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Post by unlawflcombatnt on Nov 24, 2008 10:23:11 GMT -6
All Precious Metals have skyrocketed in price over the last 2 days. The price of Silver is up +17%, while Gold, Platinum, and Palladium are all up 10%. The Dow Jones is also up a similar amount. Meanwhile, the yield on the 3-month Treasury has been -0.01% for 2 days. The 10-year has jumped back up to a yield of 3.29% today, from a low of 2.99% Friday.
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Post by jeffolie on Nov 24, 2008 17:32:22 GMT -6
I have read lots of buzz in commentaries by precious metal advocates. But, they are always promoting the metals in up markets and down markets. In my predictions, the dollar will shrink and the metals expand because of the Big Obama Bailout. And as I posted today, there are new commentaries in Bloomberg and others that acknowledge this possible outcome. Even though I have expressed my optimism for the metals, today's precious metals price increases is merely one datapoint and does not make the long term daily and weekly charts look better.
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Post by unlawflcombatnt on Nov 24, 2008 17:45:06 GMT -6
Here's a 1-month view comparing Gold, Silver, the S & P (GPSC), and a Treasury Bond fund (TRUSX) Here's a 3-month chart Here's a 5-month chart Here's a 7-month chart I think these are enough data points to draw some generalizations. Treasuries have risen in value, while everything else has fallen. Gold has declined, but much less than other investments. Silver (along with platinum & palladium) have fallen almost in tandem with the S & P, at least over the last 7 months. I think that Treasuries will fall sometime in the future as well. But as of this writing, they've performed better than everything else.
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Post by jeffolie on Nov 24, 2008 20:24:05 GMT -6
Treasuries which are now yielding near zero are doing better than other asset classes. I expect this will be true through The Crisis in the Fall of 2009 but I am far from certain. At some point a substantial portion of the rich will move away from the dollar and treasuries. As long as the Treasuries seem as good as cash, Treasuries will be the safe haven for big money. When the dollar will lose it reputation is not clear to me but I expect it sometime in 2009. Panic in the markets drives the big money to Treasuries. It may seem counter intuitive, but a stable or rising market will take away the attraction of Treasuries. And of course, the flood of money and credit will tarnish the dollar's and Treasuries image.
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