CRISISBOOM

I am sure it will most likely to take really a few weeks or even months to obtain the complete impact from the crisis in Japan. The initial surge in volatility will most likely pave the way for particular possibilities in precious metals and beyond. Any impetus coming from a renewed interest in commodities as the nation rebuilds will bring whatever trading is not boosted by fears from the total score of the disaster. It may not occur right away, but the world’s third biggest economy will restore itself like a phoenix and till then there’s feasible in these markets. Maybe not an improve in jewelry buying or something that may be deemed a frivolity, but investment option demand and provide creating in front from the demand renewal may add an outstanding deal of assistance to these markets and much more.
The S&P index is in a falling trend and just lately tested an additional level of assistance. It’s ugly and could very easily get much uglier. It’s now lost all it’s gains for the year and is now negative. The main message I want to get across today is that nobody knows what is happening for sure in regards to the nuclear plants in Japan and as such you should go into capital preservation mode.

Recall that the Bank of Japan has injected $688.3 billion into their marketplaces over just a few days. The US is only injecting $600 billion over months, not days in the form of their QE2 programs. That quantity of money was injected and still the marketplaces were obliterated and are down sturdily still even with yesterday’s recovery. The reality is buyers aren’t presently there, other than newly injected assistance funds, but selling has subsided for now at least.

The initial driver for investment in commodities is most likely to come following this round of sell-offs, which seems much more liquidity based than basic in nature. It seems as though the ignition to this flight from stocks and commodities was struck as investors sought cash. However, a shift is probably just around the corner because the traditional haven status of markets like gold takes hold. To bolster this move, it is also feasible that the rebuilding of Japan could hold much more feasible for another bull run in commodities, specifically precious metals.

The so-called commodity super-cycle was already underway, fueled by the urbanization of countries like China and India. That extra consumption and commodity demand was only weakly fulfilled by increased yields and generation for certain commodities. Sure, economic slowdowns may have put a stop in some of these market segments, but where that bearish argument dead ends, a bullish debate for the investment option side from the exact same commodities picks up.

Investors who were uncertain about the future of some stocks and some currencies sought an alternative asset in gold and bonds as a means of feasible asset preservation. Does that dry up when disaster strikes? Perhaps initially it will, but there is a long road ahead for Japan and the world markets. While certain things like oil and perhaps even precious metals will have a neutral to negative demand in the devastated nation, the feasible gains in consumption on the path to recovery and after have historically balanced that picture.

Now is an appropriate time to invest in precious metals by purchasing gold and silver. I prefer to hold silver coins and gold coins myself for safeguarding my assets in these turbulent times. Gold and silver prices are still relatively cheap.