We will definitly have to retest the $22.75 area unfortunately. Hopefully we hold support at $22.75 or it could even go lower than that, but the charts don't lie about these things unfortunatly, its also overbought again, but we will definitely have to retest,then we will see if it heads lower or forms a double bottom then comes back with volume at about $22. In other topics, Stagflation is a recurring topic when the economy is growing slowly or not at all and people feel gloomy. In the 1970s, U.S. companies were inefficient and unable to keep up with the high quality and variety of foreign goods. Two oil shocks and loose monetary policy triggered inflation, which was unusual for a recession: Inflation generally appears when aggregate demand is too high, exactly because the supply of goods and services cannot keep up with growing demand. Instead, stagflation, the sum of stagnation and inflation, appeared in many developed countries. Policymakers did not know what could have helped the situation. Eventually it ended, but at the cost of a painful readjustment. What could cause stagflation again? Let's start with the stagnation component. U.S. consumers have been spending beyond their means thanks to second mortgages and relatively easy credit: If they ceased borrowing any further and reined in their spending, we could see a significant slowdown. Similarly, the U.S. federal government along with some local governments have been running deficits, spending more than they collect in taxes and other revenues. A tax reduction when a deficit is present is a loan the government takes from your children and passes to you. While it is logical to borrow money from future generations to invest and leave them with a cleaner, safer, and more productive world, it may be counterproductive to borrow from them to finance consumption, unless it is for a very limited time. What if the future generations (and the rest of the world) stopped lending us money? That is, what if the U.S. trade deficit, which is the result of consuming more than we produce, had to be reduced, perhaps using a large devaluation of the dollar? Could households and governments live more within their means without triggering a crash in aggregate demand? Would real estate prices fall? As for inflation, energy and basic-material prices have been rising, due in part to sustained demand from emerging economies. Can the U.S. at least partially free itself from the economic and political yoke of elevated energy consumption and therefore damp the effects of resource price peaks? Probably not. Besides, the dollar devaluation I mentioned earlier would make imported inputs even more expensive. In addition, an accommodating monetary policy has allowed growth in asset prices, particularly real estate. In turn, this enables households to finance consumption by borrowing more and more, leading to further inflationary pressures. Perhaps bank supervisors, including the Federal Reserve and the Comptroller of the Currency, should discourage banks from offering creative mortgages and second lines of credit to borrowers who already have a lot of debt. In any case, the accommodating monetary policy of the Greenspan Fed may already be leading us into an inflationary period. Hence, the case for stagflation as a plausible scenario exists. A collapse in internal demand together with a dramatic fall of the dollar and upward pressure on prices may happen.