In search of intrinsic value

Guido Romero Rank: 107 Followers: 3 Votes: 1 Years Member: 7 Last Update: 14 December 2014, 10:43 Categories: Relative Performance Charts
Gold / Gold Stocks
Currencies

Dec 9/14 - Gold is attempting to break out in all major currencies. Conversely, this may presage a retracement in the US$. The nature of the retrace should give us clues as to whether the US$ breakout is real and sustained thus heralding the onset of global asset deflation. If this is indeed the case, then the new juncture should, amongst other things, benefit anything US$ like treasuries. On a relative basis, global asset deflation should also benefit the US markets like the S&P.

Dec 6/14 - Not much to say this week other than some interesting movements on currencies that do not seem capable of mustering even a bounce. Canadian and Australian $ have taken a shellacking.

Nov 29/14 - Although crude prices were fundamentally going lower anyway, the fact they should have crashed at this particular junction is nasty and dangerous for the wellbeing of humanity. The hedges and derivatives that are blowing up all over the place coupled with the diminished revenue which effectively dissipates the ability of Arab sovereigns to subdue unrest in their kingdoms, along with the hundred of Billions of $ that have been invested by the majors in shale oil research, are a dangerous brew. Add the Swiss referendum tomorrow and if it should turn out to be a 'yes' vote, it is 'Katy bar the door' for all of us. If the Swiss vote 'yes' tomorrow, along with the new French request coming on top of the recent successful gold repatriation by the Dutch and the outstanding request by the Germans, we've got us a big 'oh-oh!' moment coming. A % of your net worth should most definitely be in hard assets within your reach.

Nov 27/14 - Currencies appear to be setting up for a bounce as the US$ looks toppy. GLD/FXE has regained and held a short term uptrend which is good. We are still on the cusp of something happening but I can't yet put my finger on it. Precious metal shares appear to be bottoming but more down side is not precluded. I still hold bullion and bullion ETFs and have put on a small hedge on mining shares.

Nov

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100 - $SPX since 1980

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Dec 3/14 - The US$ has recently broken out of a long basing pattern. I am going out on a limb here to say that this is, in my opinion, the beginning of a tectonic shift that is heralding asset price deflation. If this should indeed be the case, this 700 points formation is looking ever more probable...
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101 - US$ purchasing power versus CPI

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Dec 2014 - The recent US$ breakout that I've been tracking since 2010 is a powerful signal. If this change is confirmed by the price taking out the 95 - 100 level convincingly, this would indicate a significant change in the financial landscape of the past twelve years. Most importantly however, my opinion is that this is the manifestation of global asset price devaluation. If I am correct in my assessment, this would imply that going forward a lot of money is going to leave some highly leveraged positions notably in emerging markets. Too, if the change we are currently witnessing should develop at the same speed, a lot of hedges and derivative positions are going to generate significant losses for sovereigns, sovereign funds, investment funds and pension funds. Adapting to this new reality for large investors is going to be fraught with traps and dangers of all sorts, just at a time when we are witnessing unprecedented economic, financial and monetary conditions...
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105 - 30years US Treasury Bond since 1980

110 - $SPX, the 30yr US TBond and the US Dollar since 1980

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Dec 3/14 - This is an important break out. It may very well herald a period of asset price deflation in which case the major indexes may not fare as well going forward...
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Apr 15/14 - The reason I think the US$ is on the rise is not due to a belief of economic or financial strength in the USA. Rather, the Dollar is headed higher simply because the currencies of member countries that have adopted the US$ as reserve currency (Floating Exchange Rate Mechanism) must arithmetically suffer from aberrant US$ monetary policy...
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120 - $SPX and gold since 1980

125 - Gold since 1980

126 - Gold bullion inflated by the purchasing power of the US$

127 - Mining shares investment sentiment

130 - $SPX valued in terms of gold bullion

135 - The 30yr US Treasury Bond valued in terms of gold bullion

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