Close X Cookies are necessary for the proper functioning of By continuing your navigation on our website, you are accepting the use of cookies.
To learn more about cookies ...
In the same category

The Great Crash of 2012?

IMG Auteur
Published : May 11th, 2012
347 words - Reading time : 0 - 1 minutes
( 2 votes, 4.5/5 )
Print article
  Article Comments Comment this article Rating All Articles  
Our Newsletter...
Category : Opinions and Analysis





Deflation fears are once again becoming the dominant emotion in the minds of traders, with banking difficulties on both sides of the Atlantic and continuing weakness in precious metals and commodities. News that the China Investment Corporation – China’s biggest sovereign wealth fund – no longer wants to buy European sovereign debt has only added to the sense of unease.

The euro continued losing ground against the dollar yesterday, and though it has rallied this morning, looks like it could test the $1.29 mark sooner rather than later. Corn, copper and Brent crude also sustained further losses, with news of a boost in OPEC production adding to the downward pressure on oil prices.

At King World News, Dan Norcini highlights the importance of the 10-Year Treasury Note as a bellwether asset as far as inflation/deflation expectations are concerned. Dan warns that a weekly close below a 1.8% yield on this instrument could be signalling that a “deflationary tsunami” is about to engulf the global economy. Coupled with Marc Faber’s warning on Bloomberg that a 1987-style stock market crash could occur soon in the event of no further stimulus from the Federal Reserve, and it seems like heading to the storm shelter may not be a bad idea.

As Faber points out, the new quantitative easing from the Fed would need to be “massive” in order to restore confidence. This is the nature of money printing: the more you do it, the bigger the doses have to get in order to achieve the same simulative “high”. Similar to drinkers who get used to two beers a night, so start drinking three-a-night instead.

What will this mean for precious metals? In the short-term, further price declines could occur alongside falls in the euro, stocks, and industrial commodities, though there’ll be strong buying support for gold around $1,550. But given all that governments stand to lose from a deflation tsunami, it’s almost inconceivable to imagine that if faced with this situation, central banks will not resort to extraordinary efforts to reflate the system. Gold and silver will confound their sceptics.



Thanks to Goldmoney from
Companies Mentionned : Metals X |
Data and Statistics for these countries : China | All
Gold and Silver Prices for these countries : China | All
<< Previous article
Rate : Average :4.5 (2 votes)
>> Next article
Latest comment posted for this article
Be the first to comment
Add your comment
Top articles
World PM Newsflow
Mining Company News
Tribune Res.(Ag-Au)TBR.AX
Notice of Annual General Meeting/Proxy Form
AU$ 4.05-1.22%Trend Power :
Corporate news
Black HillsBKH
3:41 am Black Hills Corp raises its FY15 EPS guidance
US$ 43.33-1.23%Trend Power :
Corporate news
Goodrich Petroleum(Ngas-Oil)GDP
Goodrich Petroleum Announces Private Exchange Transactions for Convertible Senior Notes
US$ 0.82+1.23%Trend Power :
Corporate news
Carmanah Tech CorpCMH.TO
Carmanah Releases Preliminary Financial Results for Q3 2015
CA$ 6.01+2.04%Trend Power :
Corporate news
Black HillsBKH
Black Hills Corp. Raises 2015 Earnings Guidance and Announces Analyst Day Presentation Topics
US$ 43.33-1.23%Trend Power :
Corporate news
Impact Silver(Ag-Au-Cu)IPT.V
IMPACT Silver Provides Update on New Capire Mineral Resource Study
CA$ 0.18+16.13%Trend Power :
Corporate news
Bankers Petroleum(Oil)BNK.TO
Edited Transcript of BNK.TO earnings conference call or presentation 7-Oct-15 12:30pm GMT
CA$ 2.44-6.87%Trend Power :
Corporate news
Cheniere Energy(Oil)LNG
LNG Bust Could Last For Years
US$ 53.04-0.47%Trend Power :
Corporate news
Callon PetroleumCPE
4:18 pm Callon Petroleum announces that the borrowing base under its senior secured revolving credit facility was increased by 20% to $300 mln
US$ 8.86-3.90%Trend Power :
Corporate news
Callon PetroleumCPE
Callon Petroleum Company Announces 20% Increase in Borrowing Base
US$ 8.86-3.90%Trend Power :
Corporate news
Comments closed