I've asked before about the gld/slv ratio and about what is significant about it. You answered it's all about liquidity. Well if that is true, what is the definition of liquidity? It probably has something to do with money available for investment, but can't the government make all the money that is needed by making a few electronic manuevers?
And I might as well make myself look even more stupid by asking what is significant about a rising or falling gld/slv ratio and why choose this ratio to show rising or falling liquidity.
Please spell it out for me and it might help some of your other subscribers who can't spend alot of time thinking about investments." --FM
I have used this theme of 'levers' before. Prechter, when you see him on CNBC is a lever. Public opinion is a lever. Bearish and bullish activity are levers. Whatever puts Dear Leader in a position to inflate is a lever to said inflation. Do you think Bernanke can panic with tech stocks screaming and interest rates ramping?
Why do you think I obsess on Treasury yields? Because Ben was powerless last spring when the bond yield was at the top line (monthly EMA 100). The decline in yields since then has given him back his mojo and helps put him squarely back in control, stock market relief rally notwithstanding and should he choose to exert that control.
Indicators like the gold-silver ratio and associated indicators of draining liquidity are an inflationary policy maker's reason for being. Ironically, deflationary environments can be the triggers or 'levers' to coming inflationary policy.
Why can't I write simpler? Does this make sense?