Does anyone want to explain the run up in gold and silver?

I don't think this is about the virus. IMO, it is starting to look like the gold bugs will finally have their day in the sun.

The idea that the fed was somehow going to normalize rates and the balance sheet kept gold prices subdued for over 5 years now. With an ever expanding balance sheet and the permanence of low(even -) rates on the horizon gold is headed for a break out to new highs. I doubt we will ever see 1200 again unless the Fed decides to kill the moral hazard monster they birthed.
 
As for interest rates this week freddie mac 30 year mortgage rates bounced slightly off most the prior week's low (3.45%), which was down around the lows from Dec 2012 (3.32%) and 2016 (3.41%).

Maybe it resumes making new current lower lows .... and maybe it doesn't.
 
Yes gold and silver can be running up/down for any number or reasons. However, the last 2 weeks seem to have come out of no where. To me it was Chinese and Indian buying. However, I do not have any volume figures to suggest that volume was out of the ordinary.

I was really more interested in how you thing mediums of exchange would deteriorate in times of panic

Example

1st all electronic means of exchange would fail - 1-2 weeks
2nd actually currency would collapse in another week
3rd gold and silver would perhaps hold up for an additional 2-3 weeks
4th after about a month to a month and a half it would all be guns and roses.

Does any of the above seem reasonable or do you have your own scenario?

I believe the first to go would be credit cards and electronic transfer of funds - all internet transactions would collapse. And then as above. I am certain to be wrong about the timing but ...
 
I couldn't care less about the order...

If/when EBT, social security, and disability payments cease or are delayed for more than a weekend (a friday to monday), banks will be forced to close to prevent runs and the purge will be upon us.
 
rallymode said:
I doubt we will ever see 1200 again unless the Fed decides to kill the moral hazard monster they birthed.
More...

I don't think the Fed can. I think that window of opportunity closed around a decade to half a decade ago. Now everything is based on the assumption of low interest rates. If they tried to raise rates now, you would see another Dec 2018.

As for interest rates this week freddie mac 30 year mortgage rates bounced slightly off most the prior week's low (3.45%), which was down around the lows from Dec 2012 (3.32%) and 2016 (3.41%).
More...

When I purchased my current home back in 2016, I decided to go with a 5/1 ARM for a lower interest rate over the fixed rate (I could have always paid the mortgage off anytime I wanted to if needed). My current rate is a 2.875% and I think I'll be able to refinance it at a lower rate in a year or two. My bank currently offers 3% on a 15 year fixed. What's interesting is that the 15 year fixed rate is actually lower than a 10 year fixed. So then it makes no sense at all to go with a 10 year over the 15 year.

Regarding the currency collapse / Armageddon / off-grid survivalist scenarios, I don't think most gold bugs are predicting that will happen. I think what is more likely to happen is that the currency does not collapse, but just steadily loses value at an accelerating rate over the next few years / decades. Not sure how long it takes to play out, but that's the way all fiat currencies end...loss of purchasing power.
 
padutrader said:
Martin Pring .......

the fact that gold is going up, means that stocks are going up.

but ironically, it may also mean that stocks may make a U turn
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So.... the bottom line is that nobody knows, except through assignments of probabilities as in the post above (by Theory..)....
 
The simple answer and correct one is distrust of fiat currency, whether the $US or Euro. It is just paper or electronic zeroes added to your bank account. Zimbabwe and Venezuela are just ahead of the times.
 
ET180 said:
I don't think the Fed can. I think that window of opportunity closed around a decade to half a decade ago. Now everything is based on the assumption of low interest rates. If they tried to raise rates now, you would see another Dec 2018.
More...

The Fed cant allow the collapse of the currency because that would effectively end them. IMO, they have pulled so much consumption and yield from the future into the present to support the economy that to me the real question is how does one protect their capital going forward 10-20 years? I think the interest in capital preservation is becoming very real and a big part of chasing yields lower and forcing the Fed's hand.

If rates are going lower and the balance sheet higher then you just have to close your eyes and buy risk assets. That seems to be the consensus right now among people that need to earn some type of yield whether by mandate or necessity. I don't know how the Fed gets out of this one but one way or another this can kicking can't go on for too much longer. Stocks and RE seem more vulnerable than PMs should the fed choose to allow some asset repricing which might be the lesser of 2 evils.
 
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A very strong POSSIBILITY for the lift-off of the last couple of trading days is....

Lebanon!!

Search your own fav news sites for debt downgrade and likely default.

And since everything is connected... it throws a bit of clarity on the repo-thang in the USA... Who are counterparties? Don't take chances bank-to-bank, use the Fed!!

Good trading to all!
 
May as well mention Lebanese Pound is PEGGED to USD. Since 1997.
A strong USD adds fuel to a debt default and does not bode well for the peg.
This will likely be another example of how pegs NEVER work indefinitely.
 
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