Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.
I agree with your bias but I sure disagree with your conclusions written today. If inflation (as measured by the PPI) is up huge tomorrow, I suspect gold and silver will get hammered and hammered hard, probably more gold than silver. If inflation is up, bonds will sink, and with that the US $ will probably rise with rising treasury yields. That is my belief. Gold would likely selloff on a rising US$.
On the other hand, if inflation is weak, I expect the Euro to rally and treasuries to rally and the dollar to fall and gold and silver to rise. For the record, I expect tame inflation numbers tomorrow (even if they have to cheat) on the basis of falling grains and stable to falling oil prices. We have to see the combined affects of CPI and PPI to know, but I say metals are a buy because the rest of your analysis is wrong!
Bet you a quarter on it too.
Minyan Mike Shedlock
Hi Minyan Mike,
I can see where you are coming from and point well made. It is certainly very possible, although I think that gold will move independently from the dollar and bonds, similar to its 12 buck fall with no currency/bond moves last week. Headline inflation rises scare the heck out of people and they run to gold. Have you ever considered a scenario where bond yields are rising, the dollar falling and gold rising? That is something on my radar screens but still a bit away in timeframe. That will be pretty messy for sure.
Happy to have a beer on it... I'm in NYC late Aug so I can buy it for you then!
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