Inflation

Today the market opens lower, then rallies strong. The mirror opposite of yesterday. I am tempted by some trades, but do not pull the trigger.

Gold makes an all time high. I continue to believe that it is early in the bull market for gold. Inflation hasn't even shown up yet. I hear some isolated reports about gasoline, college tuition, or healthcare or inflation numbers that factor in the huge increase in home prices over the past decade. Will these inflation figures now show deflation now that home prices are going down? I doubt it, that doesn't sell newsletters.

The Treasuries tell the tale of the inflation tape. Some will argue that this is being distorted by heavy foreign buying. That may be true to an extent, but a person can't buy bonds or options on these made up figures that people float on the Internet. A person can buy Treasuries, or sell them short. With the 30 year bond under 5%, I have a very hard time believing that inflation is running at 8% to 10%. No rational person would buy bonds if the real inflation rate was 10% and bonds are paying 4.5%.