Monday, December 21, 2009
According to the Chinese Zodiac, the Year of 2010 is the Year of the Tiger. I see two things occurring:
1. The correlation of equity markets and the bond market will break. When equities fall, bonds will not be bought as flight to safety trade.
2. Gold stocks will, for the first time in 9 years, trade with the metal on the upside and less so with the overall market.
Call me crazy, but I am not sure we want to see upside economic growth (relative growth vs. expectations on global basis) here in the US. Excess money floating around coupled with real demand overseas will spike the prices of the things we need and rely on (energy, food, and interest rates). Add those to the structurally high unemployment and the deficits we currently face both of which resulting in the goods we own (dollars, houses, and cars) continuing to depreciate. Not something to cheer for.