The money-printing hand writing is on the wall, says Justice Litle. A severe inflation threat is on the horizon. But the bond market is still pricing in a bout of deflation. And that makes Treasury Inflation Protected Securities (TIPS) an amazing deal right now.
At the moment, money is being sucked out of the financial system, bringing the threat of deflation. But for James Howard Kunstler, the only question is when the new money being pumped in by the Fed will exceed the amount that has disappeared. James says we could see serious inflation – and a slump in the US dollar – before the end of 2009.
Gold prices are up slightly again today, to $840 an ounce. The yellow metal has jumped sharply from $750 just weeks ago. Andrew Snyder says a declining dollar and inflation fears will likely propel gold dramatically higher next year. He recommends three ways to profit from this spike.
The Fed and Treasury are doing untold damage to the US economy and the dollar with their unprecedented bailout spending, says Martin Hutchinson. That’s why there will soon be a stampede to the exits from the Treasury bond market. Martin gives four ways for investors to prepare for the coming crash.
The Fed’s drastic rescue measures for the economy are sure to keep the US dollar in the doldrums, says Martin Hutchinson. Foreign governments – which have long supported the greenback – are slowly diversifying their holdings. Martin says investors should play this long-term trend by buying hard assets and international stocks.
Gold demand increased by 45% from the second quarter to the third. So why are gold prices falling? Mike Caggeso says frantic de-leveraging by hedge funds outweighed record retail demand for the precious metal. But he says the inflationary impact of the government’s bailout bonanza will be the catalyst for soaring gold prices in 2009.
Official U.S. consumer prices dropped by a record 1% in October as sellers hacked away at the prices of fuel, cars and clothing to lure in depressed customers. But the numbers don’t add up quite the way Washington and Wall Street would like, according to Adam Lass at Taipan Publishing.
After record declines in October’s producer and consumer price indexes, deflation is today’s buzzword. But Bill Bonner says the explosion of assets on the Fed’s balance sheet will create serious monetary inflation problems further down the line.
Forget talk of a slump in gold, says Justice Litle. The precious metal is still on a long-term uptrend that started in 2001. And the “reflate at all costs” strategy of the Fed will eventually send gold soaring again as the world wakes up awash with dollars that it doesn’t want.
From Reuters we get the headline “The Banks Are Cheating Us”, with the subhead “Hong Kong investors protest Lehman Brothers losses”, which made me laugh, “Hahahaha!” and think, “Welcome to the real world, Hong Kong chumps!”
