Keeping Up With News The Flow
I am deeply saddened that the distinct lack of wisdom that guides most of our species' misadventures upon meddling with forces we are unfit to wield. As someone who has intimate knowledge of human impacts of radiation exposure, having worked my way through a massive archive of declassified documents relating to the issue, I am also deeply concerned for anyone downwind of these reactors at distances far greater than the 30km zone delimited by the government thus far. This remains a highly dynamic situation that is definitely not under any semblance of control, despite the heroic sacrifice of the 50 workers remaining on-site at enormous personal risk.
Wikipedia has a pretty good write-up of the Chernobyl incident in case anyone would like to refresh their memories:
It is necessary to know whether a previous video of an outflow of visible smoke is something that continues to rise from the site. The more airborn contamination we get (and the higher that material is expelled into the air column), the more likely we are to see material move over longer distances outside of the region surrounding Japan.
Turning to financial matters, Japan's market has shed an incredible $620 billion in 2 days, and any further deterioration in the Fukushima situation could conceivably extend the decline.
As concern about the crippling economic impact of the nuclear and earthquake disasters mounted, Japan's Nikkei index fell as much as 14 percent before ending down 10.6 percent, compounding a slide of 6.2 percent the day before. The two-day fall has wiped some $620 billion off the market.
The Bank of Japan has responded with a $245 billion injection of Yen into money markets:
The move was designed to ensure that banks have enough liquidity to meet a surge in demand from companies and households seeking to raise funds.
A likely combination of the carry trade unwind, a sudden "sell everything" mentality gripping world markets, and a cunningly timed short attack form the bullion banks (the set-up for which in silver was potentially observed by Ted Butler here) have sparked an exodus from silver and gold. Mining equities will open today with a nasty decline, and I personally intend to begin deploying my sidelined cash gradually into the resulting weakness. I call the short attack cunningly timed not only because it takes advantage of the events in Japan in characteristically unscrupulous fashion, but also because it coincides with the mid-March timeframe that veteran pom investors have yet to forget in relation to the 2008 crash and other significant counter-trend pullbacks. Because of the extreme state of scarcity of available physical silver supply, however, I believe this dip will prove fairly short-lived and ultimate another great6 opportunity for investors to initiate or press their long-term long positions in gold and silver. Once the shaken-out pm investors figure out that this hit to Japan's economy carries ominous ramifications for the mythical U.S. recovery, and relate that realization the resulting inevitability of QE3, I expect both metals to resume their ascents in short order. Depending upon how events play out here, though, the pulback could potentially be surprisingly deep despite what I suspect will be an abbreviated timeframe of the setback. This notion fits within Jim Sinclair's forecast for increasing volaitility moving forward ... something I have also been caling for all along.
Ron Paul is preparing to do his part to help educate the public about the misleading nature of CPI data:
“It is unconscionable that published government statistics mislead Americans regarding the true rate of price inflation, which is much higher than commonly-reported CPI numbers,” Paul stated. “It is also unconscionable that Federal Reserve Bank officials continue to deny the effects of their monetary expansion on consumer prices. Inflation, properly understood, is a monetary phenomenon. The price inflation Americans suffer today is largely the direct result of relentless monetary expansion by the Federal Reserve over the past decade. Our witnesses will explore how current monetary policy, including QE2, directly impacts the standard of living of Americans in ways that are not reflected in official government data.”
Congressman Walter Jones, vice chairman of the subcommittee, stated, “The Fed has attempted to convince the public that its money printing campaign is necessary to stimulate America’s economic recovery. Instead of recovery, the real effect of the Fed’s money printing has been monetization of America’s exploding fiscal deficits, devaluation of the dollar, and creation of inflation in asset prices across the board. As a result, working people in places like Eastern North Carolina are being squeezed at the gas pump and the grocery store as they struggle to make ends meet in a world in which their salaries have no chance of keeping up with Mr. Bernanke’s printing presses.”
Also worthy of close tracking for all investors, despite the extent to which these events have been stricken from the headlines with all eyes focused upon Japan, are the highly dynamic events underway both in Libya and Bahrain. Many onlookers are terming the incursion of Saudi and UAE troops into Bahrain as an invasion. Semantics aside, it is a development that presents a risk of further escalation of unrest/conflict in the region. As with Japan's nuclear disaster, there is something strange about mainstream coverage of these events lately. Repeatedly looped video of supposed civilian insurgents undergoing some quirky-looking training to operate high-end 50-calibre weaponry (and presumably permitting filming by foreign journalists), or congregating at seemingly non-strategic locations out in the middle of nowhere where they are sitting ducks for attacks from the air, just don't feel right to me. I would love to know when/why CNN and other news outlets became so comfortable looping video as backdrop to on-air babble without providing any helpful context whatsoever for the images (where they are filmed, by whom, when, and explanation of that which is depicted, for i.e.). I'm not offering any conclusions, but rather merely observations.
More later ... I have to get writing. If you agree that gold and silver are the best places to be deploying cash into this selloff, let me know what stocks you're stocking up on.
Our collective best wishes for the embattled people of northern Japan, and our collective appreciation for the heroic sacrifice of those remaining plant workers.