Those who follow the stock market know that it has gone down for the past four days. I had sold my silver on Monday and so suffered a 6% loss, but the white metal has since fallen significantly. SLV, the silver index ETF, fell nearly 12% today alone. I had been holding AGQ, the 50% leveraged silver ETF, but since I sold early on Monday I did not suffer too much. The AGQ is down 23.4% today alone. Overall, the declines (except for silver) are nothing compared to '08's.
I was expecting a silver shakeout but did not expect the declines in oil prices and the stock market that have occurred this week. The Comex's raising of margins on silver partially explain the sharp declines. In truth, the silver market had gone parabolic and had to correct.
Is this the end of silver as the crash in 2000 and 2001 was for tech stocks? No. Commodities do this. Inflation will overwhelm market psychology until the Fed decides to raise interest rates and the market overcomes the long term upward trend, which won't be for a few years at least. Silver has fallen below its 50 day moving average but it is still above its 200 day moving average. When it tests the latter I will get back in.
The S&P 500 index of large companies was down nearly 1% today, and the Dow was down more than 1%. I am still holding the gold ETF, GLD, and the Deutsche Bank commodity index, DBC, and these are down (DBC by 6% today). Overall, my portfolio has fallen about 2% this week. That does not include my Australian dollar account, which is down.
What is causing the week-long declines in the stock market? The unemployment numbers have been bleak, once again confirming the utter failure of President Barack H. Obama's economic policies. But the decline in the Dow is steeper than one would have expected. This is especially so given the good news about Osama bin Laden on Sunday night.
It seems obvious that the market is reacting to President Obama's recent release of his birth certificate. It isn't that the certificate is bogus; the problem is that Obama evidently has played a ridiculous, three-year game of cat and mouse. What kind of psychotic would be motivated to play such a game? Why did he insist that there was no vault copy, then release the vault copy? America is in the hands of a mental case, and the stock market knows it.
Update: It dawned on me that the stock market crash in tandem with declining commodity prices suggests that some sellers are afraid of deflation. It would seem that falling oil prices would be a boon to the economy, but the view that all prices will simultaneously fall in tandem with increasing unemployment is one of the Keynesian myths to which many in the financial community adhere. Hence, it would seem that this fall is something of a short term buying opportunity.
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http://www.theatlantic.com/national/archive/2011/05/the-longest-war/238334/
The above article is one more example of the Democratic Party's left wing claiming that anyone who questions Obama is a racist. The Atlantic Magazine is passe. Publishing this tired claim, which comes right out of the dirty tricks manual of the Democratic Party, reduces the low level of respect I have for the declining publication.
One of the funnier claims in the article is that Michelle Obama is just like thousands of other women across the country. Yeah, thousands of Black women went to Princeton and are millionaires.
Perhaps the Atlantic Monthly also believes that anyone who questions Obama's giving $12, $14 or $25 trillion dollars to Wall Street is a racist because, well, in the past whites have complained about Black's receiving welfare, and the trillions paid to Wall Street are a form of welfare.
So anyone complains about Obama's being on Wall Street's payroll is a racist.
Moronic.
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