The message from today's chart: Bill Gross 1, British politicians 0.
About three weeks ago, we profiled the downside "breakout" in the British pound. Investing legend Bill Gross said Britain's government bonds (and therefore, its currency) were "resting on a bed of nitroglycerin," made of debt and malinvestment. British politicians publicly disagreed with Gross and assured the public that the government's finances are going to be fine.
The chart below displays the past year's trading in the British pound. As you can see, the market is taking Gross' side on this one. The red arrow marks our first "look out below" warning. This is when the pound hit its lowest point in four months. The currency then staged a flimsy relief rally, which fizzled. And in the past week, the pound just struck another new low (blue arrow).
In a world of runaway government bailouts and handouts, expect this kind of weakness to hit almost all paper currencies. And while the best traders can profit in the currency markets, the "sleep well at night" action here is to take a position in the only honest money around – gold.
About three weeks ago, we profiled the downside "breakout" in the British pound. Investing legend Bill Gross said Britain's government bonds (and therefore, its currency) were "resting on a bed of nitroglycerin," made of debt and malinvestment. British politicians publicly disagreed with Gross and assured the public that the government's finances are going to be fine.
The chart below displays the past year's trading in the British pound. As you can see, the market is taking Gross' side on this one. The red arrow marks our first "look out below" warning. This is when the pound hit its lowest point in four months. The currency then staged a flimsy relief rally, which fizzled. And in the past week, the pound just struck another new low (blue arrow).
In a world of runaway government bailouts and handouts, expect this kind of weakness to hit almost all paper currencies. And while the best traders can profit in the currency markets, the "sleep well at night" action here is to take a position in the only honest money around – gold.
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