Were it not for the fact that such serious sums of money are involved, it would be comical watching the happenings in our idiotic markets these days. Here we get the worst unemployment numbers (9.5%) since August 1983 (and that is just the official number, which is bogus), and traders flee stocks but for some odd reason rush into the “safety” of the US Dollar and that of Japan’s Yen, which as we all surely know by now is the strongest economy in the world at the current time! Nothing like the comfort of knowing that you are getting yields of less than 2% on your money to let you sleep well at night. Yeah, sure…
I really do wonder what historians commenting on this period at some point in the future are going to write when they attempt to explain the madness in rational terms. All I know is that we will have lived through this and will be able to say the entire global investment community lost their collective minds for a season.
Suffice it to say for now that once the stinker of a jobs report came out this morning, the deflationist psychology took over once again and the inflationist psychology went out the window – once again. Back and forth, up and down, in and out and around we go over and over and over again. Like I have been writing all week long – why bother even watching this crap any more. It is a waste of constructive time. Monday morning of next week we will probably be sitting here watching the exact opposite of what we saw take place today and remarking how the “green shoots” are thriving and well after having another spray tank full of Round Up applied to them today.
Of course, once the “safety” of the Dollar was the play of the day, and once crude oil got thumped, down went gold after yesterday’s very strong performance and down went the HUI. Yawn – someone wake me up in September.
Open interest in Comex gold continues moribund. That too is characteristic of a market stuck in a rut where there is no clear consensus.
Gold will need to close above $950 to get anything going on the top side.
Other than that there is really not much to say about any of this – deflation is battling inflation and until one side gets a clear advantage and dethrones the thinking in the other camp, we are going to see no trends, no orderly markets, no sanity and nothing but idiotic volatility and casino-like markets.
The markets have been completely taken over by the day trading, one minute bar chart geeks who wouldn’t know a pork belly from a brisket cut or a grain of wheat from a cocoa pod but who are enamored with lots of squiggly lines and dream of coming back from their bathroom break and discovering that they have traded in and out of the same market 15 times during that period and made $100,000 on each turn…
The rest of us normal people who actually have lives to lead and families to raise, etc. are better served keeping a longer term perspective and understanding that the Dollar’s days of supremacy are forever over and that the rise of the BRIC nations means that America is beginning to go the same path as the once mighty and proud British Empire. Its leaders too spent it into oblivion and destroyed its currency in the process.
China is slowly and surely taking steps to make the yuan more readily adaptable to taking a larger role in international trade while Brazil and India also begin to flex their economic muscles and demand a larger role on the international stage.
Quo Vadis America?