Crude and Commodities are taking a breather. Here are 10 reasons the markets look iffy:

March Nymex crude:

Chartz by TFC Charts. Here’s Comex Gold:

Gold looks to be making a complex ‘top’. $1450 is a bridge too far.

What’s happening?

 – High crude prices are eating the vital organs of the productive economy. Something has to give and is. $95 crude is approximately 5% of GDP with consumption increasing steadily and GDP overstated. This fuel price level has historically been a danger zone for economies.

 – High crude prices equal high food prices. The result is emerging instability in countries around the world with large numbers permanently exiled from ‘the good life’. Guess what? Politicians are scared!

 – America is not immune to instability, witness Jared Loughner’s rampage in Arizona. The media has desperately forgotten about it for us already … pimping the Super Bowl and American Idol … but Loughner’s was a political crime. More and more Americans are exiled from the good life along with more and more Irish, more and more Greeks, more and more British, more Egyptians, etc. Guess what? Politicians are scared. When the hired thugs stop beating protesters the end of a particular regime is nigh!

 – The Establishment’s ‘banks first- everyone and everything else in the country last’ strategy is beginning to wear on the markets. With shadow banking- and housing- ripoffs dead, the banks simply aren’t that profitable.

 – Meanwhile, the central banks’ zero- interest rate policies are destabilizing capital markets. ZIRP along with QE2 are bullish for the Fed’s pet banks … until they aren’t anymore. QE increases tail risk: what happens if deleveraging begins in earnest while easing measures are in place?

 – F/X volatility is high and this is worrying the carry traders. Also worrying is bedroom talk of US defaults: debt ceilings not extended and Chapter 9 bankruptcies for states. Add to this Japanese debt, potential Irish and Greek defaults, Italian and Spanish credit losses, German intransigence over EU fiscal union and Chinese hyperinflation. Keep in mind that all the entities in trouble are running massive energy deficits, including China.

 – China needs a strong dollar so as to pay its energy tab without bankrupting itself. Where does this leave trade?

 – The costs of export countries’ mercantilism is has become too great for these countries to bear. This is during a period where the energy cost of import countries’ consumption has been too great to bear for over a decade! What is the Establishment’s economic prescription for the mercantile nations? Start consuming more …

 – A political shift is in the wind: from pols being worthless shills for finance to being free agents. The risk of losing political backing is enough to give the markets the shakes. Every month which passes without a recovery is a month where the political establishment tires more of being servants for the Davos crowd.

 – Establishment’s economic technocrats are being unmasked as yes- men and courtiers. A few more ‘100% more debt’ and ‘Dow 36,000’ remarks from these boys and the system will have succeeded in rendering itself irrelevant.

It’s more and more risk from here on in …