In this week’s Metals & Markets Wrap The Doc & Eric Dubin discuss:
- Yellen & TPTB preparing to taper talk of taper as the market forces The Fed to d/c the propaganda, and admit MOAR QE is coming
- As Comex Registered Inventories Continue To Plummet, Gold signaling a change in trend- higher lows a positive sign the market may be finally turning, and Asian investors are eager to buy the dips
- JP Morgan Twits Tweet: Epic marketing failure
- Retail silver shortage developing once again- 1 month wholesale delays on Sunshine Mint products- the mint that supplies the US Mint with silver blanks
The SD Weekly Metals & Markets With The Doc & Eric Dubin in below:
American investors and financial media frequently suffer from an excessive focus on the goings on with the United States. Evidence of this can be seen with the breathless reportage on the Dow Jones Industrial Average reaching another all time high, along with the Nasdaq setting up to retake the 4,000 level. It’s been 13 years since the tech-heavy index was this high. But the 1.3% rise in the Dow to 15,961.70 close is nothing compared to the veritable QE-driven fiesta taking place in Tokyo. The Nikkei rose just under 2% today, and racked-up a 5.6% rise over last Friday’s close.
The Nikkei will probably take a breather for a few days. But this week’s leap higher is the sort of move markets demonstrate when major shifts in sentiment strike like white lighting. The fast money (sometimes “smart,” but always momentum-driven) sniffs-out these shifts in sentiment and given the massive amount of global liquidity sloshing around in the financial markets, the result is exactly the sort of trading we witnessed this week in Japan, and to a lesser extent during the latter part of the week in the US.
Meanwhile, the Japanese yen looks like it’s setting up for a renewed move to the downside.
The Japanese government is intent on weakening the yen to boost exports. But a strong case can be made that both Japan and Euro zone economies are managing their currencies lower and loosening credit in a coordinated rotational move ahead of Janet Yellen taking the reigns of the Fed. With the threat of taking out the 1.40 level on the Euro now a distant memory and with a bit more weakness introduced to the yen-dollar cross over the next 50 days, the stage will be set for the ECB and the Bank of Japan to take a breather when Yellen sets the policy agenda at the Fed.
Yellen will likely push back on taper talk, and the dollar will begin a new downward cycle during the first quarter. The loss of purchasing power will be partially hidden by the debasement currently underway with the yen and the euro. Central bankers are pulling the wool over the eyes of the general public. But there’s no fooling the hot money gang piling into financial assets as a perceived inflation hedge sanctioned by central bankers.
As crazy as it might seem, we expect much higher general equities prices for a number of months. But the bond market is going to have the last laugh. Ironically enough, the fast money gang is already starting to price this in as well.
J.W. Jones at Futures Magazine took a look at the option probabilities built into the current trading of the Long-term Treasury Bond ETF “TLT.” This ETF is a very liquid, widely followed proxy for the US Treasury Bond market and traders have priced in a two-to-one probability that TLT’s closing price on March 21, 2014 will be below today’s closing price of $104.5/share. Click here to read the article.
Suffice it to say, Yellen is going to have her hands full trying to keep the bond market under wraps in 2014 — all the more reason talk of taper will prove less frequent next year.
In sum, the big story this week was the way global liquidity sloshed around the world. It looks like the fast money is starting to position more aggressively for a step up in quantitative easing and rotational currency debasement.
Parting shot: Don’t miss Dave Kranzler’s article on COMEX gold trading and the registered stock of gold depositories. The astounding draw-down continues. Click here for the details.
Thanks for listening to this week’s show. Have a great weekend — Eric Dubin
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