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blazespinnaker
11-09-06, 10:22 PM
We seemed to have hit an inflection point of sorts:

The 2yr/10yr spread in treasuries is now at 13bps, gold is jumping, the NAD (North American Dollar) is dropping.

Is this the start of something?

spunky
11-10-06, 02:25 AM
China is talking of diversifying its holdings. Yea, a continued bull market for commodities and seeing the valuation of mining stocks catching up to where they belong.

Finster
11-10-06, 08:24 AM
We seemed to have hit an inflection point of sorts:

The 2yr/10yr spread in treasuries is now at 13bps, gold is jumping, the NAD (North American Dollar) is dropping.

Is this the start of something?

Hard to tell, Blaze. My gut sense is that gold/bonar may be waking up from its nap. How much of that would be due to the numerator rising or the denominator falling (in real terms) is hard to say just yet, but my guess would be some of both. Some in the media have ascribed it to speculation the Chinese will be "diversifiying" their currency reserves, which would mean slower accumulation of dollars if not outright sales.

I still am keeping my Treasury exposure low in here as the yields are palty given the valuations of stocks and prospects for continued bonar depreciation. Though stocks as an asset class are still somewhat overvalued, the greater overvaluation in Treasuries by comparison is providing some tailwind. Despite its rhetoric, the Fed continues to be behind the curve, talking tough on inflation but acting as if coddling the housing market is what's really on its mind.