As the industry prepares to show its wares and everybody who is somebody in the gold analyst and gold writer communities prepares to see, be seen and especially be heard…
Wacky title aside, with nominal bonds and TIP bonds each rising and the TIP/TLT ratio still dropping, the indication is of course declining inflation expectations (and a lurch toward risk…
Our doggie (Spike) back from his adventure, it was time to settle in and write a good, comprehensive report on the financial markets. So I did; 40 clear and actionable…
I created the title and then had a flashback to Spy vs. Spy… :-)
Anyway, here are some daily charts of other items vs. SPY. I am getting nudged in the direction of ‘inflation trade’ and as part of that I might need to concede that the US stock market may not go the way of the bears with inflation in the system, post-Goldilocks. Several of my long positions are in alignment with a potential ‘inflation trade’, including US manufacturing/exporters. I still hold SPY short. Ouch, but it’s more than fine; the 2016 out performers are seeing to that.
Here are relevant markets vs. SPY, beginning the EM’s, which we long ago noted were out performing. EEM-SPY is doinking the SMA 200 for the first time today.
With the monetary metal popping by a couple hundred bucks an ounce in 2016 people are coming out of the woodwork to advise us about its vast upside and on the other side of the spectrum, its dangers. I have done a lot of bitching and moaning about gold’s promoters and bashers alike, because they seem to use similar sets of incorrect assumptions from which to extend their theses. Let’s focus on one of the negative articles; in this case a negative piece on gold mining.
I think I am going to do this on a semi regular basis going forward, with both bullish and bearish articles that I think are not giving people a straight scoop (as I see it, anyway). For some reason gold stirs emotions far beyond the average asset. There is ideology, religion, politics and flat out misunderstanding in the worst of gold analysis. Gold mining can be even more misunderstood due to the sector’s unique counter-cyclical dynamics.
Gold Equities Are Not Good Long-term Investments –Seeking Alpha
I agree wholeheartedly with the title.
Since it seems to be the time to start writing more about the miners after years on the out cycle, with only the eternally bullish pompom squad micro managing the…
As crude oil continues down today we are presented with a perfect opportunity to review why gold mining fundamentals can IMPROVE in a rising US dollar atmosphere. So many people run the equation through their heads: USD Strong = Run Away!
The following is the opening segment of this week’s Notes From the Rabbit Hole, NFTRH 276:
Somewhere along the road from the 2000 bottom in gold stocks to the 2008 flame out of inflationary hysteria, the gold stock sector went from counter cyclical first mover to ‘inflation trade’ also ran. Gold stocks put in a secular bear market bottom in 2000 just as the US and many global economies were topping out.
Then came the era that NFTRH has labeled ‘Inflation onDemand’ (IoD). The economy was successfully* inflated by Alan Greenspan early in the decade as easy monetary policy fomented an epic credit bubble, which took over and did the heavy lifting for a cyclical bull market and buoyant economy that terminated hard in 2007/2008.
During this time of IoD ‘inflation bulls’ and commodity bulls who had all the answers for a newly inflation-phobic public emerged and took center stage. Misperceptions were formed, cemented and driven home. Nowhere were the misperceptions more intensely and dangerously embedded than the gold stock sector, which at its core is different than most commodity sectors and indeed, most stock sectors. Introducing another one of our ‘busy’ charts to illustrate…
Okay, article over… the chart says it all. No more words necessary! :-)
The chart is a confusing jumble you say? Okay then, let’s take it point by point.