HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
I remain concerned about the stock market.
1) I believe of most important are that interest rates continue to fall. The bond market appears to be screaming deflation (double-dip recession). Moreover, the fall in interest rates appears to be accelerating (see chart of the 10-year T-Bill, next page).
2) On Tuesday the Federal Reserve said the recovery is slowing. When the Fed admits they are scared, I am scared. Interest rates will stay at essentially zero for the foreseeable future. The Fed will do whatever it needs to do to prevent Great Depression-like deflation, including sacrificing the US dollar.
3) Market momentum appears headed south. Richard Russell of the Dow Theory Letters says his PTI (Primary Trend Index, a measure of market momentum) is in danger or turning negative.
4) In late-2008, when the stock market tanked and our financial system nearly froze up, gold was pulled down with everything else. Now, however, gold is within about $50 of its all-time high. I interpret this as A) gold is sensing the Federal Reserve will print, print, print and B) the biggies are become concerned about the fragility of our financial system and buying gold. Note that GLD is now the second largest ETF, behind only SPY.
I recommend:
1) Buy gold, both physical gold and the precious metals in your brokerage account.
2) Stay liquid.
3) Don’t take on any debt.
4) Please be careful. “Buy the dips” only at your risk.
RMD
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