If you read my last blog, you know I’m not conceding a double-dip recession, and I wanted to add metals to my list of sectors worth looking at.
Maybe the best way to play the Chinese yuan, Matt, is to not play it at all.
It’s no secret that, for U.S. equity investors, the single best possible move last year was to take their greenbacks and hide them under a mattress. Not only did you avoid the equity decline, but the greenbacks have been doing more than gathering dust. In fact, the trusty old U.S. dollar has been on a tear, gaining 13% versus the euro, 14% against the Swiss franc and 25% versus the British pound over the past 12 months.
2008 was a rough year for commodity investors. Asset flows into commodities ETFs suggest that many new investors believed the commodity bull was here to stay. Unfortunately for those taking long positions, the first half of 2008 may have been a classic bubble that burst. The proof is in the chart: The S&P GSCI (which includes 24 commonly traded commodities) collapsed by 53% from its July 3 peak to its lows in December 2008.