“Do not imagine that these most difficult problems can be thoroughly understood by any one of us. This is not the case. At times the truth shines so brilliantly that we perceive it as clear as day.

Our nature and habit then draw a veil over our perception, and we return to a darkness almost as dense as before. We are like those who, though beholding frequent flashes of lightning, still find themselves in the thickest darkness of the night.”

Maimonides

Today was a volatile day in the markets to say the least.  And gold and silver in particular had been taken out and beaten over the last two days by the triumphant U.S. dollar.

U.S. equities are probably the best example of this volatile market.  Stocks plunged on the open, rallied back to triple digit gains in the Industrials, and then sold off again into the close.

The continuing drop in oil is creating quite a few concerns with funds, companies, and even nations. 

There is almost no doubt in my mind that this is the result of a game-play with the U.S. and Saudi Arabia, coupled with slack demand from emerging economies like China.  Saudi Arabia is more than likely to maintain high supply levels to spank Putin for the U.S., and they are also cleaning out the investments in oil production in the more marginal explorations and fracking that depend on higher prices.

The big news all day was the plunging Russian ruble, which is under assault on the forex markets by the Western banks, assisting with plunging oil revenues. Reminders of the Russian default in 1998 were being broadcast, although given that Russia has about 10% debt to GDP that is not much of a sovereign threat. 

More likely we would see Russian investments fail and corporate bonds default in emerging market portfolios.  In other words a commercial rather than a sovereign failure which we saw the last time in 1998 when the ruble failed and was reissued.  In contravention to the theories of MMT I might add, as short and selective as their memories seem to be.