beabaggage

Coming Inflation To Boost Stocks, Gold

Ridiculous to believe that inflation, especially the 70's -80's type inflation we are in for due to the massive monetary stimulus going on that has no end in sight, will be good for stocks. Gold/Oil/Commodities? yes. Stocks? heck no, we are looking at Dow 4500. People are still far too bullish, thinking it's over it's over. it is not. The massive stimulus will just make another bubble and you can bet it will be spent on hard assets. This actually may be good for realestate. Would you rather own a hotel or Kellogg Stock trying to raise prices to keep up with soaring costs? The monetary base is growing exponentially. This plus federal stimulus world-wide, low interest rates and shrinking sources of commodities and food will make the next decade the most inflationary of all time. Loss of faith in company financials and management will push people into cash, with rates low, they will start to chase yield, great for oil, gas, other commodity stocks with good yields.

Don't Write off the Gold and Commodities Bull Run

Sharp corrections in commodities are not unusual. Follow Louise Yamada, technician, for years. She is still bullish on most although advising tight stops with long term support level in gold at around 760. Rising costs in the supply chain make incremental and marginal production expensive so cap ex and mines with high cost will be put on hold. Best way to play is basket of junior minersin safe countries like NXG, PAL,CDE, etc. (long all) which have been beaten up but have good cash, no debt and low cost mines coming on line or in production with little capex needed. Harry Dent says this pullback is/was expected this summer and get ready for the major spike to come. Best thing is to average in costs. Indian/Chinese/Russian... consumers will view gold at 800 cheap compared to 950-1000 and support demand.
very good article enjoyed it. Especially re wages-- SWC recent report says shortage of labor in mines-- they produce plat/paladium in Montana and these workers can shift to Oil/Gas for shale or other mines. (Long SWC.)

Bear Comparison: Today's Junior Resource Sector vs. 2001's Nasdaq

Agree with John here, the headline is "commodity run is over" so time to buy contrarians. NXG, PAL, SWC, CDE all in my portfolio and have added. These are safe mines in "safe" countries with large cap ex aleady out of the way, easy "Pickens" for the next tier co's like Iamgold or large ones like Goldfields tired of being burned in the third world. Dollar is still way down. FED printing money as are EURO Central Banks and this just continues to fuel the bubble in cheap money chasing goods hence- inflation.
Buy juniors /keep averaging in for rebound makes sense to me, thanx for chart to support bottom may be forming. Silver still holding around support as is gold when I look at my Louise Yamada charts/her analysis as well.