You can’t say Le Fly didn’t warn you.
Both gold and silver are being washed out this morning, down 5 and 7% respectively. I want you to understand something very important: the capital costs to mine for gold and silver is extremely expensive. Most of these idiots can’t make money at current levels and before you know it, they will be filing for bankruptcy protection. The net asset values of all miners will be marked down today, potentionally leading to credit downgrades.
The miners are the banks of 2008. They are in death spirals. Don’t be a hero. Avoid.
Bonds are getting killed again, with the 30 yr nearing 3.5%. Both Europe and Asia got smashed to the tune of 2.5%. The trend is very easy to identify: full blown liquidation of all assets, sans dollars, due to the belief that rates are heading up.
But it’s deeper than that, lads. The underlying fear is the end of Benjamin Bernanke. He is the bitch killer, the one who regulated bears to fag boxes, similar to what superman did to the villains in part 1. But now Obama wants him gone, replaced by Janet Yellen. The market isn’t going to like that, believe you me. Do you remember how hard the market dropped when Greenspan resigned? No one knew Ben and thought he was a putz. It’s very possible that a new Fed chair steps in and jacks rates higher immediately.
The negative for stocks is the possibility of the Fed bid being pulled from the market. That means we’re on our own again, a very hard spectacle to envision.
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