I find it rather odd to see how the broader market is apparently ignoring the surge in gasoline prices as if soaring energy costs are not going to have the least impact on consumer spending in terms of disposable income or transporation costs across the entire economy.
Central Banks are attempting to ward off deflationary pressures from issues arising from massive amounts of debt in the system so what we have here is a battle between the forces of liquidity and those of debt. From what I can see of the price chart, the liquidity forces are apparently able to trump everything. It also goes to show you how utterly disconnected the stock market is from the reality of most citizens.
This rally in the equities is what is pulling silver and gold off of their lows in today's session. It is also pulling copper off its worst levels as well. If the Fed wants inflation, they are going to get it. A strong upside performance in the S&P will guarantee that the metals all begin moving higher, whether or not any fundamentals justify the move or not as hedge funds will bid up everything tangible and send those prices soaring.
The Fed had better be careful however that their gambit does not allow the long bond to drop below the bottom of its nearly 4 month old trading range. That would be a No-No for Uncle Sam for if long term borrowing costs were to begin rising, the cost of servicing this idiotic mountain of debt that has been heaped upon our nation will becoming unbearable. No doubt orders will go out to Goldman and Morgan to buy bonds if it looks like the bond technical price chart might be breaking down.
