Thursday, April 06, 2006

Gold at $600

New York gold hits $600, and bonds are beginning to fall. (Reuters) Aren't we getting into a Fed Catch 22 here?


[Thanks to www.bsu.edu/web/jkmorrison/plans6.html for the image]

If they don't raise rates once more after the next one, the dollar will speed up its crash and gold will skyrocket. If they do, they risk pushing the housing market over the edge and scaring the equities markets, likewise pushing the dollar down.

The situation is coming to a head. I know I shouldn't speculate, but I believe all the symptoms are out there.

One thing is for sure: It's going to be a very interesting year, perhaps dragging on into election time, when the Democrats may take over, and then what? I don't think even they know themselves.

I personally believe this summer will be very golden.

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