World markets continued haemorrhaging, and the S&P/TSX
Composite index (INDEXTSI:OSPTX) was no exception despite gold
price-driven performance by Barrick Gold Corp. (TSE:ABX)(NYSE:ABX), Agnico Eagle Mines Ltd (TSE:AEM)(NYSE:AEM), Goldcorp Inc.(TSE:G)(NYSE:GG) and Lake Shore Gold Corp. (TSE:LSG)(NYSEMKT:LSG).
Lake Shore Gold was leading the volume traders on the TSX with over 9
million shares traded within an hour of the opening bell, taking the stock up
$0.21 or 14.09 percent to $1.70 per share after it announced it would be
acquired by Tahoe Resources Inc. (TSE:THO)(NYSE:TAHO) in an all share exchage valuing Lake Shore
Gold at ~CA$945 million.
Barrick Gold Corp was the dollar volume leader among gold miners, as its
shares surged 4.14 percent, or $0.67 to $16.86, a price not seen for over a
year. Barrick had traded 2.8 million shares in the first hour of trading.
Agnico-Eagle Mines Ltd. was up 5.93 percent or $2.76 to $49.31 on volume
of 521,000 shares traded, and Goldcorp saw its share price increase by 8.89
percent or $1.70 to $20.82 on volume of over 2.2 million shares.
Gold Price will Climb in Direct Proportion to S&P 500’s Decline
While non-precious metals related stocks dragged the TSX and all global
indices worth over $1 billion lower, gold stocks as a sector will continue to
be the best performers as long as the market deterioration now underway
persists. Investors can expect the gold price to continue to surge higher as
initial central bank interventions in response to the crisis in confidence
engulfing markets fail to have any prolonged effect.
As often stated, the historically brief window of relief from 2010 to 2015
purchased by the fabrication of capital and credit from thin air seems to be
in the midst of closing, and the financial crisis of 2008 is set to resume,
notwithstanding the denial of any resemblance to 2008 by mainstream
economists and financial media personalities.
Economists Got it Wrong
If the crisis conditions now strengthening in markets evolves into a full
blown market crash, that will mean that the economists and talking heads of
mainstream financial media will have been proven categorically and
unreservedly wrong in their assessments of the effects of QE’s 1, 2, 3, and
coming soon to a central bank near us, QEver.
More importantly, among non-mainstream financial commentators, the
unwavering thesis that the global fabrication of capital and credit binge
that must come to and end simply by virtue of the limits and logic of
mathematics (since common sense has long been absent from the global
financial discourse) has been proven correct.
Investors should be asking themselves, ‘If the mainstream has been wrong
all along, and alternative observers have been correct, what else are
alternative observers accurately forecasting?’
Among the expectations investors can anticipate in that category are, in
no particular order:
- Collapse of bond prices as yields reverse course and
soar;
- Massive surges in the price of precious metals to a
near-term high above US$,2000 per ounce for gold;
- Massive plunges in the world’s major indices, with all
three of the U.S. major indices declining by over 20 percent in the year
ahead;
- Increasingly desperate (and proportionately futile)
moves by central bankers to deploy stimulus in unprecedented denominations,
and take interest rates far below zero
- Potentially, a loss of confidence in banks resulting in
a ‘run’ on banks as citizens fearfully empty bank accounts.
These scenarios are examples of ‘worst case scenario’, but looking on the
bright side – at least the total capitulation that is required for an
authentic reset of the world financial system appears to be in the process of
arriving.
