COTW: 'Pet Rock' Wins Again

For the period 2001 to the present, the stock market (DJI) is up 69% from 16,000 to around 27,000 currently. Contrast that with gold which began at roughly $400 and is now $1400 for the same period, or 350%!  Gold is at a six year high. ($1413.4) Current belligerent behavior from the Very White House can only increase gold's market value. Some seers say gold's trend will take it to $3000 or even $5000 an once!

It does not hurt gold's case that the Duck has nominated a gold bug for the Fed Board either. Judy Sheldon is the executive director of the European Bank for Reconstruction and Development, and an advocate for return to a gold standard. Add to the mix the fact that Treasuries have a real rate below 1%, an inverted yield curve for an entire quarter*, and central banks are buying large amounts of gold, thus insuring a strong demand for the pet rock.

*considered a near infallible indicator of a coming recession. An inverted yield curve occurs when long term government bonds have a yield lower than short term government notes. This condition has correctly predicted economic downturns for the last 50 years.