I just posted this comment on the NST thread. I think it deserves coverage here as it sums up a little of what Roubini was trying to explain two weeks ago..................
"What we had before the 23 March 2020 when the Fed stepped in to bailout the everything bubble was a US$ liquidity crisis. Equity prices were crashing because they were unsustainably high and US treasury yields were rising as people sold them to go to cash (never happened before like this). There was literally nowhere to run (not even gold stocks, remember NST fell below $9). Gold was also being sold off to fund liquidity requirements (find cash).
There was not enough cash in the system to back (liquidate) the sale of all the overpriced assets that people wanted to sell. Now that the Fed has printed trillions and trillions to fill that gap and is buying all the junk at noncommercial rates, the market is taking that money and pouring it back into markets and gold. The real economy in the meantime is crashing and huge contractions in GDP will put unbelievable pressure on the system once again once they filter through. The bubble has been reflated but it won't last. Eventually markets will fall badly again and people will again rush to cash, selling everything (including NST and gold). So as this cycle of faux wealth continues the market will grind lower and lower and people will finally begin to realise that what they continue to rush to for safety, fiat currencies are becoming more and more into supply. It becomes a balance between the value of "things" and the value of cash. Cash inherently has no value remember, it's just a medium of exchange, a promise to pay for things in the future. Each time the cycle of money printing happens with the next fall in asset prices the value of things actually falls further as the currency is debased. In this scenario it is a race to the bottom and we will measure that race by which real tangible assets lose the least value. Gold historically performs in these situations but as we have seen not all historic norms work all the time, ie as is evidenced by bond yields rising instead of falling against the massive risk off event in equities. Gold equities may out perform other equities in this situation but will and can not escape the collapse of the bubble if already overvalued. Just look at the price of NST. With gold approaching new highs in USD terms it's still below its previous bubble highs before the banksters ladened it with debt at the top of the bubble. If you believe in gold's ability to perform, why not buy gold and move away from the risk in equities altogether? As is evidenced by some comments here the reason is that most people are still operating in the old paradigm, ie gambling on volatility, gambling on the Fed printing presses rescuing the bubble and generally not treating the situation with the caution it deserves. Esh"
