The REFLATION TRADE is over!
Welcome to THE STAGFLATION TRADE!
The bond collapse is sweeping the street today. And, everything is
going down big. It seems that no yield instrument is safe now. What
is a "fair yield?" 8% 9% 10% WHO KNOWS!
BUT BEST NOT TRY TO CATCH A FALLING KNIFE!
MY HUNCH IS THAT THE 10 YEAR BOND IS HEADING TO 7%.
I WILL NOT EVEN LOOK AT PUTTING NEW MONEY INTO THIS MARKET UNTIL THE
10 YEAR BOND IS AT OR ABOVE 7%, AND SOME STABILIZATION OCCURS.
I WILL BE SELLING ANY RALLIES UNTIL I'M 100% IN CASH!
I WILL HOLD GOLD AND OIL AND GAS, UNTIL THE PLUNGE STOPS.
Clearly, the Jobs Number was just OK, but the consequences are a sea
change in the markets.
GREENSPAN'S HYPER-LIQUIDITY EXPERIMENT IS COMING TO IT'S DISASTEROUS
END.
OIL AT $40! AND IT AIN'T OVER YET!
THE DESPERATE SELLING OF GOLD BY THE CENTRAL BANK SHILLS WILL
CONTINUE, AND I'LL BE BUYING IN THE XAU WHEN THE TIME COMES. NOT
NOW, NOT YET.
THE RE-FI BOOM IS OF COURSE OVER! AND A DEFLATION IN HOUSING WILL BE
THE BIG STORY FOR THIS SUMMER.
NET-NET I'LL BE ASKING MYSELF, WHAT WOULD BE THE BEST STAGFLATION
PLAY GOING INTO 2005?
Of course the geo-political situation has a life of it's own now.
AND I WOULD NOT RULE OUT A "1929 TYPE EVENT" SOMETIME THIS YEAR
PERHAPS AROUND AUGUST OR SEPTEMBER.
DOW 10,000 FOREVER? It could be!
But first we will revisit Dow 7000! And, perhaps even Dow 6000!
POOR LEADERSHIP AT THE FED AND IN KONGRESS AND THE WHITE HOUSE WILL
TAKE IT'S GRIM TOLL BEFORE THIS DISMAL YEAR IS OUT!
