In this week’s “Portfolio Watch”, we’ll provide a currency update. Every day that passes we are seeing changes in this area. Given the rest of the news and the tendency of the mainstream media to report with bias, many of these changes have gone largely unreported and consequently unnoticed.
Last week in the markets was the polar opposite of the prior week. All markets, with the exception of the US Dollar and the US Treasury long bond, were higher. JP Morgan Chase agreed to pay $920 million to settle civil and criminal charges after Federal agencies alleged the firm made fake trades in the precious metals markets. And China has declared a policy of reducing her dollar investments in US Treasury bonds and is selling her dollars to buy commodities.
With the exception of the US Dollar Index, all markets were ugly last week. Silver led the way as far as declines went, falling a whopping 14.32%. As we have warned, when markets rise parabolically like silver did, a pullback is highly likely. We are now seeing that pullback.
As longer-term readers of this newsletter know, we have long advocated for a “Two-Bucket Approach to managing assets. Over the past few years, as we have been forecasting the events that are now occurring, other individuals and companies in our industry have begun to promote what they label a two-bucket approach to managing assets.
To a casual observer, the economic news is mixed. Depending on the story one is reading, you would conclude that we are in a severe recession, even a depression or, on the other hand, we are seeing a quick recovery from the economic fallout from the lockdown response to COVID-19.
The exodus from major cities continues.
While there is no fundamental justification for it, stocks rallied again last week and rallied strongly.
As we suggested last week, metals markets continued to consolidate after a big run-up.
By our technical measures, stocks are now once again in an uptrend.
Silver continued its monster breakout last week, rising 15.54%. All markets were higher with the exception of US Treasuries and the US Dollar Index which were mostly unchanged.