Run! Run!

Like rats off a sinking ship the peeps are chased out of the commodity trade. Fear…the strongest motivator of all checks into the precious metals trade. All it takes is a pinch of fear from deflation…a pinch of Greek default….a pinch of contagion….a pinch of oil collapse……and ouila you have some fast margin calls and a scramble for liquidity. I don’t like this at all. It scares me. Well at least it makes me kinda scared. It is the game you know.

The big boyz know this game isn’t going to go on forever. At least its not going to go straight up forever. I warned you that the metals trade was way too hot when silver was pushing to 50 and needed to be reigned in. Of course there were predictions that JP Morgan was going to go broke with its silver short and the COMEX was going to default and that silver was going to go to the moon. Actually all of those could happen but you may be broke before they do. Certainly if you think that JPM (the Fed) is going broke then I guess you haven’t checked lately with the ability of the Fed to print money until the cows come home. Who do you think is pumping Greece and the rest of the PIIGS right now through every back door channel?

The question that lingers is not if there is QE3…..but when and in what manner will it be implemented. There is NO CHOICE. This is what monetization is. Its not about pulling the plug on the ponzi in the middle of the game. So you have to be aware that at “some point”, an 80lb rabbit is going to get pulled. Will it save the day? NO of course not. But its going to happen and its going to result in equities catching a bid. Precious metal will respond too. Gold has more security but Silver COULD linger a tad.

Miners may work their way down to the 426 area on the $HUI so use caution.

Watch the 140.80 on the Euro/usd……if it breaks then I think we will see 139 fast. The Euro is toast and eventually will start breaking like glass. But remember…once Ben monetizes, the dollar could slide back below its previous low. EUO is still in play. Also watch YCS …..its a nice short on the Yen….and they need to sell that currency soon to prop up their manufacturing. Japan is in bad shape. Stick a fork in them…..they’re done unless the Yen takes a big hit.

Miners look like another dip but ANV just might do its own thing. It seems to move independently from the HUI.

Here is Clive Maund’s take on silver…he see’s it breaking 30 perhaps

Read more at Great Depression 2