Sector Performance: All That Glitters is Gold

This week we find Gold, Silver and other precious metals on top of both our technical analysis screens and our sector performance report.

These two headlines probably sum it up best as to why the dollar is setting new lows and gold new highs:

• Senate Must Raise Debt Ceiling above 12T

  U.S. consumers cut debt by record $21.6 billion in July

Having both of those headlines on the same day is just too rich. I profess I am not an Ivy League educated economist. I don’t even play one on TV, but I am fairly certain which one is doing the right thing. I hasten to say Joe Biden is wrong when he says you have to spend (in other words add to the debt) to get to prosperity.

Clearly the Chinese, Russians, Brazilians, the United Nations and even supermodels disagree and are freaked out by the dollar. They see our government printing money faster than Usain Bolt runs 100 meters.
We put the odds at 1-in-10 at best that Obama, Geithner, Bernanke and company are able to walk the razor’s edge by exploding the money supply and federal debt levels without ending up with high inflation and a much lower dollar. It’s like trying to stop a spinning quarter on its edge. Go ahead grab a quarter and flick it with your finger. Now try and stop it without knocking it over. Good luck.

A weak dollar is all well and good for paying off the debt load for pennies on the dollar. Just don’t plan on leaving the US or buying anything since we no longer produce much. That’s exactly why we advised our newsletter readers a few weeks ago to short the dollar and go long gold. Hopefully- they all listened. Make sure you sign up for our newsletter too.

Beyond Gold, Silver and Precious Metals, here are…

The Week’s Best Performing Sectors:

The Week’s Poorest Performing Sectors: