The_dumpster_diver
Long

operation dumb-o drop (libor and moral hazard)

AMEX:GLD   SPDR GOLD TRUST GOLD SHARES NPV
most have noticed a drop in libor to rates not seen since 2009. most dont realize a lower libor discourages the holding of currency (similar to japanese 10 year yield effect).
it encourages the buying of assets. it helps improve bank balance sheets (they need the help). far overlooked this is a response to major FIC losses banks had this past quarter.
it is also a helicopter drop (discourages cash, encourages buying of assets) of artificial liquidity.
the moral hazard of operation dumb-o drop is that it masks faulty assets and encourages risker behavior.
although i feel a concentrated flow of capital to certain sectors would be helpful (encourage reducing inventories)
the zombies among us are about to get a second breath.
this liquidity will help inflationary assets like gold and silver . based on gold:silver ratios being at generational highs the bigger value is silver (physical gold swap for physical silver )
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