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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 371.65-1.1%Nov 17 4:00 PM EST
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From: THE ANT10/11/2006 10:11:49 PM
  Read Replies (6) of 217836
 
El mat.I still say interest rates are too high and commodities have further to fall(remember gold is not a normal commodity)I feel the Fed needed to pop the housing and commodity bubbles.The problem is that they may have trouble controlling the housing fall.USA housing is a garbage investment and now that the bubble has burst rates could go down another couple percent and housing still fall ,just as it did for years in Japan with near zero interest rates.Housing is also in a bubble in much of Europe and this will also fall.I see two possibilities from here:
(1)Least likely.A drop in interest rates keeps housing from falling too much now and over a 10 year period with inflation of 3-4% a year housing, after an initial fall of 10-20%,comes back in line with reality.The third world does well and picks up a lot of the slack as the US learns to become a saving nation again.The baton is passed
(2)Interest rates fall and housing in the US and Europe keep falling.At this point the US,Europe and Japan trash their currencies by 10% but do so in unison to be less noticeable.Only gold will show this by rising as the commodities are falling due to a slowing economy,they just fall 10% less than they otherwise would have.Third world countries like Brazil will gain 10% in their currencies but this may again be hidden within their normal fluctuations.This will give US housing a 10% freebee but then the slow loss relative to inflation will continue for years.
In either scenario the Brasil stock market kicks butt as their rates fall.In the second scenario I feel Brasil stocks could even fall by 20% short term making them an even better deal for the medium term.In either scenario klaser and elmat drink chopp on the beaches of Brasil ,and watch the pretty girls, with a smile as big as TobagoJacks
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