This cannot and will not be allowed to continue…

Stock markets across the planet are in the same predicament. So some kind of coordinated global response is coming. The question is what ? and will it save the market ?

The ‘what ?’ part of it is likely to involve interest rate cuts and some kind of stimulus package. I’m not even going to try to second guess what economic poison they’re going to come up with. It’s poison because, simply trying to goose this market higher is not the answer. A very large purge is required if we’re going to see a true reflection of market ‘value’. So much credit and debt swilling around this patients body, it’s been on life support for years. So, in my view, whatever is ‘cooked up’ by the great minds of our time, it won’t solve the issue. The issue being one of simple mathematics, and the inescapable fact that debt to GDP levels are passing a point of no return, and the monetary black hole is inescapable – even negative rates will only make matters worse.

Utter carnage in the precious metal space as well. The GDX chart is simply broken…

and yet…I can’t quite give up on it. Is it me being simply foolish, or do the fundamentals still matter ? Take a look at the Gold/Silver ratio chart…

Silver is either going to simply continue to crash (at a faster rate than gold), or that upper resistance line will prove to be important. We’ll know the answer to that next week. Something we found out this week though (and just about the only crumb of comfort I can find at the moment). My old friend the ‘Do(o)med’ US Dollar chart is back on the table…

I keep coming back to this chart. I know I’m in the minority, but, just imagine what might happen to the DXY if it becomes clear how fragile things are in the US, with the Fed having to change their guidance from ‘everything looks ok’ to ‘everything is a sham and we need a package bigger than anything we’ve ever seen before, including negative interest rates to try and keep this charade going’. How will precious metals react then I wonder. Worth careful consideration I’d say.