2. Venus /Uranus already in full roll as Dow makes new highs testing the 12500 resistance with all kind of Techs flying the NDX also is above the daily Bollinger. The real stars though are Gold and even more so Silver which is going for the Hunt highs around 50 with a current level of 45. Another reason for todays rally is the message from Bernanke for a QE3 light which brings his Helicopter Bernie alias to full glory – which is a disaster for the USA and at some point also for stockmarkets. Especially foreign investors are losing money across the board and as China is already sending warnings it will have some severe consequences in the near future as this is the main driver for the real inflation not the one governments keep reporting. excerpt 1
Ben let it be known to those so addicted that he’s not going to let them go cold turkey once QE is scheduled to end. That was all bulls needed Tuesday to jam markets. Away from this, most other news was just a distraction. Monday’s S&P debt downgrade shocker is quickly old news and steamrolled by freshly minted cash (POMO) with ideas of more to come. Keeping money printing presses on high was a green light to sell the dollar which always causes commodities to rise. Why is that a good thing The Fed is also rumored to be selling puts on Treasury bonds to keep rates low combined with maintaining the bogus inflationary “core rate” to keep you mesmerized. It’s some Orwellian-speak to keep the masses happy even though they see the disconnect at the pump and check-out counter. Why no one stops this madness is beyond understanding now. Clearly, history argues low interest rates and some form of stimulus are needed to cure recessions. The Panic of 1837, 1877 and the 1930s correctly demonstrate this need. But how much is too much? “Too much” is the message from gold, silver, the dollar and most commodities. They’re screaming stop! Are you trying to destroy our purchasing power? excerpt 2
Submitted by Tyler Durden on 04/20/2011 08:32 -0400
One of the key news from the past week was that Chinese FX reserves passed a record $3 trillion for the first time, a surge of $200 billion in the first quarter alone. And with the bulk of that in dollar, it is not surprising that the recently collapse in the dollar has forced more posturing out of both the PBoC and SAFE (the State Administration of Foreign Exchange). In comments published Tuesday,Zhou Xiaochuan, governor of the People’s Bank of China said that China’s huge stockpile of foreign exchange reserves have become excessive and the government must diversify investments using the reserves. “Foreign exchange reserves have exceeded our country’s rational demand, and too much accumulation has caused excessive liquidity in our markets, adding to the pressure of the central bank’s sterilization.” That this is a not so subtle hint aimed at the dollar was confirmed earlier today by SAFE which said that the US government should take responsible measures to protect the interests of investor. “U.S. Treasuries reflect the credit of the US government and are an important investment product for domestic and international institutional investors,” the ministry said in a statement carried today on SAFE’s website. “We hope the U.S. government takes responsible measures to protect investor interests.” Alas, with the US administration solely focused on making confetti out of the US currency, we hope that China is not holding its breath too long. On the other hand, should the DXY take out its 2009 lows, all bets will surely be off and only another market collapse will be able to generate a potential flight to safety in the dollar. In the meantime, both gold and silver continue to benefit, and the only thing that appears to be able to drag down precious metals at this point is a wholesale margin call invoking cross asset liquidation.