Stocks Slide As Economic Realities Continue to Worsen; Gold, Silver Soar

September didn't start out very well as stocks lost ground on all indices. Perhaps more concerning was the level to which yield on the 10-year note plunged, dipping to a low of 1.46% before closing out at 1.47%.

Low yields are indicative of demand, and, with some $19 trillion of government bonds globally yielding negative numbers, US bonds are attractive by comparison. This dynamic is not going to end soon, as Japan and the Euro area - the two economies with the most negative yields - are in no-win conditions, with inflation impossible to produce and a swirling drain of deflation threatening the confidence of their currencies.

If low yields are intriguing, consider the gains in gold and silver to be nothing short of demanding attention. Both metals have been on a hyperbolic flight path since May. On Tuesday, silver rocketed through the $19/ounce level, with a gain of more than 8 cents per ounce. Gold topped $1550, and is trading at record levels in most of the world. Only the super-strong dollar is keeping gold's level down, but only in the United States.

Stocks are going to continue a fluctuation with emphasis on the downside for the foreseeable future due to deteriorating economic conditions globally.

Cash is becoming king-like in many countries, with a focus on US dollars, but that dynamic will play out to flatten the wallets of nearly everyone holding hope in fiat currency. Central bankers have reached the proverbial brick wall, with nothing to save economies from crashing headlong into a solvency crisis, an immovable force from which there is no return, literally, as there will not only be no return on capital, but, in many regards - as is the case with negative rates - no return OF capital.

At the Close, Tuesday, September 3, 2019:
Dow Jones Industrial Average: 26,118.02, -285.26 (-1.08%)
NASDAQ: 7,874.16, -88.72 (-1.11%)
S&P 500: 2,906.27, -20.19 (-0.69%)
NYSE Composite: 12,663.40, -73.48 (-0.58%)