Gold stocks aren't even rising on short covering. They're rising on pure sentiment which is equivalent in this case to the booked orders away. No one wants to buy, but fewer want to sell! Adam Smith called this the invisible hand (of God).
We all know that FED will pump indirectly when they have no business doing so, whatever clowns like Bill Gross, Morningstar's Baby, would like to believe. Maybe the last thing to inflate will be gold after having gone into stocks in the late '90s, and RE since. The money has to be chased somewhere and that's where it went last time FED almost wrecked the financial system.
I mean, imagine Gross, a fixed income manager, calling for rate cuts even if there's inflationary consequences. And, he wants to do it to save the housing market, not the debt market associated with housing, but the price market. He wants to get house prices rising again! He claims that the core rate is too high to get this going, but a lower one would do it. What a nincompoop. He must think a proper rate of appreciation can be engineered.
I guess it tells you more about the competence of Morningstar's brownie point committee, who must have been inspired by the Nobel's committee's break through with Al Gore, than it tells you about the antics of a clown. |
