Gold Provides an Answer
In our opinion yesterdays market told a story and gave a signal.Â
In the Main Site Bubble section which we wrote on January 22, 2008 we listed all the Bubbles with the caveat that the last two that would burst would be Commodities and Offshore Currencies (anything but the US dollar).Â Now that is happening, $ 8.00 corn and $ 150 oil were the peak points.Â We are not going back to revisit those prices as a Rolling Deflation is now in play.Â There will be rallys and there will be breaks, but the important point is that in total, most everything is headed LOWER long term. That means tech stocks, real estate, regular stocks, commodities, gold, farmland, etc.Â
This is not a short-term comment, this is about the last half of this economic cycle, 2008 to 2017, with the bottom sometime inbetween.Â Yesterday’s market action on gold broke the back of the commodity bubble, gold led everything up since 2002, it will lead everything down.Â What this means is that rallys to 900 on gold, 135 on oil, $ 6.00 on corn, and 1360 in the S&P are made to be sold and we may even not reach those levels on the bounces.Â A change in psychology is mandatory as the excesses of the past are eliminated from the markets.
7:27 AM CDT