Monday morning, PMs getting slaughtered.
Even though the dollar has temporarily slumped back to 81, the 3 day chart looks like it might only be basing for another upside move.
I read an article in this morning's WSJ "justifying" the upsurge in the dollar, re-read it twice more and I still didn't understand it. The currency & bond trader's mentality is too alien to me.
Looking at the broad index this morning, and "feeling" the news, this could be the lnflection point for a retracement of the broad market. If it is, then most people "panicing" to withdraw back out of their mutual funds will want to go to cash, not to a PM investment of any type. So back we go into treasury funds, and that will sink the miner's and the repositories.
Obviously, I don't think I want to hold here.
I want to get ready to go into TZA, if I feel the time is right.
The question is where is the US TBond going?....It has cratered and dropped again today...All bets are off if interest rates soar.http://finance.yahoo.com/echarts?s=%5ETNX#symbol=%5ETNX;range=1y
..If "interest rates soar" as you put it, more than all bets will be off. The economy will find itself no longer circled the bowl but doing a very deep dive.
I can't imagine anything more incompentent for the Fed to do than allow or unleash the rath on the economy of significantly higher interest rates. If they think it is the only way to sell t-bonds, think again..QE is no good of course, but it beats a bigtime major depression.
They always seem to sell their treasuries although as of late there have been "issues".
Don't you think some of the risk premium inherent within PM was taken out by Obama's speech in Cairo last week?
The dollar's coming back but the chinese are talking about yuan denominated debt and I've heard talk of a pan-arab currency. without the need for dollars, dollar could really go south. Part of the reason it's going up however is due to increase in the 10 year making it a more attractive investment.
Interest rates could soar as everyone wakes up to the fact that we owe the world 1/2 year of our GDP in treasury debt. We also only have what, a quarter trillion in gold and $50 trillion in dollars all over the World?
PMs are in a secular bull trend and this is a dip based upon the risk premium taking a vacation from Obama and the 10 year taking a hike upward. Pretty strong stuff IMHO. How long will it take for that to iron itself out? Good buying opp.
I have always up to now thought that inflation was the most likely possibility. I have put down the lower prices for homes and consumer stuff as "supply imbalance" issues. But now I'm changing my mind.
I think we really are seeing deflation now. Everybody is lowering their prices; restaurants, food supplement companies, handy-man workers around the house and practically anyone else offering a service.
My customers are either demanding (a few)or hinting (most) that they want me to lower my prices. People I hire for temporary work projects are offering to work for less money, even without me asking them to.
The mindset that we have to offer more value for the dollar is spreading, and I think the ONLY thing that will be "immune" to this is oil, simply because it is to a large extent price contolled by a cartel.
This can't be good for PMs, and I think the only thing that will change it is if the govt deliberately forces inflation somehow, and that will take time. Bottom line, I think now is the time to be in cash. Maybe not today, or even this week, but sooner than later for sure.
"This [deflation] can't be good for PMs, and I think the only thing that will change it is if the govt deliberately forces inflation somehow, and that will take time. Bottom line, I think now is the time to be in cash. Maybe not today, or even this week, but sooner than later for sure."
This is a puzzling statement. My take is that government is "deliberately forcing inflation" NOW - ALREADY. And is doing so to forestall a deflationary cycle. "Inflate or die" is the name of the game which, or course, they will never admit categorically but that is what I think they are doing.