High, Higher …..

What’s happening in the markets?

Gold & Silver hit new highs not seen in the last 20+ years.

The stock market indices (Nasdaq, Dow) are at record levels, too.

The dollar’s up too, against other currencies, driven by interest rate hike expectations. More on the interest rates / bond yields here.

Now what’s happening? Classical investing theory considers gold and silver as inflation hedges; you’d expect that if these were going higher, currency should drop! The same again for stocks versus commodities. While not necessarily a zero-sum game, there is some kind of balance that’s seen; some win, others lose.

But the current news doesn’t seem to indicate that. Rather, everything’s up!

Irrational exuberance? A bubble? Or (more likely) - am I missing something?

Written by 2cworth on April 1st, 2006 with 1 comment.
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