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“Since ancient times, credit markets have undergone periodic booms and busts. In 594 BC, for example, the Greek state of Attica found itself under severe economic stress because of the massive debt incurred by many of its citizens. The ensuing civil disorder resulted in a handover of power to Solon, one of the ‘seven wise men’ of Greece . Solon took radical steps to restore balance to the economy, such as canceling debts, freeing those enslaved for failing to repay their loans, and devaluing the currency by 25 percent.” FDIC Outlook, Summer 2006
The metals soared today breaking out across the board with mining stocks starting to follow. It appears that we have hit the target of 1455 which I had called out when gold was trying to break out of the big cup and handle formation around 1200.
The bulls need to stick the breakout, and resist any attempts to break back down again, and set up the next leg up to $50 Silver and $1590 Gold.
I think it will take a stock market crash to stop this advance which is intimately tied to global monetary expansion and a corrupt financial system.
Not yet, but some day. Down Goes Morgan, Down Goes Morgan..
At some point they will be carrying them out of the silver pit on stretchers.
Benny and the Boys need to hang on here.
There is a LOT of air under this monetary meringue.
I can see an event dropping the SP futures down to test the 1200 level in less time than most might imagine.
"The CME Final for Friday reports that volume was indeed 174,502 lots, 9.34% above estimate, open interest rose 983 lots – 3.06 tonnes or 0.2% - to 493,137 contracts.
This suggests that the heavy selling which sent gold plunging $26.40 in the aftermath of the employment report was a short selling raid, which was only partially successful in spooking out longs." John Brimelow
We *could* get a pullback or a consolidation here abouts, but I am not betting on it.
For a variety of reasons I went to low leverage and beta today, and am hiding in long term investments until I can get a better idea of which way the wind is blowing.
When you get this kind of cynical action in the financial markets on such light participation, you get the sense that you are in a warehouse full of leaking gasoline cans, and that the watchmen are about to light up.
US stocks closed near or at the highs of the year, on one of the lowest volume days of the year.
Texas Instruments offers to buy National Semiconductor.
If I were of a mind to look for a top this would be about the place for at least a minor correction of 3 to 5 per cent. But with Benny in the game and the banks skewing the trade, it does not appear likely unless there is some exogenous event.
Capitalism is a very good system. I would like to see the US try it out again. The first step is to commit your economy to legitimate price discovery and fair and efficient markets. It takes work to achieve this, as the idea that markets are naturally perfect is as great a canard as the perfectibility of central planning by an autonomous elite.
"Unfettered capitalism is a revolutionary force that consumes greater and greater numbers of human lives until it finally consumes itself." Chris Hedges
The pigmen and piglets, pounding the table for more, are going to be in for quite a surprise when what goes around, comes around.
