona, as well as Southern California, thousands of jobs in construction and real estate services are disappearing as home values fall. Frost Belt states are in pain, too, especially Michigan and Ohio because of troubles in the beleaguered auto manufacturing industry.

But look for a turnaround soon, with expansion returning in the second half of this year. The fiscal stimulus from Washington and the accumulated interest rate cuts by the Federal Reserve plus other moves will translate into a 2.5% growth in the economy for the third quarter and a similar pace in the fourth quarter. Next year, though, we expect a tepid 2% or so gain in gross national product, and it may feel even slower to some. John Silvia, chief economist with Wachovia Corp., says, “We’re still working through the housing crisis, and we’ve got credit problems to deal with.”

The Roadmap Chart has served as a pretty good indicator of the trend parameters for more than 4 months. Johnny-Come-Latelys haven’t had too many late entry opportunity as we haven’t seen an upper channel touch for some time. The Master Time Calculator indicates that March 23-March 25 is the next window in which to look for a reversal or change in trend.

“The Fed’s failure to expand the set of institutions it deals with reflects failure to adapt to the new world of financial intermediation. Previously, lending was dominated by banks, which meant the Fed could address liquidity shortages threatening the supply of credit by providing liquidity directly to banks. Today, lending is increasingly separated from banks. First, banks sell many of the loans they originate so that the ultimate lender is not a bank. Second, many originating lenders are non-bank firms. That means the credit supply is vulnerable to disruptions among these other lenders.” Preventing a Financial Crash

The columnists in the AsiaTimes are an unending source of analysis and most often criticism of the American financial system. Sometimes you can’t help get the impression that it’s a wonder our polity has managed to survive without the guidance of these ever so prescient journalists.

Hopefully, the Fed, and other Central Bankers when needed, will keep liquidity at the top of the priority list. Inflation and a battered dollar will no doubt result but those evils as bad as they can be are not fatal.

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