"D, I think you are wise to lay back. This is political news driven market. I believe the Euro is preposterous and least worst by far is break up of current group. The situation remains impossible. Finally, the FT IS moving that way (today: Martin Wolf; John Kay). Climate change next I hope. i have seldom dealt so little for so long. I thought you might be interested in attached. Sensex is at bottom of range.

David Fuller's view Thanks for your email and the informed view on India which is posted in the Subscriber's Area.

I think we can conclude that precious metals have been more affected by global deleveraging than safe haven or momentum buying over the last six months (earlier for silver following its upside blow-off in April). Following a decade of advances, so many of those who were ever likely to buy were already long (see also my more detailed comments on gold in yesterday's Comment).

Much of the Eurozone debate and non implementation of agreements does seem to be an unedifying spectacle but the debt default shock from a break up would hardly be the most sanguine outcome. Moreover, this prospect has certainly not been fully discounted by markets and would have global implications.

I commend the GaveKal Dragonomics comments to any subscriber interested in India. Here is the last paragraph:

The positive signposts to look for would be a decline in the benchmark WPI inflation gauge, rate cuts, and a consequent stabilization of GDP growth. Investors with an optimistic bent can prepare by picking out the best cyclicals and beneficiaries of lower rates to buy if the prevailing winds reverse. Many of these equities are trading at large discounts to historical averages. Downside protection is probably better achieved by buying NIFTY puts, which are also fairly cheap, rather than selling off established positions.


The Weekly View: Europe Fails to Resolve the Main Issue - Growth - My thanks to Rod Smith, Bill Ryder and Ken Liu for their informative market letter. Here is a brief sample: