donderdag 20 juni 2013

Warning: Deflation is on the horizon

As we know, Ben Bernanke sinked the markets yesterday and this has consequences.

As the premium on silver of some silver miners soars to 30%, we are getting to a point where mining companies are actually losing money, especially when they have mining projects in development. At these prices, nobody is going to invest in exploration companies as they would lose money in doing so.

On the other front, namely bonds, we see the U.S. treasury market decline in price while yields rise.

These high yields in bonds and mortgage yields will in turn crash the stock market and the housing market respectively, if the Federal Reserve stops its monetary easing.

These events are very deflationary, if Ben Bernanke doesn't up its QE, we will need to position ourselves in deflationary assets like cash and bonds.

Michael Pento warns for deflation in this status update.

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