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Should Gold Bugs Hope for a Hike?
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The housing quagmire aside, one of our regular correspondents believes the Fed is about to tighten. “The price of gold gapped up to 705 [yesterday], and now Bernanke is taking notice,” writes Erich Simon, whose bird flu reports appear regularly in the Rick’s Picks subscriber pages. “The stage is being set for a rate hike and a time, I hope, when, in response to the rate-hike, the metals sell down, allowing side-lined money to add to physical positions.
“Bernanke is going to hike to protect the dollar, the status quo, the old money, wealth holders, the bond markets, the larger credit markets... really nothing short of the present and future existence of Western Capitalism, brought to the forefront by Greenspan's flawed, 'new era' productivity paradigm, now exposed as a classic credit fueled boom and coming bust.
Gross an Alarmist?
“Meanwhile, the ten-year note is cratering at 4.49%, in response to (housing) deflation and a flight to safety in the unfolding global Depression... transitioning into the Pandemic model. But the flight to safety is most punctuated at this time by the threat of a looming threat/shock to this very system of Western Capitalism. There is consensus today of a large, up and coming default buried somewhere in the system. More alarming though, bondman Bill Gross recently stepped outside the box of sanity and proffered a blanket bail-out for the mortgage market.
“The sole reason for such drastic and half-baked prescription, coming from a liquidity vigilante no less, is that Western Capitalism is broken and salvage in some form is the order of the day. Like children playing a board game that has disintegrated into cheating, arbitrary game piece movements and the indecipherable chaos of broken bank which has now reached the point where the players are trashing the field of play and getting up to leave in pursuit of something more worthwhile.”
Rick Ackerman
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company.
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All Contents © 2008, Rick Ackerman. All Rights Reserved. www.rickackerman.com
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