Maya_

Wednesday Outlook: Commodities, Global Markets

The 10 year spy volume data is most interesting. Compare the volumes during this bear with those on the prior one - volume is high, very high this time round. It looks like there has been a generational shift in wealth; possibly from older folks to those younger. I do not think capitulation of this level has ever been evident since the 70's. Maybe, just maybe the buyers are now ready to hold long term. More money chasing reluctant sellers might mean more upside. I would like to see volume return to less surreal levels in a long term context - the VIX has now returned to a more sensible level in the long term basis maybe much lower volumes will soon follow.

Own Gold? Time to Fold

Since Bretton Woods, gold serves no purpose. It is not really a store of value because its long term demand will continue to fall. Biggest demand is from India and that is eroding due to alternative investments gaining popularity. It works as a financial hedge and might stay strong a year or two, but a better financial hedge would be through a basket of commodities (at least metals, oil, chemicals etc are of productive use). I think the $ bears are in for a surprise. US deficits will likely rise for a year to year and a half, but after that two things will happen; GDP will rise faster than debt, which will reduce real debt as a % of GDP. In addition, it is likely that Obama will aggressively reduce the deficit. Once expectations of a falling deficit set in, gold is dead. Its not long.

Another reason gold is dead is my SA indicator. Whichever posts have max comments are over bought & likely far from bottoms.

The End of the Dollar and All Fiat Currencies

Since Bretton Woods, gold serves no purpose. It is not really a store of value because its long term demand will continue to fall. Biggest demand is from India and that is eroding due to alternative investments gaining popularity. It works as a financial hedge and might stay strong a year or two, but a better financial hedge would be through a basket of commodities (at least metals, oil, chemicals etc are of productive use). I think the $ bears are in for a surprise. US deficits will likely rise for a year to year and a half, but after that two things will happen; GDP will rise faster than debt, which will reduce real debt as a % of GDP. In addition, it is likely that Obama will aggressively reduce the deficit. Once expectations of a falling deficit set in, gold is dead. Its not long.

Is It Time to Buy? What History Shows

Article title needs changing. It is time to buy; has been for a while now with the valuations where they got to. Valuations can always get better, but what we have had the past month or so are good enough for me.