In the first hour of trading this morning of March 27, the TSX Venture dropped 1.54% on a mere 10 million shares of traded volume. This is significant for two reasons. One, we are now firmly below the psychological threshold of 1,000 points, below which we operate under the presumption more or less that things can’t get much worse, and two, the large drop in value relative to the small number of shares traded indicates it is higher value stocks that are leading the plunge, not the sub-nickel zombies that we are now used to seeing trade massive volumes to the downside without moving the needle too much on the S&P TSX Venture Index.
I think this is good and bad.
Bad, because the momentary exuberance that marked the first quarter of 2014 can now be said to have been a feint hope now dashed. The inclination of cheque-writers will once again lean towards a tightening of the sphincter muscles and a shortening of the arms’ ability to reach their pockets.
But good, in a sort of good medicine is bad-tasting kind of way, because absent a decisive capitulation event like a 20% loss in value of the index we love and loathe, there is no clear catharsis where we can wrap our arms around each other, sob for our mutual destruction, and begin to rebuild our woebegone entrepreneurial spirit.
The fact that this is occurring in the post-PDAC contrail is good, because we’ve seen the close of PDAC coincide with the beginning of a slide down, and so one could argue that this is to be expected. Our fortunes are always tied first and foremost to the performance of precious metals, and the loss of nearly all the headway made since the $1,187 close of December 19 last year has us wondering if we are going to fulfill the horrid prophecy of Jeffrey Currie at Goldman Sachs and see prices brought to below $1,050 an ounce in 2014.
Jeffrey Currie of Goldman Sachs should be charged with market manipulation by the SEC and the CFTC. As if those duplicitous agencies will act!
Considering the effect of his April 10, 2013 call to Short Gold! dutifully quoted as a headline by the duplicitous Wall Street Journal, we should not be the least bit surprised to see gold mirror his prediction perfectly as Exchange Traded Products and Futures Commitment of Traders Reports show a coordinated swoon perfectly orchestrated in the gold price by paper sales of paper gold.
In April, the short call preluded an equally pronounced swoon by paper traders of paper gold, a fact studiously ignored by the so-called financial journalists cluttering the blogosphere with inane and naive interpretations of gold price performance.
But we are forced to live with the hand we are dealt in large part, and so, with our fortunes tied with our hands behind our backs, we must retire from the battlefield for the moment, and hope the vultures on Wall Street choke on the bones of our resource sector corpses.
Absent a reaction from our petro-state obsessed federal government who stand idly by and ignore the carnage, the capitulation that seems to be underway will permanently damage future Canadian GDP as TSX Venture listed entrepreneurs are force to relinquish control of valuable foreign assets.
On the bright side, the resulting collapse of mineral exploration by Canadians will provide another, more visionary government to take over the sector, providing a lift to their economy that will last generations.
Harper’s apparent lip service paid to the Canadian mining sector during the PDAC conference appears to be just that. A whole bunch of blah blah blah while in the action department, nothing happens.
How about a sovereign wealth fund that puts a floor on TSX Venture prices of the best companies? Why isn’t Canada building a sovereign holding in gold, since gold mining has been such a significant contributor to the growth in the Canadian economy? Where is the federal government’s response to the rampant capital and credit fabrication of the U.S. counterfeiting machine. Why does our finance minister not perceive the direct effect of such rampant money printing on our economy and our dollar?
