The news this week that the ECB is going to move interest rates into negative territory is just one more example of something seemingly unthinkable a few years back now not only seeming normal, but in fact becoming the justification for conventional stock markets soaring around the world. I realize that most of us stock market skeptics have had things wrong for too long to remember, but the fundamental fact that central bankers still feel that inflation is too low, coupled with their own belief that they can control, or levitate, markets as they desire, will at some point provoke more fear than greed among speculators. The planners are not invincible, there will always be a tightening, and the law of unintended consequences has not been revoked.
The spokespeople for corporations, mega banks and the government are telling me that the labor picture has recovered to where it was nearly SEVEN years ago, conveniently forgetting to count people who have left the workforce -- since we all know Americans save so much that anyone leaving the workforce must be doing so voluntarily. The Orwellian freak show called the "Recovery" continues -- hope you enjoy the show.
In the precious metals markets, gold, silver and mining shares are still scraping along the bottom, even as silver coin sales for May were higher than the same period last year, remaining quite strong. Real physical demand for real physical metal continues. Of course it is not the main driver of price. Paper, or electronic speculators maintain a bearish posture that, while not quite a record, is still remarkable, especially given the news from the ECB noted above.
Meanwhile, US equity markets continued to move on up into all-time record territory this week. Bullishness among smaller brokerages and retail investors likewise remains near all time highs, while the VIX, or measure of fear in the markets, nears an all-time low. Yes, this overvalued, overbought, overbullish condition can go on for longer than many of us whining nay-sayers think possible. But, at the same time, facts are stubborn things. It is a fact that this equity market rally is closer to the end than to its the beginning. I'm sure many believe that they know when to get out, or that this time is different. But to me, it never is.
