Here comes the big one. Analysts are choosing sides as if this is a financial war. We need it to keep the economy on track. We do not because it would be too much. It is helping and working. It is a sugar high. But enough of all this noise, all that matters is Bernanke's policy.
Bernanke has not shied away from the fact that he thinks that creating dollars creates demand. He has proved this because prices are up. But he wants to keep his recovery on track. He does not want it derailed. He will continue to monetize the debt, because he has no other option.
Rates can not go up, but equity must stay high for pensions to create growth. If he monetizes the debt, rates will stay low and he will debase the dollar. When the dollar loses purchasing power, equity increases because it takes more dollars to buy into the casino operation. The fiat ponzi will continue as long as possible and QE is the only way.
Mr. Lennon, two questions for you, if you don't mind:
ReplyDelete1. How and when the FED will announce QE3?
2. Your opinion on metals been hammered today and your projection until the end of June?
Thank you Lennon-Hendrix...
Hi all,
ReplyDeleteI was wondering if anybody has any thoughts on buying physical platinum as an investment and how it may perform compared to gold in a 1-2 year term from now.
thank you,
Jack
Platinum?, well, I don't know....in a deflation scenario I think Gold should be the only metal gaining. In a inflation everything goes up...but, in the particular current USA scenario Gold and Silver should go much stronger than Platinum or Palladium because of the very high debt....don't know though...let Mr. Hendrix gave us his opinion.
ReplyDeleteCampagnolo-
ReplyDeleteIt is hard to say when, but at least a week before June 30th, which is when QE2 expires. The drums have been banging loudly for a week now and everyone is getting their chances to voice their opinions. One thing I have considered is does Bernanke need an excuse; does he need something to break down? He did not when he instituted QE Light and QE2, and so I think his line will be that the recovery needs to stay on track.
For Platinum, my favorite thing about it is it is overlooked as an investment, and it meets the four definitions of monie as gold and silver do. I think that platinum is not as undervalued as silver, but at least as much as gold. Gold has the burden of Central Banks now, and the question we must ask is what if Central Banks began to vault platinum? I do consider that the main industrial use of platinum is the car industry, and the car industry is floundering. That may keep a lid on the price in the short term.
Platinum has peaked in production, like gold, so any move to corner the market could send the price skying. Also, the amount of platinum produced every year is very small, much smaller than silver and gold.
PS
ReplyDeleteI need to clarify what constitutes a crisis: the Fed and Treasury saying there is no recovery. I mean the Dow tanking below 11k. The data is and has been horrible this whole "recovery". Wee are in a depression. But I do not think Bernanke will admit this, I think he will merely postulate that we need to keep the "recovery" on track.
Hi there,
ReplyDeleteJust a followup to platinum, if I may steal some more of your time and opinion. I picked up some platinum and gold bullion and was thinking to trade in the platinum for gold and sit on gold for the next 1-2 years. Do you see that gold may outperform platinum over that period? I know with everything going on, that is a tough call, but your thoughts would be greatly appreciated. Also, in your opinion, do you see either platinum or gold going down in price over next 1-2 years?
Thanks again,
Jack
I think the best thing to do is to stay diversified. I think 50/40/10 gold silver platinum is perfect. You never know, maybe platinum will lead in the long run. Its production has already peaked (gold's has too, but silver's has not) and it is the smallest market of the three. If its market got cornered, it could out pace the other two. Gold's market will not get cornered because so much lies in bank vaults. Silver is more susceptible, which is why I like silver, but once again, platinum is the smaller market.
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