Ay, my precious (metal)

Silver takes the gold, breaking through the $20 an ounce mark on July 4th, rising over 5% on the day, only to be beaten back slightly overnight.

The precious metal has risen 48% this year, while gold is up 28% since Jan.1.

Gold is at all-time high in many currencies around the world.

This is a round about way of explaining how broken the world’s major economies really are. As I wrote last week the amount of “liquidity” injected into the markets on Monday And Tuesday post-Brexit, was not really spoken about.

Market pundits suggested that the equity reaction (bounce back) indicated that Brexit was a non-event.

This is hardly the case, with more than $1 trillion “liquidity” sloshing around, all that cash needed to find a home so global banking giants, who were the recipients of the central bank largess put it to work in the market.

This is the same mechanism used during the “booming” QE days. Trading desks got fat on easy profits as the cost of capital is nil.

Need further conviction on the broken economies, the US 10-year is hovering at 1.35%, with the 30-year at 2.15%. Pretty soon you’ll be able to make a profit off a new mortgage.

The rush to 1.3% on the 10-year versus a -.01% in Germany shows what the post-Brexit flight of capital out of the continent means for the troubled European Central Bank and the EU in general.

The post-Brexit ramifications will be ongoing and very difficult time for European banks, including Deutsche Bank, which is looking at hitting another 52-week low Tuesday in the US.

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