'Ouro em um ano some na Terra'.
In the aftermath of last week's historic Swiss move, today the Godfather of newsletter writers, 90-year old Richard Russell, warned investors that within a year all available physical gold will be swept off the market. Currently stocks are trading in an environment of massive liquidity and bonds are operating alongside manufactured zero rates.
Currently investors are driving themselves crazy looking for a safe place to make money. Some are buying treasury bonds on the thesis that interest rates will continue to head down and that bond prices will rise. Other investors are buying the US dollar on the thesis that the US is the only bullish economy in the world. Europe is near recession. Japan is seeing deflation again and Russia is a basket case. The US remains the only light at the end of the tunnel. In this time of massive liquidity, I see the world’s stock markets as comparable to a powder keg. The wick is lit and no one knows when the whole pile will ignite.
