CHARTS OF THE WEEK: Gold Is Plunging...

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chart of the day, gold to silver ratio, nov 2010

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  • If You’re Looking For Inflation, Here’s Where To Find It
  • Mortgage Rates Just Hit A Four-Month High
  • Don’t Think There’s Deflation? Core CPI Has Hit Its All-Time Series Low
  • Gold Is Plunging…
  • Actually, Asian Currencies Are Appreciating At Record Speed

If You're Looking For Inflation, Here's Where To Find It

Right now, Federal Reserve Chairman Ben Bernanke is trying to stimulate inflation in the U.S. economy through purchasing assets the Fed's money. Some people like it, and some people don't.

Bernanke, through reducing the returns on treasuries in the U.S., is forcing investors to move out on the risk curve and into emerging markets. And that if flooding countries like China, India, and Brazil with cash.

The cash is creating inflation in those economies. China may soon tighten. India already has. And Brazil has turned to capital controls to protect itself.

So whatever you think of Bernanke he's succeeding, just not where he might have hoped.

Check out further details on the new inflation deluge hitting the world here >

Mortgage Rates Just Hit A Four-Month High

Rising rates may be a sign of an improved economic outlook, but this won't help: 30-year mortgage rates just hit a four-moth high according to Zillow (via PragCap).

This might be seen as a failure of the Fed, but then, they are purposely not buying many long-end Treasuries, so this can't be too surprising to them.

Don't Think There's Deflation? Core CPI Has Hit Its All-Time Series Low

For those who think the Fed is fighting the wrong battle, note this: Core CPI just hit its all-time series low. (via Econompic)

Gold Is Plunging...

When priced in silver.

We're getting close to historical lows in the gold:silver ratio, and days like today, when gold is up by 1%, and silver jumps by 5%, only bring us closer to the most extreme levels.

Actually, Asian Currencies Are Appreciating At Record Speed

Today, Federal Reserve Chairman Ben Bernanke made his most aggressive speech to date against Chinese currency manipulation, targeting countries that artificially debase their currencies for competitive advantage.

But was he right to do so?

A chart from Societe Generale suggests the current rate of appreciation for Asian currencies (dollar-Asia index) is higher than it has been over the past decade. Notably, those periods of appreciation often ended with economic crisis.

It is possible this basket of Asian currencies may just show steep appreciation in the Korean won, Thai baht, and Indian rupee, and not the yuan. But the steepness of the appreciation would suggest otherwise.

From Societe Generale.

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