Finally Seeing the Trade of the Generation

Bill Cara

I think we can finally say that this week represented the Trade of the Generation, which is to Sell bonds and Buy Gold/Goldminers. Thursday for bonds -- before the close -- could be a major sell.

If there is a trader in the universe who has bought U.S. treasuries for reasons of income rather than panic/safe haven, then there won’t be a second. How would anybody expect to make money in the 5-year Treasury yielding 2.09%? The 10-year yielding 3.39% and the 30-year yielding 3.97% reflect only the ridiculous prices as traders have panicked from other assets.

The $XAU goldminers index hit a high of 209 in March-08. Eight months later, the index was often in the 64 to 72 range. Goldcorp (GG) Wednesday closed at 18.62. In late September it was double that. Within a year, this stock will likely be at least +100% higher than the close Wednesday.