Calm down Mish. I was merely stating my opinion.
I think all assets (stocks, bonds, real estate, copper, zinc, gold, silver, etc.) are hitting new highs due to one reason. Liquidity. If you have an alternate theory as to why all asset values are rising in sync, I would love to hear it.
An interest rate hike drains liquidity at the margin. While I believe deflation will result prior to hyperinflation, I also think inflation is out of control right now. The Fed can probably stop now at 4% and real estate would eventually fall apart and take everything down with it.
However, if your horizon is the next Fed meeting like I was discussing, I think any hint of a Fed ease will send all assets much higher. Higher stocks, lower bond yields, higher commodities. I doubt real estate gets another leg higher unless long rates really come down substantially.
By the way, I disagree that gold will do well in a deflation. When credit contraction begins, liquidity will be funneled to debt service and will not find it's way to gold. Gold is still 70% driven by jewelry demand. I think gold jewelry demand can easily fall 40% in the U.S. when the economy is in a deep recession. I highly doubt investment demand will offset the decline in jewelry demand particularly when gold miners are investing heavily in increasing production.
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