Wednesday, August 04, 2010

Market comments for Aug. 4th

Lots of commentary this morning on CNBC by a guest economist, David Gerstenhager, President of Argonaut Capital Management, who says the real threat to the economy is deflation, not inflation and that it is already here in the Housing Sector and the Auto Sector. He was joined by another Chief Economist and former Consultant to the Treasury. They both said the best investment is 10 year Treasuries and that 30 year Treasuries are even better. He sees deflation affecting Corporate earnings negatively, as well. That was an interesting long term view and especially on the super positive cable channel, CNBC, which tends to hype up the market. I agree and have been saying that Deflation is the problem and has been for a while.

Today's chart is on the Dow Gold Ratio from Chart of the Day with my own modifications based upon Monday's close. As you can see the Dow/Gold ratio is 9.0 currently and it continues to go down as the trend shows.

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