Thursday, May 06, 2010

Revenge of the Masters: Cyber Meltdown - Gold above 1200 TNR.v,, BVG.v. BVA.v, KTN.v, EPZ.v, RVM.v, ASM.v, BTT.v, GBN.v, HUI, XAU, GDX, GG, NEM

Whether it is a revenge of Government Sachs or "just" a Quant Cyber Glitch is not so important - we have another the most important message today: Gold has officially became the New Reserve Currency of choice. With melting down market, when nobody was sure what was happening, Gold stood Long and Strong. In a sharp contrast to 2008 panic, when everything was sold for the run to safety of US Treasuries, this time Gold finally became the safe heaven.

Rise of the Machines multiplied by Greece fear have send another important message - if somebody want a strong US Dollar they should be ready for the chart above. Strong dollar is the Deadly Deflation Spiral - it is Spring 2009 all over again in a fifteen minutes of trading day. Yesterday's pictures of social unrest in Greece and today's "Fat Finger Cyber Glitch" will leave strong memories and Inflation will the most welcome outcome. Another important point - it is easy to be done and QE will be all over again.

Please note that all markets: FX, Stocks and Bonds have been contaminated with panic from Cyber Glitch in U.S. but TSX has much less dramatic move and Gold stock were strongly up by the end of the day.

Please be sure that troops are ready and money flood will be open again, it does not mean that the market will not have a correction, but it means that monetary base will be expended again even to a greater extend and this means only one: Inflation - Gold was screaming today about, Commodities, Oil and Energy Metals: Lithium and REE to follow. Trend to diversify from ALL Paper Fiat currencies into the real things started by Chinese will be accelerated.

Cyber Meltdown: Dow is down almost 1000 to 9900 in fifteen minutes. Somebody for a Strong Dollar? Deflation Spiral is back - wait for Ben and Helicopters...This time Gold is not fooled around and retakes 1200 again. Next week will be crucial for Gold: will it be a Double Top or break out to the upside?
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