Gerry Sullivan

Thursday Outlook: Commodities, Global Markets

f... was typed as: foreign. Does Seeking Alpha consider that a dirty word?

Thursday Outlook: Commodities, Global Markets

The biggest anomaly in this stock/gold/commodity/f... currency rally is that US Treasury interest rates have stayed so low. The 2, 3, 5, 7, 10, and 30 year Treasury securities are all trading at premiums to their most recent auctions.

With high and rising unemployment the Fed can create money, boost asset prices, and still keep rates down at historic low levels. In spite of what they say, this is clearly what they want to do.

The Treasury and the Fed know that only inflation will solve our
most immediate economic problem: the sluggish economy and resultant high unemployment. Inflation will eventually boost real estate prices which will help save the banks.

Stocks and commodities are going along for the ride.

Thursday Outlook: Commodities, Global Markets

Much of "the crowd" (myself included) thought the market was
undervalued when the Dow Jones Industrials broke below 10,000
on the way down 12 months ago. That was Oct 6, 2008.

Now "the crowd" (at least the majority on Seeking Alpha) thinks the market is overvalued at the same level.

I see the pre-market looks lower today and tomorrow is the last day for trading Oct options, so a pause here makes sense. But, ask yourself what you thought in early Oct 2008.

Which market was more favorable for going long, Dow 10,000 in early Oct 2008 or Dow 10,000 yesterday?