Bafflement of the Inflationists

The inflationist gold bug does not understand why yields are down, commodities (ex-wildcards like Agri) are down, reflation trades are down, the US dollar is up and yet gold and silver are up. From

yieldscommodities, gold and silvercurrencies

Well, where gold is concerned it’s just a partial Macrocosm of counter-cyclical forces (ex-yield curve, ex-real contraction) at work, doing as they should do. Actually the Macrocosm today is still just a little microcosm, jittering around with daily market sentiment swings.

Where silver is concerned I think it is leadership, toward a new inflationary phase (steering away from the Macrocosm or creating a different one) that will come about after max-bafflement of the inflationistas. The Silver/Gold ratio led the recent bounces in everything from Industrial Metals to Lumber to Treasury yields and then declined as that stuff bounced. If Silver/Gold holds here and makes a new upturn it could signal that the next bounce in the reflationary stuff would be a real rally.

silver gold ratio

I know some of the above sounds confusing but depending on how this week goes, we could be looking at the next deep theme to sink our teeth into in NFTRH. Frankly, heading into this week NFTRH’s letter writer was not overly clear on the situation.

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