Are you aware of the impending doom on the financial markets? I am assuming no. The Dow and the spot price of gold will reach 1 to 1 probably about $5000-$6000oz and the dow being 5000-6000. You can expect the big banks to be 0 in the near future. - Scott J
I believe that once the Euro crisis is over the attention will turn to the US. The dollar is only gaining against other currencies now because we are the lesser of the evils. Really it is a race to the bottom. We are the next shoe to drop. Of course the yields are going to 4%. It has to in order to attract people. That high yield is directly correlated to the uncertainty and risk involved in being in the dollar. QE3, 4, 5 is coming. States are about to fail and go bankrupt - i.e. California, Illinois, etc. I'd argue that would drive up yields and commodities.
One other thing to note. If you take a look at the DXY (Dollar Index) on a given day there are plenty of days we have strong rallies in the dollar without corresponding declines in the PMs. The PMs are beginning to decouple from the DXY and it is becoming increasingly irrelevant - again because we are only appreciating relative to other bad currencies. It is not a vote of confidence in the dollar.
You might want to look again. Just about every major currency that been gaining against the dollar has topped out if its priced in foreign currency i.e GBP/Euro/AUD/ etc and bottomed if priced in USD e.g JPY/CHF. The stronger currencies should be battering the USD like NZD/AUD/CAD/CHF but they say otherwise. The weaker ones EURO/GBP are as good as finished. The DXY is more likely to rally to 85 within the mext 2 months. And historically where there has been a convergence between DXY and commodities ( Commodity Index) the net result was divergence in favour of DXY direction- based on the evidence I see I dont see this changing soon. In other words I'm long USD in currencies and neutral in commodities expect those that are not strongly correlated to USD movement like - Cattle, Sugar, Coffee,Cocoa, Cotton etc. Its the metals and energies groups that are more likely to fall off the cliff soon. Lets see how it plays out I could be wrong but until then ........
Here is something interesting - On the weekly chart you will notice that from November both DX and commodities having been rallying - convergence. Its not going to last long after close examination of movements of individual commodities like Gold/Silver & Currencies etc. The red is Commodity Index & Green is DX - weekly
I am also writing a blog that has all the information that Illinimatt81 has been talking about. I am his brother and I have been looking at these stocks a little longer than him. You can visit my blog (where I have an updated journal on these stocks as well.. and explanations on gold/silver prices)... at http://thehardrightedge.com/2010/12/04/incredible-week-coming-to-junior-miners/ -- Please feel free to spread it if you find it useful, Scott J
Ok, you are overdue for an update. I am curious how the junior crew of silver miners made out the last week because on the surface that risk trade selloff seems to be in the early stages of happening. Whether you understand or not, you are not hedged at all, your portfolio will either quickly make a lot of money or lose a lot of money daily, and the losses will be premarket without warning.