The recent indictment of several traders caught manipulating the precious metals markets was met with a relative shrug by the overall markets. Evidence that inflation is not only on the way, but already here, continues to mount.
There is so much perception masquerading as reality right now that it can be easy to forget that, in the end, all of the Fed gamesmanship and market manipulation will fall away and we will be left with the true underlying values of assets.
Gold and silver, the most reliable stores of value there are, are the best bets to come out on top when the dust settles and the rest of the investment world is left to nurse a monstrous risk-asset-bubble-deflation hangover.
The grain market, soybeans, corn and wheat have seen a substantial rally, confirming that the inflation monster is beginning to infiltrate the commodity markets.
In terms of inflation, it is not a case of something that is coming; inflation is already here.
Right now may be the perfect time to look at precious metals, which are offering a tremendous profit potential.
“Any rise in short-term borrowing costs on dollar markets resets rates on $5 trillion of dollar banks loans.”
As American companies who have served as international lenders repatriate their dollars to avoid Trumpian penalties, the three-month Libor rate is soaring.
Who cares, in America, at what rate London banks loan money to each other over the short term? Many US debt vehicle rates are directly tied to it:
A third of all US business loans are linked to Libor, as are most student loans, and 90pc of the leverage loan market. Stress signals of the global credit system are flashing amber. The offshore dollar funding markets that lubricate world finance are facing an incipient squeeze.
The three-month rate for dollar Libor (London Interbank Offered Rate) used to price a vast nexus of financial contracts around the world has spiked to a 10-year high of 2pc this week,