Performance of Various Assets including Precious Metals in General Market Declines

 

First, let's realize that not all 'crashes' are the same. 

They are precipitated in different ways from different contexts, and with post decline actions by the fiscal and monetary authorities, and of course exogenous events. 

This expresses as the duration of the decline from top to bottom, and the speed and duration of the 'recovery.'

The Crash of 1987 was a 'liquidation event' that occurred as a break in confidence during a market bubble based on faulty fads and assumptions including portfolio insurance.

 In a liquidation event almost everything is sold in a panic to raise liquidity (cash).

The recovery was facilitated by the monetary actions of then Fed Chairman Alan Greenspan.

Here is a picture of the tech bubble collapse of 2000-2002 

Although the miners (HUI) in this case took a heavy hit in the initial decline, their recovery was notable in its outperformance.

There is a similar scenario for the Crash of 1929-33, but the price of gold is heavily influenced by the actions taken in the gold market by the government. Monetary gold was withdrawn from circulation, and afterwards revalued higher to help stabilize the banking system.

The performance of Homestake Mining post crash is legendary.

Stocks and Precious Metals Charts - The Lethal Chambers of Hardened Hearts

 

"The essential characteristic of a good and healthy ruling elite, however, is that it views itself not as a function of the monarchy or the commonwealth, but as its very meaning and highest justification, and that it therefore accepts with a good conscience the sacrifice of untold human beings who, for its sake, must be reduced and lowered to incomplete human beings, to slaves, to instruments."

Friedrich Nietzsche, Beyond Good and Evil, 1886

‘The only fundamental and possible socialism is the socialisation of the selective breeding of man. A part of eugenic politics would finally land us in an extensive use of the lethal chamber. A great many people would have to be put out of existence simply because it wastes other people’s time to look after them.”

George Bernard Shaw, Lecture to the Eugenics Education Society, The Daily Express, March 4, 1910

"The moment we face it frankly we are driven to the conclusion that the community has a right to put a price on the right to live in it.  If people are fit to live, let them live under decent human conditions.  If they are not fit to live, kill them in a decent human way.  Is it any wonder that some of us are driven to prescribe the lethal chamber as the solution for the hard cases which are at present made the excuse for dragging all the other cases down to their level, and the only solution that will create a sense of full social responsibility in modern populations?"

George Bernard Shaw, Prefaces, 1934

"As everything in what used to be called creation becomes a commodity, human beings begin to look at one another, and at themselves, in a funny way, and they see price tags. There was a time when people spoke, at least occasionally, of 'inherent worth'— if not of things, then at least of persons. It is sometimes said that since everything is for sale under the rule of The Market, nothing is sacred. The Market is not omnipotent— yet. But the process is under way and it is gaining momentum."

Harvey Cox, The Market as God

"Fascism is capitalism plus murder."

Upton Sinclair

"Through our relationship with the Incarnation, we recover our true humanity, and at the same time are delivered from that perverse individualism which is the consequence of sin, and recover our solidarity with all mankind."

Dietrich Bonhoeffer

As you may recall, George Bernard Shaw was a member of the Fabian Society, a far left organization, and an avid supporter of eugenics, which was quite popular in the US and UK in the early part of the 20th century.  He, like so many other of the elites, was an early admirer of Hitler and Mussolini.  He modified his views of course with age, but never apologized.  Truly, there is probably no more perilous habit than the sanctifying of success.

It is the theory of the political continuum that at the extremes of the left and the right, their perspective on the individual and the human soul become remarkably similar, and the outcomes and policies tend to be indistinguishable except in their wording and rationalizations.  They tend to denigrate democracy and the common public, and have a penchant for fascism.

Stocks were in rally mode this morning, for a number of reasons some of which were exogenous.  

The stronger than expected retail sales number was taken in stride, once you looked 'under the hood' and saw what constituted it.

And so things were clicking along happily.

But alas, an exchange of words and a threat of further escalation in the military situation in the Mideast turned the risk lever back to off.

Stocks melted, giving up all their gains and going out near the lows. 

Gold and silver rallied sharply.

VIX rose sharply.

I suspect that this new found respect will wear off if nothing occurs on the geopolitical front.

Wall Street can shift from fear to greed and back again with phenomenal speed.

Have a pleasant evening.

Stocks and Precious Metals Charts - Son of Man, They Cling to Idols In Their Hearts

 

"Our hatred is a deadly poison.  In hatred, we are like bees who must pay with their lives for the use of their stingers."

Friedrich Reck-Malleczewen, Diary of a Man in Despair, 1947

"As though you could use violent, unjust means and achieve peace and justice.   Means determine ends; and must be like the ends proposed.   Means intrinsically different from the ends proposed achieve ends like themselves, not like those they were meant to achieve."

Aldous Huxley, Eyeless in Gaza, 1936

"No doubt it is more comfortable to deliberately wear blinkers that prevent one from seeing the evil done in the discharge of their responsibility— to be unwilling to see that one is defending murder and robbery."

Helmuth James Graf von Moltke, Executed in Plötzensee Prison, Berlin, 23 January 1945

“Better to be a beggar in freedom than to be forced into compromises against my conscience.  

All of the Christian West stands and falls with the words of Genesis. 'And God created man in His image.’”

Dietrich von Hildebrand

"Reading von Hildebrand reminds us that there is only one sure remedy against an ideology of hate, and that is to expose it to public criticism and to affirm what it denies.  The ardent faith that inspired von Hildebrand is not easily recovered in our skeptical times.  But through his love of truth and his brave opposition to a public culture of deception, he bore witness to values that we still share. "

Roger Scruton, foreward to von Hildebrand's My Battle Against Hitler, 2014 

“Son of man, they have set up idols in their hearts. They cling to the errors that will make them fall into sin."

Ezekiel 14:3

"How often I have longed to gather your children together, as a hen gathers her young under her wings.  But you would not let me.  As you have willed it, so your house is now yours to command— but is made desolate.’”

Matthew 23:37-38 

 

As they suddenly woke up to the reality of the economy and tax cuts, so the markets suddenly realized that the Mideast and Eastern Europe may be staggering along towards a wider, bloodier war.

Stocks dropped hard, and bounced very little into the close.

Gold and silver continued the spike from overnight, ran up to new highs, and were brutally sold down to finish in the red.

Nothing like the Dr. Evil strategy to provide a solid wash and rinse, especially into the weekend after Europe goes home to dinner.

VIX spiked, but backed off some, although it finished much higher than usual.

The Dollar rallied again, as it did yesterday, pushing up towards the 106 handle.

Yay us.

Netanyahu keeps poking Iran in the nose, as does the Ukraine with Russia.

Uncle Thug's minions are being quite the naughty boys. 

Let's see where this goes, hopefully not to hell in a handbasket.

Those who serve and worship the power of the world don't have to worry about falling into the abyss— the abyss is coming for them. 

And the longer this continues, the worse the resolution will become, and the more painful the final reckoning will be. 

They will be weighed, and found wanting.  And may God have mercy on their souls.

Have a pleasant weekend.