A Market on the Edge… What Happened Last Night

Gold and silver rallied last night as did shares, whilst the USD retreated.  It appeared they were celebrating the same news… The market seemed to read in a speech by Fed member Lockhart that a September hike is now off the cards, would be data dependent, and that Fed policy will still be stimulative after the first rise.  So in essence those in shares bought up thinking the party continues despite ordinary fundamentals whilst the USD and precious metals reflected low interest rates for longer.  Shares were buoyed too by a jump in Chinese stocks based on, you guessed it, a promise of more stimulus from the government.  One can’t discount the very real possibility that gold and silver also rallied on the realisation that it appears they are prepared to keep inflating global asset bubbles perilously towards the pop.  For the market to react as it did on some vague comments by a voting member of the Fed also illustrates this is very clearly not a market that has supposedly ‘priced in’ the rate rise.  This is all very dangerous territory over the next few months and is screaming to have a chunk of your wealth in a safe haven such as gold and silver.  You might think bonds are a better safe haven but note that hot off the heals of Bill Goss, last night none other than Alan Greenspan is telling us to be very afraid of a pending bubble in the bond market.  No surprise we get this quote from Gerald Celente then…

"Rarely do I ever put a date on market crashes.  I did it in 1987 when I forecast the 1987 stock market crash - in the Wall Street Journal.  I also forecast the 'Panic of 2008'; and the 'dot-com bust' in October of 1999, when I said the dot-com mania would fail in the second quarter of 2000. And now, I'm predicting a global stock market crash before the end of this year.  And it's not only going to be the Dow, but the DAX, the FTSE, the CAC, Shanghai, and the Nikkei.  There's going to be panic on the streets from Wall Street to Shanghai, and from the UK down to Brazil.  You are going to see one market after another begin to collapse."