On Wednesday, the Federal Reserve did nothing unusual and continued to promise free money longer. The attitude of throwing money at problems seems to be a weak solution. This time it is no different; the Fed will, at the end of the day, be the problem, with every stock taking locked market liquidity.
The Fed’s anticipation has created a big rebound in metals that are driving gold to its all-time high, silver to the nine-year high. This morning the stock looks weak; The recovery in metals could be slowing down and move to a period of consolidation. The recent protests have been so parabolic that the sale must be expected.
Since their peak on Tuesday, gold, silver and platinum have begun to show some weakness. Typically, the rumor was bought of what the Federal Reserve is going to do and, after the fact, the sale began. For now, we consider mass sales as a possible buying opportunity. Still, there is some concern that the size of the demonstration that could bring people back is more than we would like.
Those four magic words go through Wall Street into metals, combine to take away liquidity, and you have wild changes in the markets. “This time is different,” the phrase that has destroyed more lives than anything else in the financial industry.
It is never different, it will always be the same.
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