Gold and SIlver
A few comments on the precious metals by Jessie.
Gold and silver have broken out, as the weak employment report and the debacle in Europe have renewed ‘investors’ expectations in additional monetization by the ECB and the Fed. I say ‘investors’ in quotes because there are no investors anymore, only speculators and gamblers.
However, to say that this may end badly is an understatement.
Intraday commentary on the Non-Farm Payrolls report and the state of the economy is available here. It is not particularly upbeat, but it is not downbeat either. Rather, the forecast is for greater uncertainty, and therefore, risk.
“Efficient market theory is a fraud, and further deregulation is little more than a license to steal. It is no coincidence that the gap between the wealthy few and the public is at levels not seen since the last Great Depression. This is the mark of a very unhealthy kleptocracy based not on merit but on position, power, and payoffs.
The corruption in the system acts like a huge tax on the real economy, diverting resources, labor, and investment away from productive activity and towards monopolies, cartels, and the fraudulent accumulation of wealth through the manipulation of financial assets, making money from money.
There will be no sustainable recovery until there is substantial, genuine reform of the financial and political systems, both of which have been tainted by big money and corporate power promoting a very narrow and self-servingly destructive agenda.
Agree or not, things will continue to get worse, even if in a long, dwindling cycle of decay and despair, until change comes. And it will come, one way or the other. And the longer it takes, the more volatile the outcome.”
I am not sure how far they can take the equity markets in expectations of more QE. But at some point, even if it is after that QE arrives, the markets will begin to sell off, slowly at first, as the focus on the candy delights of monetization turn back towards the decline in earnings and median wage, and the malaise that will continue to grip the broader economy.
This *could* be masked by a bout of serious inflation, if not hyperinflation, but I still do not see that actually developing yet, except perhaps as a precipitous series of devaluations and the resetting of the global monetary system, with a commensurate redistribution of paper wealth as occurred in the Soviet Union on its collapse.
But the risks are great, with many exogenous variables, and so any forecast that one can offer is bound to be diminished by uncertainty.
Whatever may happen, there should be little doubt that this generation will be tested in unfamiliar ways, at least to them, but with many analogues and similarities in modern human history.