You know, the markets make so little sense, that there just HAS to be something going on that we just don’t see. I am not buying the electronic instantaneous response or robotic calls and puts altering the system. I wonder if there is a force driving the markets into roller coasters intentionally, not necessarily to political ends, but just plain disruption and mayhem. A world collapse of the monetary scheme would sure centralize banks and banking...we could all become instant serfs again, not so much politically as from a financial aspect...freedom itself..
It might be a lot simpler than that. People were expecting the Fed to announce more monetary stimulus. QE3 if you will. More printing = inflation = rising pricing. The markets have been expecting the Fed to announce QE# for a while now, and partially why the markets tanked Thursday was because of the Fed announcement Wednesday. The more people are sure the Fed will not do a QE3 the less need for inflation hedge like Gold and Silver, and of course the less likely the markets are to be goosed by cheap money.
If there is little to no inflation, and little to no growth, then deflation may be realistic. In that case, sell gold, sell silver, sell stocks, hold cash. Cash is the hedge against deflation.
Now if you want to get a little more conspiratorial about it - then you can go one step further and say that the people who want QE3 (people who control great wealth), upon hearing it isn’t happening (yet) sell their positions in a massive and obviously coordinated fashion. Deflation is the one thing this fed chairman fears the most, so, falling markets, falling gold, falling silver, falling housing might force him to change his mind, or change the numbers he looks at to make his decision, giving him reason to look at printing QE3 again.