Archive - Apr 25, 2011 - Blog entry

The Silver market is in a bubble stage right now. No one really knows how long this will last, whether Silver goes up another $5, 10, 20 doesn`t really matter for investors who are buying the physical metal in the form of coins because when the bubble ends they are going to be sitting on a depreciating asset.

Tuesday is my 40th birthday so please be kind as you read through my comment on life, health, work, markets and friendship. I'm also soliciting advice and donations for my blog...

On almost any metric applied, QE2 ends up not only falling well short of its proposed goals, but actually turns certain metrics like GDP growth negative compared with the prior quarter, and heading in the wrong direction.

Equities (unch) managed to algorithmically outperform credit (wider) and un-sync from correlation and vol on the day amid rather tepid conditions. Up-in-quality remains in cash and synthetic credit and protection in vol seems bid again (for now).

Whether or not you like QE (yes, there are some insane people who think it’s a good idea… unfortunately they work for the Fed), this is the reality our financial system faces. Indeed, if the Fed were to quit QE for good the resulting crisis would make 2008 look like a picnic (the 2008 collapse was triggered by the CDS market which was only $50-60 trillion in size, les than one third of the interest rate based derivatives market).

Hmmmmmm...

I dreamt I dwelt in marble halls,--And each damp thing that creeps and crawls--Went wobble-wobble on the walls.

More BKTV.

You only get to shop at the store WE tell you to, and you only get to buy what WE decide you need!

The world is now moving away from the US Dollar in a rapid pace. Russia and China are no longer using the US Dollar for trade between each other. Saudi Arabia is sending representatives to China and Russia to strengthen trade ties (which hints that oil may not be priced in Dollars in the coming years). And the BRICS (Brazil, Russia, India, China and now South Africa) recently staged a conference in southern China to discuss trading in their domestic currencies rather than the US Dollar.

What do you think would do the most damage, the default of three EU nations or the collapse of Lehman Brothers? This may very well be a trick questions since the default of EU nations may very well bring on a banking collapse in and of itself.

I expect the silver bears to proclaim this recent huge move as a "blow-off" top that marks the inevitable bursting of the silver bubble. My take? Let’s wait until silver reaches the mid-triple digit range before we realistically start talking about a silver bubble.

I was lucky enough to receive an advance copy of The Most Important Thing by Howard Marks, provided by Mr. Marks himself. The following is my extensive review of the book, which will be officially released on May 1st.