It's Sadie Hawkins' Day. Wanna dance?
Let's start with the two-step, or in the case of the G-20 Summit, the sidestep. Begin by moving the left foot out to the side, quickly joined by the right foot; feet together. The 20 Central Bankers traveled to Shanghai over the weekend to obtain assurances from the China Bank it would take no further action to devalue the yuan. The BOC responded with a declaration there was no such planned action, but if something happens, well, the yuan is tied to a basket of foreign currencies. Blame them. Sidestep complete. Pivot and repeat.
Monday saw Asian markets close lower than anytime during the past four weeks. Seems BOC lowered the required reserves in order to free up money in the banks for lending. Investors are still nervous and missed a step. The whole cotillion fell. The yuan fell again against the US dollar which fell against the Japanese yen, bringing stocks down at the opening bell while the German bond market stumbled.
As the expression goes, with all this manure, there must be a pony around here somewhere. There is. A Palomino. A Golden Palomino. As the other dancers lost the beat and fell down, that golden horse was stepping high. In overseas markets gold hit $1260 before settling at $1231, a brilliant 9.8% increase for February and 16% for the year so far, the biggest gain since January 2012.
There's another old saying, "Dance with the one that brung ya." Gold brought people through for over six thousand years. Gold buys the same things today, it bought back then. I wrote yesterday how the same amount of gold buys comparable houses 65 years apart. I have no doubt 65 years from now, gold will buy the same house again.
Now about that dance...how about a square dance?
Banking on debt has gotten old,
so hold your partner like she's gold.
Here we go, we're rollin' dough,
Swing around and dough-see-dough.
No comments:
Post a Comment