Money manager Don Hays isn't yet ready to put serious money on it, but he does like what the breakdown in the price of gold signals for the longer-term prospects for U.S. equities.
The relative strength of US stocks is the best barometer in the world to measure all the wisdom of the world concerning the outlook for economic propserity. So the 11-year record of fear is breaking a trend that has not really been broken since that horrible event on 9/11.
CNBC's Stephanie Landsman fills us in on the expansion plans of Gold Buyers International, which is opening kiosks in shopping centers around the world to buy our gold coins and jewelry. But don't think it's a sign that the gold rush is getting frothy. We still have a ways to go.
"I would say we are likely in the sixth inning now. So there is still more to come. And, as we've seen with markets for the last twenty years, the latter stages are typically the most explosive, therefore the most dangerous," said Sorrentino.
The price of an ounce of gold in 1980 was $400. Ten years later, the US consumer price index (CPI) was up more than 60%, but the price of gold was still $400, having risen to $700 and then fallen back during the intervening years. And by the year 2000, when the US consumer price index was more than twice its level in 1980, the price of gold had fallen to about $300 an ounce. Even when gold jumped to $800 an ounce in 2008, it had failed to keep up with the rise in consumer prices since 1980.
“Take Your Gains,” says Forbes. And once you’re out of stocks, stay out until the bear market is over…probably at around 3,000 – 5,000 on the Dow. When the price of gold equal the price of the Dow, it will be time to switch.
While it is true that the implied inflation has been climbing since it almost hit zero last year, it is not at levels that suggest inflation is going to skyrocket. This means that the Fed should be far more concerned about getting the economy moving again. Any move to tighten up monetary policy by raising interest rates would be a serious mistake.Also: If you read to the end of van Dijk's piece, you'll see some thoughts about the price of gold and the idea that — gasp — supply and demand, not a bunch a wily speculators, may actually be driving the commodity's price.
“We weren’t necessarily seeing the rush to safety of this safe-haven market that gold has been in the past,” says Darin Newsom, DTN senior commodities analyst. “We were seeing a get-me-out effect in all commodities, and there was no belief that the gold market was any more sustainable than any other commodity.”
- ALEX B FRUIN INHERITANCE TRUST; CANDACE F STEFANSIC INHERITANCE TRUST; CANDANCE F STEFANSIC INHERITANCE TRUST; FRUIN, ALEX B TRUSTEE; FRUIN ALEX B INHERITANCE TRUST; STEFANSIC, CANDACE F TRUSTEE; STEFANSIC CANDACE F INHERITANCE TRUST; STEFANSIC CANDANCE F INHERITANCE TRUST
- ROSS, BRIDGETT D
- COOKE, ETHEN LANYARD TRUSTEE; COOKE, ETHEN LEWIS ESTATE
- JACOBS, JESSICA ALEXANDRA; JACOBS, ERIKA BESS