Oh my... the last few days have not been kind to the Dow Jones Index. The Dow is down some 1,950 points from a new record high reached just last week and the blame game is on as to the cause of this 'mini-crash'.
Just a few weeks into another quarter percent rise in rates since the last FOMC meeting mid September, the debt owing by emerging markets who borrowed tons of money, literally, during the 'cheap era' of zero % rates, has suddenly increased as much as 20% or more. EM currencies have dropped significantly just since the last rate hike as the US Dollar soars (for now...). EM markets are now facing the prospect of a weakening currency and rising rates trying to pay off Dollar based debt.
Gold is now being seen as a safe haven again as reality sets in. Gold is at $1220 this morning, October 12, 2018. With the FED surely raising rates again in December, we should expect some fireworks in the gold sector come January. Forecasting higher gold prices.
Everyone expects Bitcoin to go higher but the burnout since its meteoric rise to almost $20,000 and then down to the $6,000 range is still fresh in everyone's minds. That's a lot of volatility for something that really isn't backed by anything.
So expect more focus on gold this time around (and silver too). Mining shares should get some momentum from all that is going on.
