Hi O Silver! Away?

The debate is always about inflation versus deflation is the asset markets.

Silver and gold are proxies for these macro-economic sentiments.

To me the Silver prices look to be expecting inflation. I would suspect that the outcome of the so-called fiscal cliff negotiations in Congress will be inflationary. In other words I do not have confidence that our politicians will come to a major decision that actually raises taxes by much nor cuts government by much. Somehow they will paper over the problem. Kick the can, to use the prevalent metaphor.

As a trader I am looking for clues in the markets. Silver offers what I think are clues. I may be wrong of course. The outcome may be different. The silver market participants may be surprised. At least in the short term. Or even for the long term. Though I doubt that Congress will do anything of a long term solution.

Or maybe something else will move the market in a meaningful way. But IF the silver market starts going up and makes some new highs I would expect another meaningful and possibly explosive rally. Silver traders can get really crazy......

The charts.

And as I post this the headline is that the Democrats are saying that they will not present entitlement cuts to the Republicans. The Republicans must present the cuts.
It only sounds fair to me! If they want to cut entitlements they should specify how.
The Dems want to raise taxes and they have stated how much.

Round and round she goes......

gh