I have no signal for SLV but I am short the February gold from 1859.00 which is not far above the market right now...
Of all the inflation indicators, I find the velocity of the dollar to be the best...
Inflation means the speed of the dollar is accelerating, so the velocity of the dollar measures exactly that...
Velocity of the dollar is a ratio of nominal GDP to a measure of the money supply (M1 or M2)...
It can be thought of as the rate of turnover in the money supply, e.g., the number of times one dollar is used to purchase final goods and services included in GDP...
So, the velocity of money is the rate at which people spend cash... think of it as how hard each dollar works to increase economic output... when the velocity of money is high, it means each dollar is moving fast to purchase goods and services, it reflects high demand which generates more production... therefore, inflation since more demand means prices rise so you can buy less for the same amount of dollars...
When the velocity is low, each dollar is not being used very often to buy things... instead, it's used for investments and savings, this low demand doesn't generate as much production...
Right now, the velocity of the dollar is rather slow, so there's really no inflation, at least according to the so called experts...
Here's a graph of the velocity of M2, you can see how low it is... this is why the FED has been keeping rates low, there's no credible reason to raise rates despite the bonds moving lower, but I think the bonds have been moving lower because bond holders have been selling them to buy stocks...
This could change...
Meanwhile, to your question, this is why I'm short gold right now and have no buy signal for silver or SLV...
I hope this was somewhat helpful...
GZ |
