A sharp rally in the metals today along with stocks, on the last day of the year.
Gold extended its longest bull market since 1920 with a modest 7 percent gain for the year. Stocks returned about 13 percent, and bonds eaked out about 4 percent depending on duration.
In a period of inflation stocks may do well. In stagflation, not so well depending on how the expansion of the money supply and tax gimmicks are wrapped up in policy and the delivery of monetization. Multinationals may outperform depending on the evolution of global trade, policy, and the currency wars.
And as for me, I suspect that we haven't seen anything like a top yet in the metals. The printing presses and de facto defaults are just getting underway.
Non-Farm Payrolls number on Friday, and the fiscal cliff follies will enliven the Congress for the rest of the week.
There is a chance that they will kick the budget cuts can down the road, and merely prevent those making $450,000 or less from a repeal of the Bush tax cuts.
I would suggest that you keep an eye on those rowdy boys in the House.
Have a safe and Happy New Year.
