Wealth Daily's Weekend Edition
Saturday, June 23rd, 2012
We had a busy week on Wall Street.
The great Ben Bernanke told us things were bad — and getting worse.
Chinese manufacturing is slowing... Home
sales dipped in May... The people of Greece voted for the
austerity/pro-euro party... The debt crisis then moved on to Spain, who
is now paying more than 5% for 18-month paper (this despite the fact
that Spanish banks recently got a $100 billion euro bailout).
But the news isn't all bad.
The Fed chief told us he would continue the “Twist” for the rest of the year.
This is a card trick in which Ben sells
short-term debt and uses the proceeds to buy long-term debt in an
effort to push down mortgage rates.
It's working. Mortgage rates are at 3.63%, surely as cheap as I've ever seen them...
Though I do remember my grandfather once
telling me they were 2% during the Great Depression — only no one could
get a loan then.
Buffett Bullish
We wrote on Thursday
that Warren Buffett is buying up housing on value. And because Bernanke
did not invoke QE3, the market has sold dollar-denominated assets like
gold and oil... which in turn, as Brian Hicks tells, has China buying up all the cheap oil it can gets its hands on.
Your humble editor detailed (in full
below) how, if we used the money supply/gold price as an indicator, gold
would be at $8,500/ounce today.
You should be looking for entry points on this dip.
Here is your dollar/gold chart:
When the greenback goes up, gold (and oil) go down.
Will the dollar continue to rise as the euro falls... or will we get QE3 in August, which will drive the dollar down?
