Gold showing signs of disinflation – early deflation
Carolyn Plaza
May 18, 2007

The gold market in recent days has stayed flat in spite of lower dollar and stable interest rates. The liquidity that has driven stock market all around the world to unprecedented levels is also working for gold. But gold and other precious metals may have silently topped out last year.

Interestingly, in terms of Euro gold is clearly in a bear market. As Euro challenges the old high, gold is going nowhere. The sudden downturn in the gold market raises serious questions on the inflation in the economy. Slight inflation in the economy is healthy.

But it seems early deflation and disinflations are playing their roles. The mortgage meltdown, the real estate collapse, the bubbles in stock market, private equity, and mergers and acquisitions are the root cause of disinflation or early deflation.

Deflation is dangerous. It can cause serious trouble in the economy. In the last deflation, the stock market collapsed 88%. In Japan, mild deflation through the last twenty years has produced havoc.

Stocks are technically weak but private equity funds keep buying them at any cost – the frenzy feeds itself
Sam Adelton
Private equity funds and hedge funds keep buying the stock market at any cost. They are flushed with money. The rising market has created the crazy frenzy to buy and hold to show better performance.
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Copper says its recession in the happening
Peter Oberois
If copper falls another 20%, there is more than 80% chance of major global recession. In the past seven major global downturn, copper prices dramatically twelve to sixteen months before the recession.
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Gold showing signs of disinflation – early deflation
Carolyn Plaza
The mortgage meltdown, the real estate collapse, the bubbles in stock market, private equity, and mergers and acquisitions are the root cause of disinflation or early deflation.
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Stock market ready crash downwards 1987 style – a catastrophe in hedge funds and private equity in the happening
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Smart investors in 1987 bought way off the money puts for no little price before the crash. The same time may have come again.
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Consumer driven deflation and Hunt Brother syndrome – the stock market bubble is worse than that of the real estate
Rob Molta
The stock market bubble is far worse than the real estate bubble. The Fed called the real estate bubble as regional froths. Perhaps they will the stock market bubble as localized anomalies! The stock market bubble is worse than that of the real estate.
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Why stock market showing greatest ever divergences between indices?
Samuel Johnson
It may take some time before these few so called newly recognized rich are fully invested. But when they do, the bear market will be spectacular – ten times more severe than 1929-33 debacle.
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Start pf global interest rate reversals – Aussies take the lead with wages growth unexpectedly slowing
Jenny Jones
Australian wages growth unexpectedly slowed in the first quarter. Australian rates will be lowered in the second half of the year. In spite of heavy rate increase by the Federal Reserve, the dollar is sensing lower rates in the future.
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