The observation that PIMCO’s Total Return fund peaked on November 4 got us thinking about that day, how weird it was, and what’s changed since then.
That was the day that our end-of-day roundup was: Stocks Surge And Everyone Is Terrified, and we ran this picture — >Why the alarm? It was the day after the Fed commenced QE, and EVERYTHING went nuts. Stocks exploded higher. Gold exploded higher. Industrial and agricultural commodities exploded higher. Every currency but the dollar had exploded higher.
For one day, the hyperinflationistas were riding high. Printing money really would lead us on the path to Zimbabwe.
Well that was the peak of it.
Stocks have continued to move higher, but everything else, not so much. Gold is currently lower than it was on that day. The dollar is much higher against all currencies. The agricultural commodity boom has faded a bit.
Oh, and bonds: CRUSHED.
What was weird, was the delayed reaction. The actual QE announcement on November 3 didn’t cause that much of a move. It took a day for the late-comers and armchair Fed economists to come around and say: Oh, Bernanke ramped up the printing presses yesterday, so I’m going to buy some gold today, or whatever else they did. That should have been a sign that this wasn’t an efficient market, but rather the masses making an uninformed bet.
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