The huge price drops in silver and gold can only be explained by substantial hedge fund selling that smacks of credit crisis panic. Each component of a procedure should be delineated and explained so students can understand why each part is important. This means you are investing on 3 or 5 different market days per month, instead on 1. So with 5 different schemes you can invest on 60 days in a year. Are you investing on somebody else’s idea? Many investors ask questions of banks, financial advisers and other institutions which seems like a good idea on the surface. Then suddenly it dropped like a rock. These are a kind of mutual fund that invest predominantly in equity like any other equity mutual fund and come with a lock-in period of three years. The pundits were quick to come up with possible explanations. The rumors of a possible 60% haircut on Greek debt (reported by the Helicopter Economics Investing Guide on Monday and in the financial pages throughout the EU on Tuesday) may even be optimistic.

At this point, anyone who isn’t in a coma should realize a Greek default is inevitable. ELA is only for emergencies, so its use indicates that Greece is teetering toward default. Greece’s central bank activated the Emergency Liquidity Assistance (ELA) program to help its struggling banks stay afloat. The Bank of England also announced that it was extending a swap line to the ECB. The swap line allows the ECB to borrow British pounds at low interest rates in order to maintain liquidity in the Eurozone’s banking system. This could affect your bottom line as an investor. This is an advantage to the beginning investor since it is safer than investing in a single stock or some mutual funds; plus there is a history of double digit returns. Any time there’s a potential for high returns, there’s also a potential that someone will attempt to take advantage of investors seeking those returns.

There are approximately 3.5 million people reaching age 65 (not all of whom retire and many of whom didn’t work) and only about 3.2 million students graduating high school currently (eventually most of them enter the labor force). When the economy is strong, people on the margins go out looking for jobs. And without the natural gas shale fracking giving us the green prop, oil would probably be even higher, if the economy could stand it. For the labor force to drop by millions indicates an extremely weak economy. It would be highly unusual for the labor force to decline at all during a recovery. If the labor force hasn’t dropped by as much as the BLS claims, then the unemployment rate is in the double digits and this also indicates no significant recovery has taken place. But we are going toward a global secondary recovery cost norm (think bypassed oil, shale and other “dreg” oil). Since elections are held everyday, and because voting is not compulsory, the voter turnout everyday is very low.

After this, a rally will follow and there should be a test of the low. Regardless, there was no good reason for a market rally from this “recapitalization you can believe in” piece of news. Adding juice to the rally was the news that the German and French had a plan to recapitalize the EU’s crumbling banking system. Between 3:30 and 4:00PM Central European time the DAX, the major German market index, lost around 250 points. The DMI technical indicator gave a sell signal for SLV on the daily charts today and was about to do so for the major gold ETF, GLD. ECB president Trichet admitted today that the EU’s debt crisis has become systemic and has moved from the smaller countries to the larger ones. The EU banking/debt crisis has no easy solutions and will have an ugly ending of some sort despite the mainstream media’s constant stream of upbeat “things are getting better” articles.