by Andrew Hoffman
This weekend couldn’t come soon enough – as since Shinzo Abe proposed a $100 billion “helicopter money” scheme two weeks ago (after $10 trillion of similar QE programs miserably failed), Precious Metals have been under maddening (even for me), unrelenting pressure, every second of every day.
As I wrote yesterday, it can be argued that such action was influenced by the yen/dollar exchange rate’s (government-orchestrated) rise. And yes, such algorithms do exist, to try to influence HFT trading activity. However, such correlations are spurious at best, when any type of longer-term period is considered. To wit, when the Precious Metal bull market commenced in August 1999, gold was $253/oz, silver $5/oz, and the yen/dollar exchange rate 115:1. Today, the yen exchange rate is 106:1, just 8% “stronger” than 1999 – yet gold is $1,322/oz, or 422% higher; and silver $19.60/oz, or 312% higher. And this, despite the Bank of Japan maniacally trying to destroy the Yen, and every major Western Central bank trying to destroy gold and silver.