With recent news from Saudi Arabia, Nigeria and Russia, it is clear the Petrodollar is dying. How will this affect the Gold and Silver markets long term..
The swap transactions potentially create a mismatch at the BIS, which conceivably ends up being long unallocated gold (the gold held in BIS sight accounts at major central banks) and short allocated gold..
Putting an extra $14 trillion on top of normal government spending into a $20 trillion economy is a massive sugar high. It wasn’t a free lunch by any means; the national debt went up accordingly. But it still had a short-term stimulus effect.
Metals markets are caught between fears of Federal Reserve tapering and the forces of inflation. Price levels continue to rise in the U.S. and around the world.
It’s my predilection to believe that the Fed not only will not taper but will eventually be forced to increase the amount of money it is printing, I believe we’ll see the mining stocks outperform the general stock market by a wide margin over the next 12 months.
Compelling data in recent Commitments of Traders (COT) reports point to the emergence of a very large buyer in COMEX gold futures -- as many as 40,000 COMEX gold contracts, the equivalent of 4 million ounces of gold.
Now is definitely NOT the time to give up and dump your physical precious metal and/or your mining shares. Instead, you must believe your own eyes and intellect. Inflation and stagflation are here to stay..
If the Continuum continues we’ll see yields halt at or about the red limiters before some future exploration of the deflationary downside once again as the current inflationary operation unwinds.
