The Freeman's Burden:

To defend the principles of human liberty; to educate; to be vigilant against the ever expanding power of the state.

Thursday, March 20, 2008

Don't let the Commodity Sell-Off Fool You

The financial problems revealed at Bear Stearns that may exist at other firms as well has inspired a general deleveraging of investments of all kinds to pay back loans and lower the level of leverage from ridiculously high levels. This has resulted in the selling of everything, whether it is gold and silver, commodities, or stocks. When you can’t sell what you want to sell than you have to sell what you can sell, and normally what tops that list are your winning positions. Gold, silver, and oil are among the few things that have done well for several months and their much anticipated correction came today. The only question now is how long will it last before their bull markets resume? With more financial problems evidencing themselves so frequently it can’t be long before people return to the only real money of gold and silver, and that is just one of many reasons driving them higher.


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