Tidbits
All markets rotated 180° yesterday from expectations of a stronger dollar and higher interest rates to a return to an easy money policy. The pivot of market expectations in such a few days has never happened before. It is truly a historic event. Your great-grandchildren will be reading about the events of this past weekend when they are working on their MBA or Ph.D. in macroeconomics.
On Thursday, the market had priced-in an 81% probability the Fed would raise interest rates this month by a half percent. Yesterday, the market priced 100% no chance of an interest rate increase this month.
The ag commodities were a bit reserved in accepting the turn of events, but that was not the case with precious metals, whose prices are tied to inflation and economic insecurity. Yesterday, gold was up $46+ and silver was up $1.27. The Tech Guy pointed out last evening that gold gained over $100 the past three business days. Those are monster gains, Folks.
Now that the government will not let any bank customer lose money no matter how poorly their bank was managed, the “party” will begin with more printed money, lower interest rates and smaller cash reserve requirements (banks will be able to loan a higher percentage of their deposits).