Gold an emmerging market?

[blazespinnaker]

Are the hedge funds unwinding out of gold, much as they bailed on India / Turkey / etc?

Looks like it.

The question, I think, is how will this effect housing?

I think there are two things going on here:

Central bank craziness and Hedge fund fun.

The hedge funds have been manipulating the smallish sized markets (gold, PMs, commodities, emmerging markets, etc), while the CBs have been propping up the treasuries.

Are the two connected? Perhaps .. it's hard to say.

One possibility is that as the hedge funds fall unwind, the economy will falter, and the CBs will pump in more liquidity to prop up the american consumer and the world wide economy, thus softening the landing for the housing market in the US.

Prices have yet to dip on Zillow. House Price UK shows previous housing bubbles, and the crash usually follows very quickly very rapidly.

This may be a long, drawn out affair.

The only problem with all of this, of course, is stagflation. If the CBs continue to pump liquidity, then inflation will continue to occur.

Where do you go when stagflation hits? Anyone?

[blazespinnaker]

Come to think about it, forget about Heliben, it's more like HeliBOC we need to be worried about.

[jk]

looking at our last episode of stagflation, the 1970's, commodities, pms, real estate, i.e. tangibles, were the winners. as eric notes in his column tonight, however, the markets are reacting like we are having another deflation [not stagflation] scare.

i think the key question is what happens when/if we get to the end of june and the fed either pauses or raises 25bp with a statement that it is planning to pause. does the carnage unwind? does the dollar dive? how high is up for gold? answers will be welcomed.