BOTTOMThus endeth another week of lack of fun here at EDV. On a plus , a close below $27 was narrowly averted (on low volume as usual) . I had a line in the sand at $27, basically the same line that not that long ago I had drawn at $30.
Alas in the past 30 days about the only thing that has gone down more than EDV is Bitcoin, so that little thing to be happy about.
And so I am calling a bottom: on EDV, gold, and some personal stuff like my bank account.
The thinking on that bottom is that inflation is now at 7% in the good old USofA, as measured in a way that usually under reports it. So combine
that with the FRED (Federal Funds Effective Rate) being .08%, or
rounding off , 0%, that would give a 'real' interest rate of minus 7%. Astounding! Remembering 1980, or for some of you youngsters, being told about it by those more experienced; at that time the FRED was pushing 20%, and it stayed above 15% for a couple years, with the inflation rate only briefly rising to 15%. So the big inflation fight then happened with positive 'real' rates. The Fed, BoC, etc. have said they don't see FRED type rates going above 2%. They're not stupid, really; it's a tough job, those balloons need so much blowing, it must be
hyperventilating; so they know that anything above 2% would mean there would be little bits of balloon everywhere. But inflation looks pretty solid at 7%, for awhile anyway. Which means of course, for the slow ones, that 'real' rates will be quite negative for a goodly period of time.
And for the really slow ones, that is historically really really good for gold. And figure out what that means for EDV by yourself, my week is over.
And this weeks contest for best, or worst I guess it was, gold disaster investment story was won by High River Gold. I'm curious about that, having never heard of it , and a brief Google didn't turn up much. So the two posters who posted that have gotten their thumbs up. It was the only entry in the gold category, so participation was a little disappointing.