Friday, December 03, 2010

Gold is over $1400/ounce in anticipation of increased inflation. The 10-yr./3-mo. spread is over the critical value of 250 basis points. Investors are fleeing the longer maturity and creating a spread of 285 bp.

Moderate inflation is good for the stock market. It usually means that the economy is growing and that firms can raise the price of their goods and services.

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