Thursday, February 4, 2010

The Tight Money Supply Market Crush; Gold Down Near 4.0%, Oil Down 5.0%

Only tight money suppply can explain today's major market swings of a down stock market, down gold, down oil and a strong dollar.

Shortly after noon, here's the picture of today's trading:

Dow 10,060 -210 -2.05%
Nasdaq comp 2,143 -48 -2.20%
S&P 500 1,071 -26 -2.35%
GlobalDow 1,869 -48 -2.49%
Gold 1,068 -44 -3.96%
Oil 73.11 -3.87 -5.03%

Meanwhile, the dollar index, DXY, is up 79.94, +0.57, +0.72%, to a seven month high.


  1. Can anyone account for the massive spike in gold today? When I randomly checked at around 11:00 it was UP over 5% to 1176 and two hours later DOWN over $100. Cold feet from big buyers? Plunge Protection Team antics? Interesting times we're living through...

  2. You called the stronger dollar months ago. How many others did that?

  3. Wenzel is also one of the few in the "Austrian Camp" that has been bearish on gold.

  4. "...Market Crush..."??? Even after todays 2%+ drop none of the major indexes have declined even 10%. After the 60% increase since March, 2009 this still looks like a normal correction. Historically this suggests the major indexes could drop 10% to 20% and then continue the uptrend.

    The fundamentals are simply not clear enough to know how much "toxic debt" is out there, nor how it will effect the economy. So far the equity markets are responding well within histroical norms. The term "market crush" may be a little premature.

  5. Bob, I have to admit, I was skeptical that gold would take such a hit. I have a new respect for watching M2.