Roy has a very nice clip to share with us this week-end. He went bullish on the equities markets a couple of weeks ago as he saw the bond bubble starting to burst and now is bearish on the Dollar. He spends the majority of his time on this clip discussing the Dollar and the South African Rand, which is also a great way to compare the Dollar and Gold, since most of the South African economy is based on Gold, very interesting video. Click here to view the short clip!!!
Here is a great chart that goes along the same lines as what Roy is talking about in his video, a comparison of the SPX and Gold. Notice that since the April high that the price of Gold has gone up quicker then the SPX resulting in a down trend in the comparison, in fact, you would still be flat if you went long SPX at the July bottom in terms of value (not dollars). QE2 is just going to further this discrepancy as the Dollar falls faster then the SPX rises. It is truly sad to see this as most Americans invested in the Stock Market will be seeing their monthly Account Statements growing in Dollars, but few at first realize that the fall in the Dollar is actually destroying their wealth, an over-all trend that started back in 2000. This is Ben's plan, to make Americans FEEL like their wealth is growing, I hope this time the people wake up and see how these FED actions are becoming the largest scam in history!!!There is some good news coming out, Ron Paul vows renewed Fed audit push next year-
U.S. Republican Representative Ron Paul on Thursday said he will push to examine the Federal Reserve's monetary policy decisions if he takes control of the congressional subcommittee that oversees the central bank as expected in January.
Paul, who has written a book called "End the Fed," has been a fierce critic of the central bank's efforts to boost the economy through monetary policy.
"It's an outrage, what is happening, and the Congress more or less has not said much about it," he said.
I believe this is America's best shot, and maybe last chance at stopping the FED and holding it accountable, as it's power has grown so much now that most in Congress look the other way instead of growing a back-back and forcing the FED to open their books.
So Michael, what in your opinion are the best asset classes to invest in for the forseable future? Other than physical gold and silver, I am finding it hard to find anything which will protect me in real terms. Keep up the great work!
ReplyDeleteTom, if the Dollar continues to tank, there are overseas options, or precious metals. I have no idea of your time frame or risk tolerances, so it is an open ended question.
ReplyDeleteAccording to my calculations the Dollar is due to go upwards quite significantly and might rally at least 15% between mid Nov and Mid February. The QE is fully discounted.
ReplyDeleteDuring this period equity markets should suffer a correction which could be surprisingly sharp.
However from mid February I see another equity rally taking SPX to the 1400 area by July.