Market Update
- USD index down 10% and gold up 10%
- Euro is strenghening
- Dow trades over 22,000
- Oil flirts with $50
- US may take trade action on China
- US places sanctions on Russia
Weakening USD is Positive for Gold & Silver
US dollar index is back to 2015 levels. According to Ron Rosen of the Rosen Market Timing Newsletter. “The dollar has been falling lately, which is not what people expected with the Fed raising interest rates. Higher yields on dollar balances should attract capital to treasuries. This would normally put pressure on the dollar. Stocks might reasonably be expected to fall as dividend yields are less attractive to rising risk-free fixed income returns… Instead US equities are at record levels.” View article here.
The Age of Risk Aversion
Charles Hugh Smith discusses Dr. Ben Hunt’s take on risk aversion. The idea being that if there is no fear in the market people will take chances. When fear is at a high, people do not take any chances. Hunt makes the point that easy-money policies actually reduce incentives to take risks which has a crippling effect on the economy. One example is the Fed’s unwillingness to risk a recession that could cascade into something first. View article here.
