Bank of America Tanks; Gold Goes Parabolic, No Telling Where It Stops

I am somewhat amused by the lack of commentary on the latest advance in gold. Did people sell, waiting for a correction that did not come? I do not know the answer to that, but I can see that financials have been clobbered, led by Bank of America, while gold has soared. These events are not unrelated.



Bank of America Daily







click on any chart for sharper image



Bank of America Weekly







Questions Abound



  1. Who would have believed in 2007 that a 44 cent drop in share price would amount to a 6.3% move?
  2. How long before Bank of America tests that spike low of $2.51?
  3. How much is CEO Brian Moynihan worth?




I suggest the answer to question number three is a negative number on the basis that Moynihan and former CEO Ken Lewis drove the company into the ground with excessive risk-taking and stupid-beyond-belief mergers.



The best I can report however, is that Moynihan has voluntarily reduced his bonus to $0, suffering the pain and agony of having to live on salary of a mere $950,000.



This of course brings up question number four. How can CEOs possibly scrape by on such meager sums of money?



Note: Bank of America closed down 55 cents (7.89%).



Gold Goes Parabolic



While pondering the brutal injustice of ridiculously low CEO wages, we now must turn our focus to gold.



Gold Daily Chart







This is no longer an orderly-looking move, but a weekly chart can help maintain perspective.



Gold Weekly Chart







If this is the start of gold-bugs long awaited extreme move, there is no telling where it stops.



Is it? I don't know (and they don't either).



What should be plain to see is that financial stocks, especially banks have been clobbered this year. Banks are under-capitalized, over-leveraged and realistically bankrupt. Mistrust of fiat currencies is high and rising.



Global Banking System Insolvent



For more on banks please see ...







The entire global financial system is balanced on a mountain of debt, and that debt cannot be paid back. That is the message of gold, not the popularly believed fallacy regarding massive inflation.



Is gold reflecting a chance it once again has a role in international trade? I believe so, and let's hope that happens.



Mike "Mish" Shedlock

http://globaleconomicanalysis.blogspot.com

Click Here To Scroll Thru My Recent Post List

Posted by