We Have Passed Though Peak Fiat Wealth
Wednesday, 14. November 2007, 16:15:22
I. Introduction
Wealth garnered and accumulated through stocks and bonds has topped out; and to make matters, liquidity is drying up.
The hard asset gold, which trades inversely with an ever decreasing dollar, is likely to increase in value.
One can invest in gold via the ETF GLD or purchase, store and easily trade gold at BullionVault.com
II. All of these fiat assets -- ETFs, currencies, futures contracts and mutual funds have topped out
A. These trend setter fiat assets have peaked out
Precious Metals GDX
Natural Resources OIH
Energy XLE
Currencies DBV
Mining Exploration Companies SSRI
The Nasdaq QQQQ
Housing Finance FRE and FNM
Banking KBW
Financial Stocks IYG
Agrigusiness MOO
Investment Banking KCE and GS
Water Privatization PIO and FIT
Emerging Markets EEM
Housing ^HGX
Retail RTH
Transportation IYT
Industrial XLI
Utilities UTH
Brazil EWZ
India INF
China FXI
Mexico EWM
Retail XRT
Industrials EXI
Steel SLX
Metal Production XME
Materials MXI and XLB
Communications DGG
Dividend Payers DOO
Aerospace and Defense ITA
Building And Construction PKB
The Futures Markets In this report most all future contracts have turned down; I expect gold to top out soon and fall; yet soon, yes soon it will be time to buy gold.
Mutual Fund VICEX
Consumer Spending Slows And Earnings Corporate Earnings Fall
Chad Hudson writes that consumer spending is slowing and corporate earnings are falling meaning that stock values will never ever be higher again.
Liquidity Is Contracting
The CDO Bust of October 9th, 2007 set off an unwinding of the Yen Carry Trade; and caused a disolution of liquidity provided by the following sectors: investment banking KCE, finance IYG, banking IAT, mortgage FNM and FRE, and debt guaranty ABK and FSE and MBI.
Some liquidity went into the bond market.
Here is Jack Chan's chart of TLT which shows investment demand has been rising October 11, 2007: two day's after the CDO bust investors grew bullishly convinced that the Fed is on a strong and unveering course to lower interest rates; but look at the recent trading: there is a massive lollipop hanging man candlestick signaling a soon coming end to the upward activity; and then consolidation in a sideways move to support.
There is going to be a price drop in bonds soon. The investment mania will cease: the marketplace will declare a defacto interest rate hike associated with the risk associated in owning US debt, i.e. a military attack on Iran; or there will come a gradually increasing belief that the Fed will reverse course, and raise interest rates due to inflation fears, or a hefty rise in gold will temp investors to go long gold, and short the long term US Government bonds.
Future wealth will be garnered and accumulated through gold and gold alone
All of the above fiat assests are dollar denominated; the dollar is dying; one is wise to transfer out of the ever depreciating dollar and currencies and soon, but not now, into the hard asset gold.
Another reason for investing in gold is that the yield curve is de-inverting which portends, inflation, stagnation and recession; all of which favors investment in gold as well.
Charts will show the right time to invest in gold
Gold relative to silver Currently silver is outpreforming gold; I look for this to change soon as silver is an industrial metal whereas gold is an investment metal
Gold relative to copper
Gold reltive to oil The ratio increasd from 8.4 to 8.8 recently; I expect the ratio to be consistently strong somewhere aove 8.4
Gold relative to US Stocks When gold relative to US stocks turn up, it will be time to buy gold
Gold relative to US Treasury Bonds
When gold relative to US treasury bonds turns up it will be time to buy gold.
Summary
One could place one's retirement assets in the ETF GLD; and then for extra return one could be invested, with margin, short the emerging markets as these have been parabolic up; and will soon be parabolic down; ProShares EEV is 200% inverse of the emerging markets.
One could place one's investment wealth in the easily traded and secure BullionVault.com
Wealth garnered and accumulated through stocks and bonds has topped out; and to make matters, liquidity is drying up.
The hard asset gold, which trades inversely with an ever decreasing dollar, is likely to increase in value.
One can invest in gold via the ETF GLD or purchase, store and easily trade gold at BullionVault.com
II. All of these fiat assets -- ETFs, currencies, futures contracts and mutual funds have topped out
A. These trend setter fiat assets have peaked out
Precious Metals GDX
Natural Resources OIH
Energy XLE
Currencies DBV
Mining Exploration Companies SSRI
The Nasdaq QQQQ
Housing Finance FRE and FNM
Banking KBW
Financial Stocks IYG
Agrigusiness MOO
Investment Banking KCE and GS
Water Privatization PIO and FIT
Emerging Markets EEM
Housing ^HGX
Retail RTH
Transportation IYT
Industrial XLI
Utilities UTH
Brazil EWZ
India INF
China FXI
Mexico EWM
Retail XRT
Industrials EXI
Steel SLX
Metal Production XME
Materials MXI and XLB
Communications DGG
Dividend Payers DOO
Aerospace and Defense ITA
Building And Construction PKB
The Futures Markets In this report most all future contracts have turned down; I expect gold to top out soon and fall; yet soon, yes soon it will be time to buy gold.
Mutual Fund VICEX
Consumer Spending Slows And Earnings Corporate Earnings Fall
Chad Hudson writes that consumer spending is slowing and corporate earnings are falling meaning that stock values will never ever be higher again.
Liquidity Is Contracting
The CDO Bust of October 9th, 2007 set off an unwinding of the Yen Carry Trade; and caused a disolution of liquidity provided by the following sectors: investment banking KCE, finance IYG, banking IAT, mortgage FNM and FRE, and debt guaranty ABK and FSE and MBI.
Some liquidity went into the bond market.
Here is Jack Chan's chart of TLT which shows investment demand has been rising October 11, 2007: two day's after the CDO bust investors grew bullishly convinced that the Fed is on a strong and unveering course to lower interest rates; but look at the recent trading: there is a massive lollipop hanging man candlestick signaling a soon coming end to the upward activity; and then consolidation in a sideways move to support.
There is going to be a price drop in bonds soon. The investment mania will cease: the marketplace will declare a defacto interest rate hike associated with the risk associated in owning US debt, i.e. a military attack on Iran; or there will come a gradually increasing belief that the Fed will reverse course, and raise interest rates due to inflation fears, or a hefty rise in gold will temp investors to go long gold, and short the long term US Government bonds.
Future wealth will be garnered and accumulated through gold and gold alone
All of the above fiat assests are dollar denominated; the dollar is dying; one is wise to transfer out of the ever depreciating dollar and currencies and soon, but not now, into the hard asset gold.
Another reason for investing in gold is that the yield curve is de-inverting which portends, inflation, stagnation and recession; all of which favors investment in gold as well.
Charts will show the right time to invest in gold
Gold relative to silver Currently silver is outpreforming gold; I look for this to change soon as silver is an industrial metal whereas gold is an investment metal
Gold relative to copper
Gold reltive to oil The ratio increasd from 8.4 to 8.8 recently; I expect the ratio to be consistently strong somewhere aove 8.4
Gold relative to US Stocks When gold relative to US stocks turn up, it will be time to buy gold
Gold relative to US Treasury Bonds
When gold relative to US treasury bonds turns up it will be time to buy gold.
Summary
One could place one's retirement assets in the ETF GLD; and then for extra return one could be invested, with margin, short the emerging markets as these have been parabolic up; and will soon be parabolic down; ProShares EEV is 200% inverse of the emerging markets.
One could place one's investment wealth in the easily traded and secure BullionVault.com
WIDGETIZE