Titan Capital Joins Black Swan's Taleb in Raising Bets on Crash

The Final Pillar of the Gold price at $1650 is US government long bonds

Jim

Jim,

In US dollar terms, yes, the US government long bond market is the final pillar to fall.

Five Golden Pillars:


All charts have been updated through August 2010.

Long-Term U.S. Government Bonds Total Return Index (LTGBTRI):


In a multi-dimensional world, where capital flows recognize the effects of currency devaluation, the US long bond market has already generated a recognizable top in constant currency terms - gold. The long-term U.S. Government Bond Total Return Index to Gold ratio recognized a top in 2002.

Long-Term U.S. Government Bonds Total Return Index (LTGBTRI) to Gold Ratio:


Capital (flows), unlike headline analysis, is neither blind nor stupid. The higher order deceleration in the bond market's secular trend is mirrored by higher order acceleration in the gold market's secular trend. This is market by the red and blue parabolic curves above and below.

Gold, London P.M. Fixed:


The breakout in the gold stocks suggests that it is happening here and now.

S&P Gold (Formerly Precious Metals Mining)*
*S&P Gold from 1945, Barron's Gold Stock Index from 1939-1945, 1922-1939 Homestake Mining:


Stick your head in the sand if you like. I only suggest that if you do, you might not like what you see when you pull it out.

Regards,

Eric

Nassim Nicholas Taleb, whose book “The Black Swan” is about how unforeseen events can roil markets, said Aug. 11 he is “betting on the collapse of government bonds” and that investors should avoid stocks. Government bonds around the world have rallied on growing signs the global economic recovery is faltering, driving yields on two-year Treasury notes as well as German 30-year and 10-year bonds to record lows last week.

Source: bloomberg.com