Like a bunch of rats, the paper traders have become. Nowhere to turn to except the paper game ponzi. They have to play in the casino. They must hold long positions in the casino. Many of the fund managers are required to be 90% long without anyway to hedge themselves. They also have performance benchmarks based on the Indices such as the DOW or the SnP etc…. They're trapped and they are scared shitless. Many of the smartest big money boyz such as Drukenmiller and Dalio have had it with the manipulation, but know they don't have a better choice. They know that any type of true return to normalized interest rates is impossible. They know the interest rate curve is going to invert and when it does, the music stops.
So what can they do? Actually very little as long as they are required to stay in the casino. Imagine being aware of the manipulation of gold and silver and buying the paper proxy such as GLD, knowing there is no true physical back up. They don't want to play the COMEX, for obvious reasons. They can't own bonds. We're in a 35 year bull market there. Energy? No, we have declining usage and building inventory/production…..that's not rational. You can't buy physical if you have only paper charters.
Which brings me back to the miners. They are going to be forced into the miners and when they have to rotate out of the general bubble equity market into beaten down sector then miners will be the benefactor. Do I know this with certainty? Of course not, but I think last year should have given you a glimpse just how small this sector is and just how fast our pathetic metals trade can change in terms of it fortune. Will this happen soon? I dunno…..but the setup is now there and I am not leveraged and I am very patient. I hope you understand the risk of these paper trades and I hope you own physical metal first and foremost. However I believe the miners are just beginning their paper moves. Now enjoy the beatdown since I do believe its probably not over for at least another week or two…. Hey….its the game. You don't nail these guys without taking some pain.. gl