Headlines scream some Feds are unhappy with what might happen to inflation with all this printed money, gut punching what looked like rally follow through. Looks like a mighty political statement from some who want to look real smart now, just in case someone wants to think of them for that Bernanke vacancy looming Jan 14 when he "retires", a thought process a whole whopping year down the line.
Now that TWIST is over because there aren't any short term bonds to turn into long term bonds, they have to print the money, so inflation is an in your face worry, as opposed to a worry for anyone on this board who can read. You can see it on the Fed Handbook, How to take the steam out of any stock market recovery, chapter 1929.
So they also announce the US isn't buying gold anymore, and gold and silver fall like rocks, the dollar soars about ten yen off the low, and the carry trade for US bonds is looking juicy junior, real juicy, to quote Lawrence Tierney (Joe Cabot) Resevoir Dogs 1992. Guess what they'll be buying on the carry trade? US Bonds. See how that works? SOMEBODY thinks the dollar is going into the toilet, and somebody thinks they might want to risk a "strong" dollar. How do I know there is a resurgence in interest in bonds? I look at junk bond funds, which folks left in droves past week to get into equities. Equities are faltering, dividend tax rates popped but not badly (at least they are known quantities) and so it is off to the races for bond funds, and I'll just have to wait for the analysts to catch up a couple dollars late.
So silver crashes 2.75%, and another 2.75% in the wee hours, in the most obvious manipulation since I donno when. Hopefully you sold some covered calls against your stash and have mitigated the typical short bomb they've been doing since 2010. How much will we recover? We'll that's a five and one half percent drop so far, I'll let you know when the drop begins to taper. I think we have another 2.5% to go, but I'd like to see that two point five percent stretched over couple days declining.
Not that I'd like to see it decline at all. The next challenge to "inflationary fears" is the government spending cut. Although it will probably address closing off the rate of expenditures over the next five hundred years, which will amount to nothing in reality, the Chicken Littles will have the sky falling and precious metals will take a hit.
Silver should be mitigated by the industrial side, and SLW is acting 2X the POS fairly regularly, it is like AGQ for half price.