Friday, April 12, 2013

Bitcoin, Gold…then equities…Why? BURNanke and friends...

Its been a rollercoaster…a BURNanke and buddies fueled roller coaster. Its not likely to stop anytime soon, since this is the biggest experiment that the “good" professor has ever implemented. We are currently sitting in a position where fear of fiat currency has driven people to extreme heights in Silver, Gold and even into Swiss Francs…followed by runs into Oil, Equities, Bitcoin. Bitcoin’s recent collapse was a sign of a crack, in my opinon. But I want to reiterate something here now…if you look at bitcoin over the last year or so on hourly charts you will see plenty of times that it dropped 40% or 60% and has not been called a crash or a bubble. In this case it was termed a bubble because it was in the public eye and also perhaps because $200+ seems like a substantial price. The reality is that all the drops of 50 and 60% before ended up being surpassed substantially. It seems to me that it will happen again as the FED continues to screw up the financial system, their mandate and the currency.

So, Bitcoin has had a crack. Which spread to the next anti-fiat defacto currencies: Gold and Silver. Gold has had a huge drop but looks like $1,100 to $1,200 to me before all is said and done. Minimum objectives seems to be around $1,300. Silver, also is down just about 50% off its high but, not withstanding a few bounces to come, targets roughly $15 before a substantial turnaround is to occur. So, we have inflationary commodities cracking like Gold, Silver and Oil yet the most inflationary asset of them all “STOCKS” are still standing…I think the crack will happen there too…in a very similar manner. Nothing a 70 to 100 point down day on the S&P would not fix - and it seems likely to happen soon. Certainly, sooner than so many of the abundant bulls may think.

BURNanke and company should be proud…and Cyprus is not dead or gone and not fixed.

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