LIVE Gold Prices $  | E-Mail Subscriptions | Update GoldSeek | GoldSeek Radio 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page 

 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

Gold Mid-Tiers’ Q4’18 Fundamentals
By: Adam Hamilton, Zeal Research

Self-Destruction: Cheerleading the Process
By: Gary Christenson, Deviant Investor

The U.S. Economy Is In Big Trouble
By: Dave Kranzler

Gold Resource Corporation Mirador Mine Development Crosscuts 6 Meters of 992 Grams Per Tonne Silver
By: Gold Resource Corp.

Central Banks Are Messing With Your Head
By: Thorsten Polleit

A Permabear Talks Lollipops and Roses
By: Rick Ackerman, Rick's Picks

Gold …Some Confirmations to Watch For
By: Rambus

On The Hot Seat
By: Ted Butler

Precious Metals Update Video: Gold is not overbought
By: Ira Epstein

GoldSeek Radio Nugget: Charles Nenner
By: Chris Waltzek, GoldSeek Radio

 
Search

GoldSeek Web

 
Warning: the Smart Money and the Smartest Money Both Smell Inflation


 -- Published: Thursday, 11 January 2018 | Print  | Disqus 

By Graham Summers

If you want to make money investing, you first need to understand the structure of the asset classes in our current financial system.

Everyone likes to go bonkers over stocks, but the reality is that the stock market is in fact one of the smallest and least liquid markets on the planet. All told, US stocks are roughly $26 trillion in market cap.

By way of contrast, the US debt markets (Treasuries, corporate, municipal, local, etc.) is well north of $60 trillion.

And the currency markets (which cannot be accurately measured because every trade involves a currency pair) trades over $5 trillion per day.

Put simply, currencies are the “smartest” money, followed by bonds, and then finally stocks. So when a seismic change takes place, currencies and bonds pick up on it LONG before stocks do.

With that in mind consider that the $USD is collapsing, having gone almost straight down for 12 months.

http://www.goldseek.com/news/2018/1-11gs/1.png

Now consider that the US Treasury bond market, is falling in price, resulting in yields spiking above their 20-year downtrend.

http://www.goldseek.com/news/2018/1-11gs/2.png

BOTH of these assets are forecasting the same thing: INFLATION.

Inflation forces the $USD DOWN and bond yields UP.

So we've got both the "smart" money and the SMARTEST money forecasting the same thing.

And it's going to blow up the Everything Bubble.

All of the debt that has been added to the system since 2008 was done so at ridiculous risk valuations courtesy of the Fed intentionally creating a bubble in bonds.

Put another way, the Fed chose to deal with the 2008 crisis by creating a bubble in US Treasuries: the most senior asset class in the US financial system.

However, these bonds trade on inflation.

When inflation rises, so do bond yields.

When bond yields rise, bond prices fall.

When bond prices fall, the Everything Bubble bursts.

Best Regards

Graham Summers

Chief Market Strategist

Phoenix Capital Research

 


| Digg This Article
 -- Published: Thursday, 11 January 2018 | E-Mail  | Print  | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2019



GoldSeek.com Supports Kiva.org

© GoldSeek.com, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer


Map

The views contained here may not represent the views of GoldSeek.com, Gold Seek LLC, its affiliates or advertisers. GoldSeek.com, Gold Seek LLC makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, Gold Seek LLC, is strictly prohibited. In no event shall GoldSeek.com, Gold Seek LLC or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.