Bond Market: The Beginning Of A Huge Collapse

Just look at what happened to the long end of the curve after the election. This can be the beginning of a huge collapse in the bond market. (iShares Barclays 20+ Year Treasury Bond ETF (TLT), U.S. Treasuries, iShares iBoxx $ High Yid Corp Bond ETF (HYG))

Investors Should Be Selling The U.S. Dollar, Not Buying

People who are buying U.S. Dollars are doing the wrong thing, they should be doing the reverse. The U.S. Dollar is making 13 or 14 year highs, it is more than a decade high. I think the U.S. Dollar is in very dangerous territory up here. A lot of speculators maybe are being caught, maybe they are being stopped out of their trades, because again, more inflation is not good for the U.S. Dollar, the dollar will lose purchasing power.

The Bearish Gold Narrative Is False

What people are saying is that because we are going to have a higher inflation, the Federal Reserve is going to have to raise interest rates to fight that higher inflation and those higher interest rates will be bullish for the U.S. Dollar and a strong dollar is going to hurt gold prices. But even if we do get one or two interest rate hikes over the next several years, that will not be sufficient to restrain the inflationary forces that will be building in the economy.

So even if interest rates go up slightly, inflation will go up much more and so real interest rates in an inflationary environment will be falling and not rising and that is very negative for the U.S. Dollar and it is extremely positive for gold. (Barrick Gold (ABX), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), SPDR Gold Trust ETF (GLD), Newmont Mining (NEM), Goldcorp (GG), NovaGold (NG))