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Coins & bullion since 1973





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Discussion Topics -- October 19, 2010
QE2 & 'ForeclosureGate'

As bonds, stocks and commodities markets are all currently rising together on the expectations of endless money via the Fed's open promise of QE2, the key question is "Which of these is the more sustainable market?" The bond market could be in for a tumble if the Fed delivers less than the market is expecting, but in the meanwhile, investors with surplus cash are chasing yield along any available avenue. With bond yields near zero, however, that avenue offers no headroom to run and will therefore likely be the first point of abandonment by investors regardless of the magnitude of intervention by the Fed. As a result of that seemingly foregone conclusion, and in light of the weakened economy providing an unfavorable backdrop for stock investments, large and small investors alike are increasingly channeling their funds toward hard assets -- commodities. Gold is benefiting not only from this, but additionally from the global currency war pulling down the value of many international currencies. Among those currencies, the U.S. dollar in particular is vulnerable to the uncertain undercurrents and inevitable need for a federal resolution of the mortgage crisis and the foreclosure quagmire growing within the real estate markets. Featuring Pete Grant, Jonathan Kosares and George Cooper.

Figure 1
10-year Treasury yield

Figure 2 -- Cotton
cotton price

Figure 3
10-year Treasury volatility

Figure 4 -- Dollar Index
dollar index

Figure 5 -- Japanese Yen / U.S. Dollar
Japanese yen

Figure 6 -- Spot Gold
gold price


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Coins & bullion since 1973

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