INTERESTING CHARTS

 
t. man hatter

Two interesting charts.

The opposite of calm is chaos. So what's the opposite of low volatility, violence? MSM likes to poke fun at so-called gold bugs as they run interference for the Fed. But they never mention paper asset hogs.

To us the Fed is nothing more than a coterie of  paper asset hog farmers. They'll toss the slop to anyone and everyone willing to swallow it.

We are among those who think--and we're not shy about saying it, either--inflation will be a bigger problem than currently perceived by many. Reserving the right to be incorrect doesn't disturb us in the least. 

It's part of the reward-risk ratio bureaucrats and politicians are always trying to legislate away. You do your homework and then your take your risks.

We have written about gold before, most recently last month in "Don't Need Your-Well-Thought-Out Advice" and "Gold."

Here is a quote from the source of the above charts.

If we assume inflationary risks are not transitory in the short term, then that means the Fed may ultimately be behind the curve and be considerably lagging in terms of responding to inflation (which I personally do not believe is a real threat just yet). Gold tends to do well in negative real-rate environments, whereby inflation is higher than interest rates. 

We may be on the verge of that happening again, which in turn explains some of the more recent strength in commodities generally. Our equity-sector ATAC Beta Rotation Fund BROTX +0.39%  is currently overweight materials relative to the S&P 500 as momentum persists there, consistent with the idea that inflation expectations are altering. 

So while the Golden Age never actually happened, the Age of Gold still might for those interested in diversifying away from the honey-badger U.S. stock market, which doesn't seem to care about risk until it actually does. I don't know about you, but when I look at a chart of Newmont Mining NEM +1.43% ,  that sure does seem like an interesting spot to position in.

http://www.marketwatch.com/story/gold-may-be-entering-a-golden-age-2014-08-04