We had strong downgrades all across Europe and a total jettisoning of risk trades in Tuesday's session with the result that we had a sinking Euro and a surging Dollar. Overnight we learn that now China promises to join the money rain parade and pour its wealth into bailing out Europe to protect its export markets.
What do we get as a result of this? A complete reversal of the risk aversion trades with all the money that came pouring out of the markets Tuesday now turning around and flooding right back in again.
Up goes gold and silver after both sold off on Tuesday and up goes the Euro and down goes the US Dollar. Presto chango; wave that magic wand and all the woes of the financial world have just disappeared.
The promise of more bond purchases by China of European debt has sent the S&P 500 futures through very significant chart resistance at the 1350 in the Asian trading session. It looks like the drunken binge continues with no fears, no worries in sight now that China has become the lender of last resort. Apparently what the Central Banks could not do, China has.
I wonder how history is going to record all of this madness. I just hope we all live long enough to be able to tell what it was like living through it and watching it unfold day by day and week by week. No one from the future will likely otherwise believe that a generation of humanity was this ignorant. On the other hand, maybe it is those of us who actually believe DEBT is generally something to be avoided unless it is carefully managed and respected who are the fools here and those who just shrug it off as nothing to be concerned about are the truly wise among us.
Up is now down; down is now up; light is now darkness and darkness is now light; bitter is now sweet and sweet is now bitter. Welcome to the brave new world in which prosperity can be created by piling up massive loads of debt without the slightest bit of concern for how that debt will ever be repaid.
i am constantly reminded why this is my homepage.
ReplyDeletegartman: 'wildly bullish on equities'
thats my sign to tug on my seatbelt again.
Thx for your level headed commentary.
ReplyDeleteFor the life of me I don't understand why there is any hope/confidence left in any of the western world politics.
And for that matter the fiat. Most of all the dollar. Even "TF Metals Report" keeps on looking at the dollar index - by now that should be irrelevant. So it just shows that when the trend is well defined we may be outspoken and proclaim others to be the "sheeple" but when we faced with these present scenarios there are many many more sheeple than we believe - including the TF Metals Report.
There are in reality very very few supposed "non sheeple".
any motive there Mr. T?? could ya be maybe a little more obvious. Hilarious!
ReplyDeleteReflate and money printing is the word of the day today. Enjoy the ride while it lasts. We're in unchartered waters now. Absolutely NOBODY is against reflate, look at all the good it does! Nobody wants to see a recession, and damn the torpedoes... PRINT. Of course, nobody is thinking about the other side of this:
ReplyDeleteClass warfare, a tale of two cities - those with reflatable assets that can afford inflation, and those that don't have assets, Productivity well below potential, a placated, entitlement dependent society - a complete destruction of capitalism as we know it.
Eventually, the entire fiat system shits the bed and we have a Greek moment where debt haircuts and a new monetary system come into existence. Lather, rinse , repeat.
Gold reached a temporary top at 1760. We need to correct 100 to 150 points. So, I'm comfortable to get back in between 1610-1660
DeleteBtw, we're only at 1730 as i write this right now for the record
DeleteA funny little word, the word fix. We thought that they had fixed (repaired) the problem, or were they just trying to fix the results - make it look like the Greek horse had crossed the finish line when in fact they hadn't finished at all - meaning there is some still unfinished business to do, like hand us over the reigns. Or is it like in Inside Job, the banksters just need one last fix (read junkie)- a little more debt and leverage and out we go from this centripetal funk we're in.
ReplyDeleteThe suspense is killing me. And if if wasn't so tragic I would laugh - I actually need to laugh - but these poor PEOPLE - "some 60,000 small firms and family businesses have gone bankrupt since the summer, the chief reason VAT revenues
dropped 18.7pc in January".
Now in that quote just given, I'm going to look into the different connotations for the word, BANK RUPT - of which the origins come from the words broken bank. Now we're getting a little closer to the truth.