Markets were lower this week, with the exception of Bitcoin, which recovered all of last week's loss, and platinum, which was almost unchanged.
Bitcoin gained 28.5% to close at 2.34 g., erasing last week's big decline. Trading volume continued to rise, averaging about 108 kg per day. Expect extreme volatility to continue, but with an upward bias over the long term. Bitcoin still represents a unique value proposition, offering, like precious metals, an asset that is not anyone's liability… but with the ease of instantaneous transmission over the internet coupled with a cash-like level of privacy. As monetary disaster continue to unfold in Europe, Japan and the US, expect to see growing interest in Bitcoin.
Once again, the government currencies were all weaker, led by the USD, which declined 5.2% to 24.3 mg, now 54.3% above its half-life curve. Have we seen the top? Perhaps not, but by every measure, the USD is vastly overvalued, and I urge you to take advantage of this by acquiring real assets at bargain basement prices.
Bonds were also lower, with the short term SHY losing 5.2%, mirroring the USD, while the long term TLT fell 3.9% to close at 2.62 g, leaving it back where it was on Jun 25th, approaching support at 2.55 g.
Stocks declined, with the Dow and Nikkei down 3.2% and the S&P 500 off 2.4%. The HUI Gold Bugs Index lost 1.2% to close at 5.47 g, putting it in third place for the week, behind BTC and platinum. In spite of this relative outperformance, the HUI remains very close to its lows for this move, and is still in a well established bear market with little support above the old all-time low at 4.2 g.
Commodities were mostly lower, with platinum, which rose 0.2%, the only gainer. Coffee led the decliners, dropping 6.6% to close at 29 mg/lb. Crude oil gave back about half of last week's gain, closing at 2.58 g/bbl, down 2.7%.