Concern over Federal deficits is rocking bonds, sending yields higher. [[TLT]] is getting smashed to the tune of a staggering 1.7%. Gold is NOT a safe investment, when it pertains to the “wall of worry.” Gold is a play on inflation, period. What we are seeing today is a seismic shift into dollars, as predicted. What I did not expect was the move up in yields. However, I am fairly confident today is an anomaly and should the market continue to weaken, funds will shift from cash to government debt.
Let me be clear: despite the tepid 45 point move to down downside (as of 3:00 et), there are some very troubling undercurrents with this tape, all stemming from the move up in the dollar.
On a lighter/sweeter note, [[SGG]] is up more than 5%. What an oddity.
In short, get ready for some downside “fuck you, you’re dead” action.
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I hope you right flyter. I hope to see my vxx get a little giggy to the upside, sort like michael moon walking up a steep embankment. With all respect to michael, he was the greatest moon walker ever.
I’ll tell you where big money is going. Back in building big homes for the rich.
I’ll tell you where big money is going. Back in building big homes for the rich.
I disagree. Asset inflation is very much relevant
SGG up 5%
You got into Goldman’s servers?
Bracing for Tsar Bomba
Nice call Dr. Fly. I’m patiently waiting for the future to unfold. It’s funny how quick one can go from feeling that one’s “balls are on the chopping block speed dicing carrots” to feeling calm, collected, and on the right side of things.
You sir are truly a Space Alien Magician. Thanks again.
Is it under a giant W?
TraderCaddy would have thought of that one too
I ready for the action…
Does this make sense?
The 3X Long Semis (it’s new) SOXL is down 6% while the SOXS (3X Semis short ) is barely up.
More 3X etf buffoonary.
Disclaimer: I mention the above at risk Fly will get all excited and see there are two more 3X etfs out there to be played.
The leaders still look healthy
No reason to run yet
RUN FORREST RUN
will be adding gold now… and lower.
Gold is not an “inflation” play — it’s a play against fiat printing. Budget will print $1 trillion extra every year for next 10 years.
Your disdain for gold is duly noted, but outrageously wrong in the bigger picture.
Okay, prove to me, aside from stupid gold bug theories, that gold is anything but an inflation play. All I need to point to is low inflationary periods with struggling gold prices, like 2008.
Your move.
Gold rose from about $285 in 1999-2000 to where it is now and we have had low inflation.
Between 1982-984 gold soared when inflation was coming down after Volker cracked down.
IMO gold is more about negative interest rates rather than inflation.
Gold did go nuts in the late ’70s during high inflation but the rates were negative then too.
Gold would have gone nuts in the ’30s if the price wasn’t controlled and we were in a deflation period.
Check to see what Homestake Mining did in the ’30s- it went from about 50 to 500.
http://www.gold-eagle.com/editorials_98/vronsky060698.html
Way ta go TC … good stuff!
TC:
We had insane monetary policy over the last 10 years. How can you say there was no inflation, during 3 bubbles. Fuck the CPI. We had runaway credit, real estate and stock markets over that period.
Bubbles do not equal inflation.
Bubbles in certain sectors are created by negative rates. Greenspan kept rates artificially low for too long allowing for cheap credit vis-a- vis (sorry for the French) the home real estate market.
Can’t really disregard the CPI for this period.
The last 10 years we have had lower prices for many items.
If gold was keeping up with inflation (from 1980) gold would be well over $2000.
I will look to negative rates for gold to move.
http://seekingalpha.com/article/109529-negative-real-rates-will-drive-gold-prices-up
I agree 100% that the CPI is nearly worthless as an inflation yardstick. Every time we start to see inflation rear it’s head the increments on the stick get moved. This, that and the other thing are deleted from the collection along with other things being discounted as a percentage of the whole. Seasonal adjustments and not counting things like food and fuel……WTH is up with that. Do people not buy those things when the price gets high?
Real inflation has been clipping right along during the last decade.
You ain’t seen nothing … WIN!
“Gold is not an “inflation” play — it’s a play against fiat printing. Budget will print $1 trillion extra every year for next 10 years.”
————————————————————————-
Gold is a play on “perception” of inflation. Printing alone does not equal inflation. If a tree falls in the forest and nobody is around to hear it, does it still make a sound? Need velocity to get inflation. Short term, the perception of deflation has got the upper hand.
TNX will breach 3% again this year. Deflationary…Gold will definitely see low $900 if not mid $700. I would start buying at $950. Reason…with all increase in the supply of money, we will see a blowout in inflation in an intermediate term (18months time), and it will last for many years. I would say that gold bugs’ assessment of $5000 gold is not impossible by the end of this decade.
We are one EURO-zone headline away from $.84-85 on the $. If we get more of those headlines, the $ will see .89. The odds are that we will.
That analysis makes perfect sense to me!
To Jake who owes me a Lobster dinner:
“Fat babies make me sick
Fat babies make me ill
All that fat baby drooling
And that fat baby smell”
– Lyle Lovett
That is all. Looks like Fly is going to be right in TLT and VXX and you poor blog readers are gonna be eating crow AGAIN.
You are not only consistently wrong…
You are very odd.
_________
“Let me be clear: despite the tepid 45 point move to down downside (as of 3:00 et), there are some very troubling undercurrents with this tape”
That I agree.
About TLT, I’m not so convinced. We will have a failed auction some day, out of nowhere and then things *really* get weird.
Sam
The move in yields up is very troubling. However, we have yet to see asset re-allocation. Money managers are still very long stocks and commodities. My point: should that change, money will flow into treasuries.
Traders are doing “the Jim Rogers” on $SGG in between songs of doing “the Hugh Hendry.”
Fly,
Would you consider buying the dollar anytime soon?
Fly,
Where do you think money is going, if not in to treasuries? Big money is hiding in AAPL – lets see for how long.
What the hell happened to treasuries overnight? Did people really just wake up and realize “oh shit, the U.S. government has a mountain of debt waiting like a guillotine over our heads”??? Something is not right.
Ok, I’ll bite
What’s going on with Sugar?
TRUVIA
http://www.princeton.edu/main/news/archive/S26/91/22K07/
A sweet problem: Princeton researchers find that high-fructose corn syrup prompts considerably more weight gain
SPX 1300 by the end of the month.
End of Quarter window dressing, Fed pump, and Healthcare celebration going to make this market explode higher. BUY NOW or you will miss out!
Where is the fucking period. I expect perfection.