When this bubble bursts there will be hell to pay, plus a look at how to protect yourself.
September 2 (King World News) – Ole Hansen, Head of Commodity Strategy at Saxo Bank: The Gold/Silver ratio is having another go at 75 support. With gold trading steady ahead of Friday’s Non-Farm Payrolls, a break could see silver take aim at the key resistance area around $24.50 (see chart below).
When Gold/Silver Ratio Breaks Back Below 75/1
Silver Will Attack Key Resistance At $24.50
The Weimar Effect
Holger Zschaepitz: Good morning from Germany, where inflation fears are rife. Meanwhile, there is already a 1000 euro bill with the likeness of ECB President Christine Lagarde, published by the popular newsletter Steingart Morning Briefing. (See below).
A $1,000 Euro Note?
Jeroen Blokland: The US Dollar Index is no longer rising, especially since Powell’s dovish Jackson Hole speech, supporting the rally in risky assets and equities in particular (see chart below).
US dollar Weaker Since Dovish Jackson Hole
Speech By Powell
Positioning for The Great Rotation…
Kevin Smith: The whole US equity market is insanely overvalued with the total stock market capitalization relative to GDP far into record territory (see chart below).
When This Bubble Bursts There Will Be Hell To Pay
Kevin Smith: Gross domestic product is a nominal measure of the total economy and is taking off today because of inflation, not real GDP growth. The latter may soon be approaching negative territory leading to a stagflationary recession.
Increases in the general price level of goods and services can squeeze profit margins, destroy savings, contract record P/E multiples, and trigger rising inflation expectations that escalate into a long-term wage-price spiral.
The need to concentrate on the narrow group of value-oriented investments on the long side of the markets today in our opinion is more imperative than ever. In our opinion, smart money should be taking advantage of the recent pullback in the precious metals and commodity markets on the likely unfounded concerns over the Fed’s taper.
Buying into a natural-resources focused portfolio that is early in the growth cycle with tremendous value opportunity ahead and that offers capital protection from monetary dilution seems wise to say the least.
***To listen to James Turk discuss Friday’s big 4+% rally in the mining stocks along with the surge in gold and silver as well as what to expect next CLICK HERE OR ON THE IMAGE BELOW.
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