- A contracting economy, which...
- Drives counter-cyclical gold higher vs. stock markets (and many other assets), and...
- By extension, sees a general decline in economic and market confidence.
- When an economic boom phase ends, yield curves bottom and start to steepen.
- Gold rises vs. commodities and materials, some of which represent mining costs.
- Gold rises vs. all major currencies, which is also a sign of declining systemic confidence.
- Inflation expectations can be constructive for gold and especially silver, which drives 'inflationist' bugs into gold stocks, but this is not fundamentally positive if the inflation is cyclical and drives commodities like energy and materials more than gold. This is when gold stocks rise against their proper fundamentals.
- Cyclical inflation, as in 2003-2008 can see the sector rise strongly (HUI was approximately +300% in that period) but the end will be bloody, as per the Q4 2008 sector clean out.
- China/India "love trade": Ha ha ha...when you see this in writing, run away from it.
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Gary Tanashian successfully owned and operated a progressive medical component manufacturing company for 21 years, through various economic cycles. This experience gave Gary an understanding of and appreciation for global macroeconomics as it relates to individual markets and sectors. Along the way, Gary developed an almost geek-like interest in technical analysis (TA), to add to a long-time interest in human psychology. Various unique macro market ratio indicators were also added to the mix, with the result being a financial market newsletter, Notes From the Rabbit Hole (NFTRH) that combines these attributes.
See the full archive of Gary Tanashian.
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