In technical terms, that's a "Death Spiral" formation if I ever saw one. What this means is more bailouts or Fed-sponsored mergers are just around the corner, requiring ever-increasing quantities of financing. Up to now the Fed has relied heavily on swapping Treasurys in exchange for worthless securities that otherwise have no free-trading market pricing mechanism.

This support mechanism has worked well so far draining about half of the Fed's assets in the process, leaving little room to continue bailouts in this manner. So a new source of funding will be required soon and this will very likely force the Fed to print Dollars out of thin air to keep the ship afloat.

If you think M3 at 18% annual growth rate and the rampant ensuing inflation in commodities & PMs is bad, just imagine how quickly things go bad for poor Joe Sixpack when M3 hits 25% or 30% and takes inflation to a whole new level. Gold & Silver are going along for the ride and will set new multi-decade highs in the coming weeks, possibly as soon as early Summer.

These are the consequences of a Central Bank collective that are Hell-bent on keeping the system afloat at any cost, as Jim Sinclair has warned us so many times. Money supplies will explode all across the globe ensuing plenty of liquidity will be on hand but the good news for us is this sea of cash will also spill over into the Juniors taking them to new heights. Anyone who suggests you should avoid parking $$$ in juniors because they might not be able to raise capital due to a credit crunch, is full of it. 'Nuff said.

ESL