The Stock Market is Overvalued

The stock market is already overvalued. Its a bubble! And just because we are going to have some tax cuts and regulatory relief, that does not undo that bubble! (SPDR S&P 500 Index ETF (SPY), SPDR Dow Jones Industrial Average ETF (DIA), iShares Russell 2000 Index ETF (IWM), Nasdaq 100 Index ETF (QQQ), Select Sector Financial Select Sector SPDR ETF (XLF))

Gold Will Rally in 2017

We are going to get more inflation but it is not a negative for gold, it is a positive for gold. And the markets were wrong about gold at the end of last year, they sold it off when the Fed raised interest rates,, gold bottomed out in January and then had a huge run. We are going to have another big run next year but next year gold is going to finish the year strong. (SPDR Gold Trust ETF (GLD), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG), NovaGold (NG))

Gold: Inflation Will Rise Much Faster Than Interest Rates

I like to see that negativity out there. Gold has gone down quite a bit since the election but if you go back over the last 15 years, gold had a pretty good track record.

It is interesting that the reason that so many people have turned bearish on gold is because they believe there will be more inflation under Donald Trump, that we are going to have larger deficits as a result of the tax cuts, increased government spending and because of the higher inflation, the Federal Reserve is going to get more aggressive and raise interest rates and somehow that increase in interest rates is going to be bad for gold. It is ridiculous! Higher inflation is good for gold!

Inflation will rise much faster than interest rates, so real interest rates are going to fall and that is when gold shines brightest. (Newmont Mining (NEM), Eldorado Gold Corp (USA)(NYSE:EGO), Goldcorp (GG), Market Vectors Gold Miners ETF (GDX), Market Vectors Junior Gold Miners ETF (GDXJ), SPDR Gold Trust ETF (GLD), Barrick Gold (ABX)