THE MASSIVE PLUNGE IN GOLD AFTER THE INDIA TERROR ATTACKS...AND THE CONTINUED BAILOUTS AND MONEY PRINTING BY THE FED...APPEAR TO BE PROGRAM TRADING KICKING IN AGAIN...
THE NOTION THAT GOLD IS TIED TO THE DOW IS SOMETHING THAT WAS COOKED UP BY THE PROGRAM TRADING COMMUNITY...BUT HAS NO REAL MACRO BASIS IN THE CURRENT ENVIRONMENT...
THE DROP IN STOCKS TODAY WAS COUPLED WITH A MASSIVE SELL OFF IN GOLD...WHICH IS NOW NEAR IT'S LOWS... AND GOLD MINING STOCKS ARE EVEN WORSE...
CLEARLY THE ALGORITHMS OF THE PROGRAM TRADERS HAVE BEEN RE-JIGGERED TO BASH GOLD EVEN HARDER ON EVERY MARKET MANIPULATION... LIKELY NO ONE WANTS TO GO BACK TO THE WEAK DOLLAR AND $4 GAS OF THIS SUMMER...
FOR THE US ECONOMY TO FUNCTION AT ALL...REQUIRES GAS PRICES UNDER $3...AND PROBABLY UNDER $2...
THAT WILL REQUIRE MASSIVE GOLD BASHING EVEN AS THE PRINTING PRESSES KEEP ROLLING...
BOTTOM LINE IS THAT THE US ECONOMY...AND IT'S ODD ROLE IN THE GLOBAL ECONOMY HAVE BEEN A WORK OF FICTION FOR A LONG LONG TIME...
BUT NEW CHAPTERS KEEP BEING WRITTEN...
I DO NOT QUESTION THE ABILITY OF THE FED AND WASHINGTON TO MANIPULATE "THINGS"...BUT I DO QUESTION THE ABILITY OF OTHER LARGE ECONOMIES ...LIKE THE UK AND EUROLAND...TO "KEEP UP THE FACADE" ....
WE ARE IN A MACRO-FANTASYLAND NOW... SO LOGIC AND THE LAWS OF ECONOMICS ARE NO USE TO US...
BUT GIVEN THE AMOUNT OF INTERVENTION AND THE MASSIVE PRINTING OF MONEY...WHAT COMES AFTER THE FANTASY IS OVER...WILL BE VERY VERY INTERESTING...
KEYNESIAN ORTHODOXY IS OUT OF CONTROL NOW...IN WAYS THAT KEYNES WOULD NEVER HAVE CONDONED....AND THE BREAK WHEN IT COMES WILL LIKELY BE SOMETHING OUTSIDE THE US...LIKE A RUN ON THE BANK OF ENGLAND...OR A MAJOR SHIFT IN ASIAN BANKING POLICY...
MEANWHILE...THE FED JUST PRINTS, AND PRINTS AND PRINTS...UNTIL SOMETHING OUTSIDE OF WASHINGTON STOPS IT....
