Gold will call out the financial engineers on their grand experiment.
http://www.jsmineset.com/2013/02/05/golds-rise-in-price-cannot-be-stopped/
meanwhile Bill Gross keeps mentioning gold:
Summary
1) Why is our credit market running out
of heat or fuel?
a) As
it expands at a rate of trillions per year, real growth in the economy has
failed to respond. More credit goes to pay interest than future investment.
b)
Zero-based interest rates, which are the result of QE and credit creation, have
negative as well as positive effects. Historic business models may be
negatively affected and investment spending may be dampened.
c) Look to the Japanese historical
example.
2) What options should an investor
consider?
a)
Seek inflation protection in credit market assets/ shorten durations.
b)
Increase real assets/commodities/stable cash flow equities at the margin.
c)
Accept lower future returns in portfolio planning.
and Kyle says:
http://kylebassblog.blogspot.com.au/2013/02/why-inflation-could-eat-into-stock.html
Bass suggests that investors "own productive assets," such as apartment complexes, oil wells, or global businesses that sell products in different currency areas.
"If you really want to protect yourself, you put long-term fixed rate debt on these businesses," he said.
People continue to scramble for yield," he said, "the U.S. rate curve is still basically flat and low. The Fed is actually doing the best job it can do, but it's also enabling the fiscal profligacy of Congress."
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