tell you the truth, i'm sitting here stunned that the bankers allowed this milestone to be reached so easily. usually there's tons of back-and-forth drama as silver approaches a new high--and at least one good dr. evil-style raid--but not this time. this time, silver breezed its way to the $40 finish line with barely a pause for breath.
maybe it's finally beyond their ability to stop now.
will it hold? who knows--i expect they'll try and smash it back down a few bucks over the next few trading sessions by flooding the market with naked shorts like they always do, but the trend is unmistakable now, and the bankers know it, and they're scared.
why do the bankers care about the price of precious metals, and why should you? simply because, as a smarter man than me recently put it, gold and silver are the barometer of governmental and institutional profligacy and corruption--they always have been, and they always will be. their skyrocketing prices are a rebuke to the whole sorry system--like holding a mirror up to its ugly face, for all the world to see.
[update: i forgot to mention the other reason the bankers are scared--namely, that they're sitting on god knows how many over-leveraged contracts to deliver at prices they in their arrogant stupidity thought were safely out of reach, so they never bothered to, you know, actually buy the physical metal to back 'em up. awkward, wouldn't you say?]
so is it onward and upward to $50 now? well, here's where it gets interesting. our financial savior, mr. bernanke, is finally approaching the crossroads i've been predicting for nearly two years now, and, depending on what he does when this latest round of quantitative easing ends as scheduled in june, precious metals will either really take off, or they'll sharply correct.
see, he's faced with one hell of a dilemma, is our fed chairman. all this new money he's pumped into the system over these last couple years and swore he was in control of has--surprise!--caused a commodity-price explosion that's wreaking havoc and toppling governments worldwide. problem is, if , as promised, he ends QE in order to curb the inflation, our vaunted "economic recovery" that's been running on nothing but this fed-provided life support will promptly collapse, taking with it not only precious metals (temporarily, anyway), but the stock market, job creation, what's left of the housing market and whatever shreds of hope barack obama might still have of re-election.
if instead, he continues as he has been and opts for another round of monetization? well, the stock market will rally another 1,000 points and our imaginary recovery will continue to wheeze along for an unspecified period of borrowed time. oh, and inflation will move into double digits, oil will go to $200, gold and silver will go to the moon, and food prices will continue to climb, sparking further rioting and revolutions abroad.
so, what's it gonna be, benny--QE 3 or no QE 3? the world hangs breathless on its fate.
3 comments:
Guttermorality:
You are a not an economist.
The Quantitative Easing was approximately $400 billion. That is in a $13 trillion U.S. economy. That is not much. Certainly not much that the world will come crashing down without it.
It you figure the world economy is approximately 2.5 bigger than the U.S. economy (the U.S. accounts for approximately 40 percent of the world GDP), that means the global economy is somewhere around 32.5 trillion dollars and the QE was right around 1 percent of that figure.
One percent of just about anything does not make much of a difference one way or the other.
Silver has been going up and gold has hit another all-time high.
Commodities in general are way up (there has been a cornering of the market in cocoa from what I understand).
I have a hard time thinking, however, that there is another global depression -- as you are predicting -- right around the bend.
On the other hand, you certain spin a good conspiracy story. It's just not believable.
noblesavage: there is so much wrong in your comment i really don't know where to start, so i'm not gonna bother.
I made a prediction for December, 2011 on the price of gold. I'm not sure I'm going to be right, but I'm not convinced I am going to be horribly wrong either.
So, make a prediction: Where will silver and gold be in a year?
I think gold is headed down. It is overinflated in its current price. It may take some time, but sub-$1000 per ounce gold will be happening in the mid-term. If I'm wrong in six months or a year or so, I'll certain say so.
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