When all reason dictates taking a strong position in the gold market, why are individual investors sliding back into risk-on/risk-off mode? Posted by James Randolph on March 22, 2011
Take a deep breath, put emotions aside, ind head for the gold market.
March 22, 2011 – When all reason dictates taking a strong position in the gold market, why are individual investors sliding back into risk-on/risk-off mode? The simple explanation is that they are clueless about what is driving the markets these days so they follow the mob, dodging back and forth between shelter and risk hoping the mob leaders have properly guessed the next market movement. But the leaders have no idea about what is going on either.
Wall Street insiders have retail investors right where they want them. With seemingly endless sums of free money When all reason dictates taking a strong position in the gold market, why are individual investors sliding back into risk-on/risk-off mode?to play with they are have the ability to move markets at will, regardless of trends. Giant hedge funds make it pay to fail and ETFs holding major market positions have the power to instantly initiate or counter movements. That poses little problem to insiders who are backed by super computers that continually monitor and analyze the minutest market details and have the ability to instantaneously initiate trades.
The individual investor, however, is left with “no capability whatsoever to understand the forces that are really driving the market," says Dan Genter, CEO and CIO of RNC Genter Capital Management in the Wall Street Journal. Although the market may move back towards the basics, the Wall Street Journal’s Mark Gongloff says there is professional consensus “that over the longer haul, the trend is … away from fundamentals.”
"The end of quantitative easing is going to be a pivotal event for the risk-on/risk-off mentality," said market analyst Clark Yingst in the Wall Street Journal. "The whole thing has been facilitated by QE." True, but you can bet your bottom dollar that the Fed will ensure the swing is in Wall Street’s favor.
Until our government gets out of bed with Wall Street the insiders will always have the upper hand. There is no future in following the mob, but the future of the gold market is all but assured.
Senior Staff Writer – Certified Gold Exchange