But first, Fitzpatrick
warned in his repoprt: “It seems that in this ‘brave new
world’ the goalposts for failure/success have been sharply shifted. Failure is
recession/depression, deflation, default, wealth destruction, social
strife/conflict and possibly worse. Success now seems to revolve around a
dynamic familiar to people who were around in the 1970’s…STAGFLATION looks set
to be a our ‘new normal’ (If we are lucky) in the years ahead.”
Here is
what top Citi analyst Fitzpatrick said in his latest report, along with powerful
charts: “We are constantly told that ‘Gold is a useless yellow metal’
with no real monetary value yet history belies this. For over a decade it goes
higher and higher and we hear the crescendo of cries that it is unsustainable
and a bubble. (There was no such crescendo about the equity markets in 2000 and
again in 2007-Nasdaq in particular, or the Nikkei in 1990).
When the Oil price went from $10 to $147 it was
explained away by peak Oil theory. The housing market was ‘not a bubble’ and we
had never had a national decline in prices (Never say never). All of the above
ended up being bubbles that burst as people participated in those trends with
leverage and sent most of these markets up in multiples far greater than we have
seen with Gold.
History also shows that markets rarely ‘implode’ when
everybody is looking for it. All the way up, every new $100 bounce raises the
cries of ‘bubble’ again. We believe this move is far from over and still expect
Gold to be an outperforming asset for some years to come..."
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