All Posts Tagged With: "Kevin Rudd"

Maybe this will sound like a bunch of whining by the end of the week. After all, three of the big four Aussie banks will report results this week. There will be billion dollar cash profit figures tossed around. But as we said last week, the earnings performance of financial firms in the last six months is a sham.

Just to be clear though, the big trends now are soaring inflation and falling financial asset prices, along with increased energy scarcity. This produces a variety of pair trades, which include: short government bonds, long energy, short residential housing, long gold, and probably short commercial real estate and corporate bonds as well, while going long farmland and agriculture.

Speaking of gold, the U.S. gold price jumped up $14.10 to trade back over $900 again. It was the first time old yeller metal has traded there in three weeks. The World Gold Council reported that inflows of gold into exchange traded funds were 456 tonnes for the first quarter of the year. That compared to 321 tonnes for all of last year. ETF demand for gold is definitely one of the short-term drivers of the gold price…

Here we go again. Maybe this will be the week that historians look back on and say, “That’s when it all started to get better. Geithner came out with his toxic asset bailout plan. China stimulated. Stock markets bottomed. The crisis ended and the world got better and better forever and ever.”

And unfortunately, each idea leads us down the same path. It is the path towards rampant inflation. Many times in recent months I have written to Money Morning subscribers about the threat of inflation (you can read some of those thoughts in the essay below). Each time we write about it we think “That’s all there is to write about, policy makers couldn’t possibly make things worse.”