Peter Boockvar – Got Gold?

Thursday, April 28, 2016
By Paul Martin
April 28, 2016

With gold surging more than $20 and silver up more than 30 cents, today Peter Boockvar asks the all-important question to investors, “Got gold?”

Peter Boockvar: So let me get this straight, on January 29th the BoJ surprised markets by moving to a negative interest rate of .1% on bank deposits and the move completely back fires as the yen goes from 121 to 108 in the following months. The Nikkei cracks by 15% in two weeks. The only beneficiary were JGB’s. The BoJ then decides overnight not to push deeper with this policy in a show of patience to see how the January move plays out and maybe not to panic the markets again and the yen rips further and the Nikkei falls almost 4%…

Peter Boockvar continues: The pain trade in particular from January were in the Japanese banks due to the crushing of their margins and the penalty rate so what does Mitsubishi UFJ do overnight on a pause in negative rate policy, it falls 6% on top of the 5% drop in the two prior days. Mizuho Financial plunged by 6.5%. I GIVE UP! JGB’s had the muted but mixed response as the 10 year yield rose 2.5 bps while the 30 year yield fell by 5.5 bps.

Bottom line, markets are now behaving worse than spoiled little children as now it’s getting even tougher to gauge what they really want from our central bankers that are losing credibility with their monetary reputations every day. I’ll venture to guess that many are realizing that we are at the end of the road in this cycle of modern day monetary extremism notwithstanding Kuroda’s belief that he doesn’t “think there are limits to monetary policy measures.” For the action in Japanese banks today, investors were likely disappointed the BoJ didn’t go the way of the ECB in paying them to lend. Got gold?

The Rest…HERE

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