Edel Man, ich glaube auch nicht das Gold unter 600 faellt .
Moeglich ist jedoch kurzfristig alles im Moment......
The Inflation Boogey Monster
The Daily Reckoning - Weekend Edition
May 20-21, 2006
Baltimore, Maryland
by Dan Denning
MARKET REVIEW: THE INFLATION BOOGEY MONSTER
Stocks and bonds all over the world fell last week on the grim inflation
news coming out of the American economy. Let us cut to the proverbial
chase: Will inflation fears snuff out the rally in resource and energy
stocks even as underlying resource and energy prices soar? Let's pile this
question on, to Will commodity inflation smother returns in emerging
markets and again favor U.S. assets?
No stock - even a commodity stock - is immune from the inflation boogey
monster. But it's not time to sell everything. The Dow and the S&P have
been on a nice run. For its part, the Dow wasn't able to make a new high,
and its failure to do so, coupled with the fear that the Federal Reserve
will continue raising rates to fight inflation, put investors in selling
mood. Yet none of the underlying bullish conditions in the energy and
resource sector have suddenly evaporated.
What Wall Street is now wondering is if persistently (and record) high
resource prices will begin to slow down production and overall economic
growth. Are things heating up so fast that both producers and consumers
will have to cut back and retract? That's what the market is trying to
figure out and discount at the moment.
My biggest concern is that resource stocks are getting overheated,
especially precious metals and energy stocks. Sure, political risk has not
diminished, and may actually take energy prices higher. And yes, the
managed fall of the dollar could quickly turn into a debacle. But it's
also possible we're seeing a short-term blowoff in this commodity rally
that will take gold near $1,000 and oil near $100 before losing momentum.
What do I mean?
A lot of money is chasing after commodities and commodity stocks right
now. I wouldn't call it a bubble. But the constant mention of price
targets for gold and oil is starting to become a self-fulfilling
phenomenon. It might not seem like it, because the fundamental drivers of
the precious metals and energy bull markets are still there. The dollar is
backed by mountains of debt and oil demand is growing faster than oil
supply. Those trends haven't changed.
But when everyone is on the bullish side of the oil and gold trade, the
trade has run its course. Notice I said "the trade." The trend is still on
the side of oil and gold. But the smart speculative money right now is
looking at out-of-the-money put options on gold stocks.
Once gold busted out over $500, it's been nothing but new multidecade
highs. I know gold is making up for lost time with its latest run. But
even gold bulls shouldn't expect more of the same without correction or
interruption.
It wouldn't surprise me to see gold correct back down to around $550 by
the end of the summer.
This would come in the context of a deep sell-off
in bonds and stocks as well. How could that be, you may be wondering?
Wouldn't gold go up on inflation fears? Wouldn't gold go up on DE-flation
fears?
If and when global liquidity begins to tighten in earnest, it will be bad
for all asset classes. Gold will do relatively better. But from its
current perch, it is not, relatively speaking, a screaming buy. Be
prepared for a dip. And if you haven't bought yet, that will be your
chance to make amends. ![]()
Regards,
Dan Denning
for The Daily Reckoning