Opportunities To Invest In Emerging Markets, Foreign Currencies and Gold

If you're an investor, it's an opportunity to invest more in emerging economies, in foreign currencies, in precious metals. Obviously the gold market is being suppressed a bit by the strength of the US Dollar but as the US Dollar surrenders those ill-gotten gains that is going to be particularly good for the gold market.

Related trading instruments:

• SPDR Gold Trust ETF (GLD)
• Market Vectors Gold Miners ETF (GDX)
• Newmont Mining (NEM)
• Barrick Gold (ABX)

Further reading:

The Next Bear Market

Inflation Is Going Dramatically Higher

US Dollar: A Bear Market Rally

Video: Ray Dalio @ Google Talks

Inflation Is Going Dramatically Higher

We are going to have rising inflation and a falling dollar that for political reasons the Fed will be unable to or unwilling to raise interest rates sufficiently to put out the inflationary fire and prop up the US dollar.

The Next Bear Market

US Dollar: A Bear Market Rally

The big story continues to be the bear market rally that has been going on in the US dollar the US Dollar Index today closed above 93 the low this year was just above 88 so we've risen about 5% so far in the US Dollar Index from the lows.

Is Gold Being Manipulated?

Federal Reserve: Shrinking The Balance Will Have Consequences

When Alan Greenspan took over the Federal Reserve in 1987, its balance sheet was at about $200 billion. A few years ago, it reached $4.5 trillion. Shrinking it will have consequences.

Related trading instruments: 

• 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)

Inflation: The Danger To Bondholders

How comfortable are bondholders going be when inflation is above 2 percent when they're barely earning 2 percent on their bonds now? 

I mean you're not even getting 3 percent on a 10-year Treasury right now, you're getting around 2.95.

Well, if inflation is above, let's say inflation is two and a half, well you're getting two and a half percent inflation if your yield is only 2.95 you're not even getting 50 basis points. But of course after taxes you're losing money because the Treasury bond yield is not tax-free. The federal government still taxes you on the money you earn on Treasuries, so after taxes if you're getting a two point nine five percent coupon if there's two and a half percent inflation you are losing money.

Federal Reserve: Willingness To Tolerate Higher Inflation

I want to talk about what happened with the Federal Reserve this week because I think that is the most significant news of the week. In fact, I think it's the Federal Reserve's statement on Wednesday and the comments from today that's the real reason we had the 300 plus point rally in the Dow Jones Industrials Average today that's why we had the 400 plus point turnaround in the Dow on Thursday. I think it's all about the Fed and its willingness to tolerate higher inflation.