The deflationists continue to run rampant with glee as stocks, gold and commodities in general get hammered. Is this the market giving a big “thumbs down” to quantitative easing (QE)? Have central banks started to lose the final battle in their war to reflate asset prices? Or is this just the big dump before the insiders buy at the bottom and start the next pump?
[Read more...]Gold or Stocks: What to Hold During the Great Correction
December 14, 2010 by Leave a Comment
Gold or stocks?
Gold will go up another $300 next year, says Goldman Sachs. Bloomberg reports:
Gold rose 27 percent this year, heading for a 10th consecutive annual advance. Investors are seeking hard assets as governments and central banks led by the Federal Reserve pump more than $2 trillion into the world financial system.
[Read more...]Remembering November: QE2 vs. Bernanke’s Expectations
December 1, 2010 by Leave a Comment
The books are closed on November. Alas, there’s little joy in the broad stock market.
After we got “the best September since 1939â€�…and “the best October since 2003â€�…all we have this morning is “a November that wasn’t as bad as 2008.â€� Gee, swell.
[Read more...]How the Market Really Feels About Bernanke’s Money Printing
November 15, 2010 by Leave a Comment
As you remember, dear reader, we decided to hoist our old, tattered “Crash Alert� flag up last week. About mid-week, as we recall.
Not that we had any inside information. Mr. Market doesn’t talk to us directly. We just read the papers – just like everyone else.
[Read more...]Commodities Rally With Everything Else
October 14, 2010 by Leave a Comment
The room was humming harder
as the ceiling flew away
When we called out for another drink
the waiter brought a tray
– From “A Whiter Shade of Pale� by Procol Harum
Everything up; dollar down. That’s been the trend of late, in anticipation of what the pundits are calling QEII – the Federal Reserve’s earnest promise to further debase the currency through the purchasing of government bonds…and assorted other shenanigans and high jinks to be announced in due course.
[Read more...]A Few Reasons to Anticipate a Stock Market Downturn
October 7, 2010 by Leave a Comment
US stocks didn’t do much of anything yesterday. They spent the entire trading session dancing around the unchanged level like Victorian schoolgirls around a Maypole. The Dow Jones Industrial Average gained a smidgen, while the S&P 500 Index slipped a skosh.
The commodity markets danced a little more purposefully – perhaps like a couple of junior high kids “grindingâ€� at a school dance. The RJ/CRB Index of Commodity Prices advanced to a new 9-month high, while gold jumped to a new all-time high. The now-and-again precious metal tacked on $8.00 to $1,348.70 an ounce. Nothing new there…Gold is going up because the world is full of well-meaning central bankers who mean well to debase their national currencies in the pursuit of economic vitality. Sounds wacky, we know; but that’s what the top universities are teaching these days. The top universities are also teaching that a few highly educated men in nice suits can turn enough dials and pull enough levers to cure recessions and create non-inflationary recoveries.
[Read more...]Which Way for Stocks? Bonds Give a Clue
September 21, 2010 by Leave a Comment
Sherlock Holmes sometimes solved great problems just by lolling around in his smoking jacket and puffing at his pipe for hours. In “The Man With the Twisted Lip,� Holmes solves the case with ease without leaving his flat.
An incredulous Mr. Bradstreet asks, “I wish I knew how you reach your results.�
[Read more...]Why Stock Market Rallies Aren’t Worth the Hype
September 2, 2010 by Leave a Comment
First, the good news: Stocks staged a mammoth rally yesterday. The Dow managed a 2.5% run, while the broader S&P 500 scooted ahead 3%.
What a wondrous achievement this must have seemed like…to anyone who spent the previous month on the golf course, far away from their computer screen.
[Read more...]Why Bernanke’s attempts to fix the economy are only a façade
August 30, 2010 by Leave a Comment
America has an economy that produces about $13 trillion of activity each year. America also has a Federal Reserve Chairman that produces about 13 trillion raised eyebrows each year.
Last week, in Jackson Hole, Wyoming, Bernanke raised a few more eyebrows by asserting that the Federal Reserve remains in control – more or less – of economic conditions here in the United States.
[Read more...]
New Life for the New Trade of the Decade
First, stocks hit new highs on Friday. Gold lost $22 per ounce.
But believe it or not, our new Trade of the Decade is going well.
As you may recall, we began a “Trade of the Decade” back at the start of the 21st century.
“Buy gold. Sell stocks.” That was it. No fancy straddles, hedges or derivatives. Not even any stock selection. Just a simple macro trade that you could stick with for the next 10 years.
[Read more...]Click for detailed story