Whack-A-Mole: Dollar, Interest Rates, Equities, Gold in 2017?
US major equity indices are near all time high.
The US Dollar Index broke through the psychological 100 level, reaching a decade high as investors chased rising yields and subscribed to the prospect of an improving US economy (“Make America great again!”)
President-elect Trump had a pitch for everyone. Such euphoria reminded me much of 1999, where all tides were rising in the face of rising interest rates.
Weakness can already be seen in the utilities and housing sectors. If consumer spending slows due to rising yields or if Trump is unable to push through ambitious fiscal policies, we could see a quick reversal and downward spiral in yield, equities, copper, and the US dollar.
Instead of shorting the surging US dollar, I am buying gold and silver, which are contrarian plays to the US dollar.
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John Lee, CFA is an accredited investor with over 2 decades of investing experience in metals and mining equities. Mr. Lee is the Chairman of Prophecy Development Corp ). John Lee is a Rice University graduate with degrees in economics and engineering.
John Lee, CFA