29 September 2014

Gold Daily and Silver Weekly Charts - Non Farm Payrolls On Friday, End of Month Tomorrow

"Heroes. Victims. Gods and human beings.
All throwing shapes, every one of them
Convinced he's in the right, all of them glad
To repeat themselves and their every last mistake,
No matter what."

Seamus Heaney, The Cure At Troy

Today was the first position day for the October metals contracts.  First delivery will begin on Wednesday, 1 October.

China will go on a one week national holiday for 'Golden Week' on 1 October as well.

There was nothing of particular interest in the delivery reports on the Comex for Friday, and some minor movements of bullion out of their warehouses and registered categories.

We are in an endgame.  We do not know how long it will last.  But the East is buying bullion with paper money at a fairly stiff pace.   And since the financiers have not yet figured out how to create real precious metals, just fakes and frauds of them, there will be an end to it.

The malefactors may not go quietly.  They have blood on their hands, and they will carry this mark with them, forever.  They may never be discovered or held to account in this world, if that is what God wills.  They may even continue to strut about and offer their opinions and prescriptions to their victims unashamedly.  But there will be an end to it, and a final reckoning.  To think otherwise is the opium of the powerful.  They never see it coming.

The Recovery is a charade.   The reason for this is quite simple, and it can be seen in one chart here. 

It should be no surprise that the pig men are getting carried away There does not appear to be anyone to save them from themselves this time, to raise a flag and turn them at the edge of the abyss.  Who could stop, when it feels so good to be winning.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Late Day Buying in Weak Markets

"Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity.

The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those whom they oppress."

Chris Hedges

"Narcissism falls along the axis of what psychologists call personality disorders, one of a group that includes antisocial, dependent, histrionic, avoidant and borderline personalities.

But by most measures, narcissism is one of the worst, if only because the narcissists themselves are so clueless."

Jeffrey Kluger

Stocks continued to move weakly most of the day, with the usual late day dip buying ahead of the end of the month which is tomorrow.

Nonfarm Payrolls for September are due out on Friday.

Have a pleasant evening.

What Frightens You?

Do you think that you are the only one who is ever frightened?  Are you frightened of those who are powerful, of the things that can hurt you?   Do you fear loneliness, incapacity, pain?

What frightens you frightens them, frightens us all.   But with a difference.

The difference is that they who serve the world have a harsh and uncaring master, who will never comfort them, now or in the future.  They trust in power, but they have only their only refuge in temporary diversions, oblivion, and death.  

We trust in our weakness, and God's love.  We will never be truly alone, if keep our eyes on His light, and our footsteps in His ways.   We are in His hands, always, even when we do not know it.   Sometimes we are called to be His hands, His voice, and His touch.  But most can be glad that they are not called to great acts, but merely small daily things, such as self denial, and patience, and faithfulness.

This is the nature of our warfare: we rise by falling.  This is the law of God's economy.

The Problem In One Picture: Monetary Stimulus In an Unreformed Economic System

"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker

"Most of them became wealthy by being well connected and crooked.  And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation

Trickle down stimulus doesn't work to activate aggregate demand and encourage real economic growth because the largely unreformed economic system continues to divert the bulk of the stimulus and growth to the top.  

Whatever is put in to this great economic machine, whether it be labor, materials, or monetary stimulus, the best and the most of what comes out is skimmed to the top.  This is not a bug or fault, it is a 'feature.'

This is like sending aid to a Third World nation, where the warlords take the aid for themselves, and allow only a very small portion of it to reach the people.   They take the stimulus and leave the debts.

And then there are the enablers, the professional class.   They must support any regime for it to last.  The Fed knows.  Most academics know.  Big media knows.  Politicians know.  It takes a pliant mind to ignore it, and a devious mind to rationalize it away.  On one hand their brilliance justifies their rewards and positions.  

But on the other hand, when something goes wrong, they don't know nothin' 'bout nothin', and had nothing to do with any of it.  There are lots of fabulously paid CEO's of the public trust, who in reality do nothing and know nothing, except on paydays when they know they are worth a lot.

These latest ubermench are members of the 'winning class.'   And those others, those losers, are obviously lazy, and stupid, and not favoured by the god of fortune.  

Why should they do anything about it, even for the sake of their own conscience?  Am I my brother's keeper?  And the bribes are very good, very Darwinian.  And the positions very piously taken, with pride. 

Why consider the parable of the talents, when we would be as gods?  We will write our own bible, our own parables.  And we will believe them.

So they are sitting back and waiting for the little people to do something about it first, to take all the risks, again.  Whether in war or peace, their cleverness and birthright prevails.  Only the little people suffer and bleed.  We are as wolves, and they are as sheep.  And justice is ours, to do with as we will.


The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

History Lesson

Tsar Nicholas II:   I know what will make them happy. They're children, and they need a Tsar! They need tradition. Not this! They're the victims of agitators. A Duma would make them bewildered and discontented. And don't tell me about London and Berlin. God save us from the mess they're in!

Count Witte:   I see. So they talk, pray, march, plead, petition and what do they get? Cossacks, prison, flogging, police, spies, and now, after today, they will be shot. Is this God's will? Are these His methods? Make war on your own people? How long do you think they're going to stand there and let you shoot them? YOU ask ME who's responsible? YOU ask?

Tsar Nicholas II:   The English have a parliament. Our British cousins gave their rights away. The Hapsburgs, and the Hoehenzollerns too. The Romanovs will not. What I was given, I will give my son.

28 September 2014

Bill Cohan: The Truth About the Fed

"The truth is, although both incidents do reveal something about the way the powerful and famous get away with more stuff than the rest of us, there’s no real comparison. The Segarra Tapes actually reveal little or nothing that was not already known, assuming you have a shred of understanding how the Federal Reserve banks actually work. Nor is William Dudley, the president of the Federal Reserve Bank of New York, about to get pilloried in public like NFL Commissioner Roger Goodell.

Sorry, folks, but this is simply the way the New York Fed was designed to behave. The system of 12 Federal Reserve banks, established about 100 years ago by an act of Congress following secret meetings presided over by J.P. Morgan himself at an island off the coast of Georgia, has always existed for the benefit of the commercial and investment banks that created the system, that own the banks and that control their boards of directors.

To think that these banks exist for any other reason than to serve their Wall Street masters is complete folly. It has never been so and it will never be so – as long as the current system remains intact – despite what Segarra captured her bosses talking about on tape, without their knowledge."

26 September 2014

Gold Daily and Silver Weekly Charts - It May Be Protracted, But It Is an Endgame Nonetheless

One of the more significant things that I have seen so far this year is independent confirmation from a credible source that there is price rigging in the silver markets, and that this knowledge is being suppressed by the mainstream media in the US.

You can read about that here.

I think the fact, given all the rigging scandals from Madoff to LIBOR, that there are major mainstream publications which will refuse to run an article showing evidence of rigging in the silver markets from a credible source is probably as profound as the report itself might be.  They know what is happening, and they are afraid.

So what does this imply.

It implies that powerful financial interests are engaged in an attempt to manipulate the value of certain precious metals to artificial targets. They frequently do this with certain things we know.

Dollars and bonds are amenable to this sort of financial engineering, because the financiers are able to create enormous amounts of money using their balance sheets, and with it buy bonds and other financial paper.  So they can raise and lower interest rates and other benchmarks at will provided that they can do it in secret and with plausible deniability.

They can rig LIBOR, and the ISDAFix, and any number of benchmarks, because these are creatures of their system, without a hard reference or a firm anchor to anything in the real world. LIBOR and the amount of money they have in their vaults can be almost whatever they wish them to be, as long as the people believe.

Their nemesis, however, is when they foolishly tie themselves to something external, something that is beyond their system.  Their error is when they overreach, and try to extend the mythology of their price fixing to things that are not completely under their control for any longer period of time.

Gold and silver are two such things. Yes, they can engage in all sort of gimmickry on their own exchanges where they make the rules and keep the records.  Paper and paper money can symbolically represent precious metals both in quantity and value.   Tonnes of imaginary and hypothecated ounces of bullion may be traded all day long, but without requiring a single physical ounce of gold or silver having to change hands.   The pricing has been divorced from the constraints of supply and demand.  As always, the devil is in the leverage.

Longer term of course there will be effects, very powerful effects.  The amount of actual gold and silver that is represented by their paper continues to dwindle, increasing leverage.   Physical bullion will flee their system, as it is doing already.  That which is unmined will be left in the ground. This is Gresham's Law in action. The 'bad money' will drive out the good.

And they are foolish! There is no real civic need for them to have done this. What does it matter if gold and silver are priced at 1200$ or 3200$ as long as the price increase is orderly and not a panic? All sound economic theory suggests that as the price of gold and silver increase, economic activity will increase to make more supply available.  People might choose it as a store of value, or not.  It has its advantages and disadvantages, depending on the context of its environment.  

You can say that this would cast doubts on the value of the financiers paper, but again, not in any practical sense as long as supply of metal was not constrained and the supply of money was not expanded recklessly without reference to the productive economy.  Even Greenspan admitted this.

By aggressively seeking to manage the price of the metals, by continuing to press their leverage and their perceived successes, the Banks have created a façade and blindly run to the precipice of  an inevitable reckoning, as the London Gold Pool had done in the early 1970's.

The BRICS see this hubris, like the traders who saw the folly of attempting to hold the British Pound to an untenable valuation. And they will continue to keep pounding the Banks' positions with their trades, accumulating more and more of their physical metals, until the trade is unwound, or a failure comes to stand and deliver.

This is what I think is happening. I do not think a serious market failure is inevitable. But a better outcome would require a level of humility, wisdom, and self-awareness of which our ruling class may longer capable. 

Wall Street has become maddened with greed. And by stifling all criticism and dissent, their enablers have only enabled them to go further and further, until the point of no return is reached.

We observers are almost like Harry Markopolos, who wrote of his frustration in Madoff: No One Would Listen.  We are like those who warned of the growing housing bubble, and took steps to protect ourselves from it.

We only need to abide, and if we can abide,  then we will prevail.   Their schemes will eventually fail  And in that failure there is both risk, and opportunity.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - All's Quiet On the Western Front

Stocks bounced back today, for no particular reason really.

The third GDP revision was inline at 4.6%, and increase over the prior 4.2%.  This is GDP from the second quarter! 
This is an artificial market. And the real buy and sell volumes, ex speculative poofery, are low.

The good news I suppose for Wall Street is that prices are therefore fairly easy to push around using leveraged instruments like the SP futures.

The bad news is that if we see a certain type and level of exogenous event, there will not be much to hold prices up once the day trading dip buyers run to the sidelines. And without human market makers managing the flow, the downdraft could be fairly impressive.

But timing something like this is almost impossible. This is more an occasion of knowing the types of trails which we are skiing, and not necessarily where and when there could be a specific instance of danger.

Have a pleasant weekend.