Friday, February 26, 2016

Stocks and Gold can move higher together

The monetary authorities in the US, in Europe, in Japan, in China et al have no choice but to expand the supply of reserves aggressively and materially rather than continue the destabilizing and very public decision to allow short term and even medium term interest rates to move into negative number.

We fear that perhaps we are about to see a period of time when the monetary authorities throw caution to the inflationary wind, expand the supply of reserves to the banking systems around the world in a fashion that really can only be considered egregious with caution tossed to the winds. That is, we may be in for a period of time when gold and equities move in tandem together to the upside.