Don’t be fooled by this Deepseek bullshit. That’s just a shiny object.
The real reason for the market pullback is the hot money borrowed in Japan, having to return home.
Once again the Yen carry trade causes chaos. The carry trade bros are HIGHLY levered so even 25 bps hike is like Mt Everest. Their borrowing costs just doubled. So they need to get the money out of the U.S., converted back to Yen and pay off the loans and lines.
All this hot money was in the Mag 7 and it’s going to get crushed today as the money comes out.
I’m not going to be surprised if gold and silver get hit too. That’s usually what happens when the margin call man comes knocking. However there is a possibility that commodities do relatively well. Including oil.
I love days like this because I’m always prepared for days like this. The days when the tide goes out and all the naked people are embarrassed.
But have no fear. In a couple of months or three the markets may be back at all time highs.
Good luck
Silver is looking pretty relentless. Despite prices rising above 14 year highs the gold to silver price ratio is still 87:1. That is just crazy. Historically the mean over the last 60 years has been 50:1–which means the price of silver is still stupid cheap. In the days when the Dollar was redeemable in gold and silver the historical mean was 15:1!
At the same time the price makes me apprehensive and uncertain about what’s going to happen in the short term. In the long term we will definitely see three digit silver. So that’s why I took out leverage on all of my physical kilo bar holdings and bought more silver ETN shares.
Gold pushing up on $3,700 is not surprising at all. With all of the inflation looting over the past four years it should be $5,000+ already. Falling interest rates and flight to safety/liquidity by financial institutions should push the price to $4,000 relatively soon.
If the knives come out for the precious metals it will be an attack on silver. Silver is still ...
