Stocks and Precious Metals Charts - What Goes Around, Comes Around

 

"Please read this article carefully because I’m disclosing for the first time that the U.S. government has given JPMorgan the green light to manipulate the silver market. This fact explains the shenanigans in the silver market. It answers all the questions and exposes this tawdry affair for all to see.

The scandal recently became more outrageous. The June Bank Participation Report, as of Tuesday, June 5, along with the COT confirmed that JPMorgan’s silver short position has increased by at least 5,000 contracts in the past two reporting weeks. That is the equivalent of 25 million ounces of silver, truly an enormous amount in a two week period and about equal to all the silver produced and consumed in the world in the same period. I calculate JPMorgan’s net short position in COMEX silver futures to be between 16,000 and 17,000 contracts. JPMorgan has been the sole net commercial silver short seller over the past two weeks. That is the clearest proof yet of manipulation. A market dominated by one buyer or seller is the ultimate definition of manipulation.

The President’s Working Group on Financial Markets (aka PPT) answers all my questions. It explains why JPMorgan and the CME remain silent about allegations of manipulation. They have been given legal cover by the Working Group. This also explains why the CFTC says they are conscientiously investigating silver when it is clear they are not. The agency can’t come out and disclose silver was smashed with the full knowledge of the Working Group, so it pretends to go through the motions of investigating. What is going through Gary Gensler’s mind? Is he not tormented by the blatant silver manipulation which runs contrary to all his public utterances? Commodity law is being broken.

If my analysis is correct, what does this mean for silver from here? It will prove to be wildly bullish for the price; maybe not immediately, but on a long term basis. It sets the stage for the really big move in silver. This overt government interference in the silver market will boomerang at some point, just as every attempt at artificial price setting has failed."

Ted Butler, A Few Questions, One Answer, June 15, 2012

"A subscriber recently commented that the Oligarchs who rule Russia only wish they got to run things as efficiently as how JPMorgan and the big banks control our financial markets, particularly in the trading of precious metals. Based upon the last few days, it’s hard to argue with that. On Sunday evening shortly after 6 PM, the price of silver was taken down 10% within a few minutes on an insignificant number of contracts (1600), evoking memories of the infamous 13% ($6) decline on the May 1 Sunday evening of 2011. If the Russian criminals oversaw silver trading and not the CME Group and the CFTC they could not possibly have rigged prices more corruptly.

What makes the silver (and gold) manipulation the perfect crime are a number of elements; short term price control through High Frequency Trading, compliant regulators and the fact that most victims don’t even realize they are being had, as the sellers are mostly just reacting to the deliberately-set lower prices. It’s hard to end an ongoing crime in progress when so many don’t realize it is in progress. Worse, there are still some who profess that there is no manipulation underway. And for the few who do realize what’s really going on, what can you do about it when the regulators are in bed with the manipulators? Perhaps the options are limited, but that’s not the same as non-existent."

Ted Butler, Busting the Perfect Crime, May 24, 2013

"MENE, MENE, TEKEL, UPHARSIN. MENE; God has numbered your kingdom, and will finish it. TEKEL; You have been weighed in the balance, and found wanting. PERES; Your kingdom has been divided."

Daniel 5:26-28

Most people do not know or remember what it was like, the long years when some spoke out against the brazen and blatant price manipulation in the Precious Metals markets.  It seemed obvious.  And the facts, although hidden behind a wall of aggressively opaque denials and official coverups, were there to be seen if you knew where to look, and were willing to open your eyes and see it.

What was discouraging was the large number of people with platforms who would not only completely dismiss the facts when presented, but would ridicule and drown out those who would speak of them.  

And it didn't end there.  The web of lies about other things was growing steadily, at first resisted by some remnants of integrity, but the mass of which gradually succumbed, with the increase in wickedness and the desire for advancement and acceptance.

Ted is no longer around.  He passed on shortly before silver finally broke free from the long price suppression centered in NY and London.   He was right.  And he saw the light breaking, even if he did not live long enough to bask in it.  One of the last things he said was to express that regret.

Most of the people I corresponded with about these things are no longer around, having moved on one way or another.  Some of them met bad ends.  Most were just driven into obscurity, and finally had enough.

But they were right, on both gold and silver and other things.

Those who warned of the tech market bubble in 2002 and the housing bubble in 2008 faced similar daunting opposition.  And they too were right.  The price to be paid was regard and access, the penalty given by the power elite and their acolytes.

But, as always, what goes around, comes around. 

And this time, with this bubble, when the perpetrators and the liars and looters try to put their hands in our pockets, greased by the complicity of soft bribes and official corruption, we may wish to consider not allowing them to do it to us again. 

Stocks soared.

Gold and silver rebounded sharply from the recent price gimmickry that we often see around Comex option expirations and FOMC meetings.

It astonishes me how this can happen over and over again, and only a few are astute enough to notice, much less profit by it.  Or even dare mention it. They are not even bothering to cover it up much anymore.

It is not purely mechanical and straightforward.  The dissemination of key information is selective.   This is how a control fraud works.

VIX has fallen back into complacency.

The narratives flow now almost without interruption from the circles of power.   And the enablers, the servants and camp followers of power, spread the noxious distortions without comment, and often with aggressive endorsement.

As Bonhoeffer noted, it is fruitless to try and bring those who have fled into foolishness back to rationality.

And our current paragons have been weighed, and found wanting.

It is now as it was, and has always been.  God is not mocked — what a man sows, so shall he reap.

What goes around, comes around. Pricing antics and bluff moves aside, the writing is on the wall

Have a pleasant evening. 

Stocks and Precious Metals Charts - The Sorcerers and The Bewitched

 

"Lack of understanding and laziness may cause more problems in the world than cunning and malice."

Johann Wolfgang von Goethe, Die Leiden des jungen Werther, 4 May 1771

"The whole spectacle of the health of the global economy pirouetting on the decision of an American Banker, or perhaps more properly, the Viceroy of Wall Street, on whether to symbolically raise a benchmark interest rate, tied to an avalanche of internationally distributed paper claim checks for conceptual ephemera and political promises, must be one of the oddest things that we have come to take for granted in our modern society today.

Such is the power of the modern religion of the markets, and with those who would displace any power greater than themselves to make way for the overheated imaginings of their restless wills and fancies."

Jesse, The Improbable in Service to the Insatiable,  26 August 2015 

"At sea and on land, everyone seemed to be making money. It was a stampede of buying. And major speculators like John Jacob Rascob whipped up the frenzy.  He told readers of The Ladies’ Home Journal that 'now everyone could be rich.'  September 2nd, Labor Day. It was the hottest day of the year. The markets were closed and people were at the beach.  A reporter checked in with astrologer Evangeline Adams to ask about the future of stock prices.  Her answer:  the Dow Jones could climb to heaven.  The very next day, September 3rd, the stock market hit its all-time high.

On September 5th, economist Roger Babson gave a speech to a group of businessmen. 'Sooner or later, a crash is coming and it may be terrific.' The market took a severe dip.  They called it the Babson Break. The next day, prices stabilized, but several days later, they began to drift lower. Though investors had no way of knowing it, the collapse had already begun

As the market floundered, financial leaders were as optimistic as ever, more so. Just five days before the crash, Thomas Lamont, acting head of the highly conservative Morgan Bank, wrote a letter to President Hoover. 'The future appears brilliant. Our securities are the most desirable in the world.'   Charles Mitchell of National City Bank assured nervous investors that things had never been better."

PBS American Experience, The Great Crash of 1929,  June 1999

"It is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled seas of thought."

John Kenneth Galbraith, The Affluent Society, 1958


There is a trip to the vet with the little one in my immediate future, so I am posting the charts now, and will update any changes to them tomorrow.

Today was an FOMC day, and the Fed did nothing with rates.  

The price the West is going to pay for the egos of a few self-absorbed, psychologically unbalanced leaders and their greedy, sociopathic followers is truly astonishing.  There is only one word for it. 

Madness. 

Have a pleasant evening. 

Stocks and Precious Metals Charts - The Wages of Plutocracy Are Stagflation

 

"The good news for everyone is that nothing seems inevitable here, that there is almost always a choice, but it is often wrapped up in a nice looking rationale, with all the compulsion of a necessity, for the good of the people.  Us versus them in a battle for survival and all that.  And clever leaders on the extremes provide the 'them' to be dehumanized and objectified.  The leftist wishes to murder the bankers, and the fascist the lower classes and outsiders.  The extremes of both end up making life miserable for almost everybody except for a privileged few.

And so I reiterate that in a purely fiat currency, the money supply is indeed fiat, by command.

People like to make arguments about this or that, about how so and so has proved that the Fed does not or cannot do this or that, that banks really create money only by borrowing, that borrowing must precede this or that.  It's mostly based on a fundamental misunderstanding of what money is all about, with a laser beam focus on hair-splitting technical definitions and loquacious arguments more confusing than illuminating, lost in details.  In a simple word, rubbish.

Absent some external standard or compulsion, the only limiting factor on the creation of a fiat currency is the value at exchange of the issuers bonds and notes, and currency which is nothing more than a note of zero duration without coupon.

If I had control of the Fed, unless someone stopped me, I could deliver to you hyperinflation or deflation without all that much difficulty from a technical standpoint. The policy reaction of those who might be in a position to fire or lynch me is another matter. The Fed not only has the power to influence money creation in the private banking system. It has the ability to expand its balance sheet and take on existing debt of almost any type at will and at any price it chooses.

But that is the case as long as the Fed has at least one willing partner in the primary dealers, and the Treasury is in agreement. And even that requirement for a primary dealer is not all that much of an issue given the amounts of existing sovereign and private debts of which the Fed might avail itself for the forseeable future.

So at the end of the day, a thinking deflationist is almost reduced to the argument that 'the authorities will not allow it' or 'will choose deflation rather than inflation' And this is technically correct. However, let us consider my earlier statement about those who might fire or lynch one for making a highly unpopular choice.

It is economic suicide for a net debtor to willingly engage in deflation when they have other options at their disposal, and especially when those decisions involve people outside the system.

So it is really about making the best choice amongst bad choices. This is why governments choose to devalue their currency, either with quantitative easing, or explicitly against some external standard as the US did in 1933. Because when the debt is unpayable, it must be liquidated, and the pain will be distributed in a way that best preserves the status quo. 

Hyperinflation and a protracted deflation are both very destructive choices.  No rational government will choose either option.  They 'could' have those choices imposed upon them, either by military force, political force, or by economic force.  Economic force is almost always the cause of hyperinflation.  So you can see why a 'managed inflation' is the most likely outcome at least in the US.  The mechanism has been in place and performing this function for the last 100 years.

The problem or twist this time around comes when the monetary stimulus does not increase jobs and the median wages, because of some inherent and unreformed tendency in the economy to focus money creation and its benefits to a narrow portion of the populace.  The result of this is stagflation which although not indefinitely sustainable can be maintained for decades.

Most third world countries are like this.  A vibrant and resilient middle class is sine qua non for a successful democratic republic, and this has strong implications for the median wage.  The benefits and the risks of growth and productivity must be spread widely amongst the participants.  Oligarchies tend to spread only the risks, keeping most of the benefits to themselves.

This is essentially the reasoning that occurred to me when I looked at the US economy and monetary system in the year 2000.

The one point I remain a little unclear on is how 'hard' the law is regarding the direct monetization of debt issued by the Treasury. I am not an attorney, but I am informed by those familiar with federal statutes that this is a gray area in the existing law but currently prohibited.  But it is easily overcome as I said with the inclusion of one or two amiable primary dealers who will allow the debt issued by Treasury to 'pass through' their hands in the market, on its way to the Fed at a subsidized rate.  For this reason, and for purposes of policy matters, and occasional economic warfare, countries may tolerate TBTF financial institutions with whom they have 'an understanding.' 

Absent new data the dollar will continue to depreciate, and gold and silver and harder currencies appreciate, until the fundamental situation changes and the US economic system is reformed, with or without benefit of soft bankruptcy.

I think there are other outcomes that involve world government and a currency war, and this also is playing out pretty much as I expected.  Fiat currency can take on the characteristics of a Ponzi scheme, whose survival is only possible by continuing growth until all resistance is overcome.

This is the conclusion I came to in 2000. I admit I was surprised by the Fed's willingness to create a massive housing bubble, and the willingness of the US government to whore out the middle class in their deals with mercantilist nations — their hypocrisy knows no bounds."

Jesse, Deflation, Hyperinflation and Stagflation, 19 April 2011 

 

The political structure of society is shaping a number of economic results, and has a profound effect on the relationship of real growth and the value of the currency. 

The Fed is only faux-independent, since it is a creature of the Banks and Wall Street.  

This is why Greenspan's theory that the Fed can simulate the rigor of an external standard like gold is nonsensical economic theology.  And he knew this. 

Stocks were off a bit today.

There is going to be a correction.  Once it gets rolling it could gain some serious downside momentum.

Gold and silver took the usual post Comex option expiration hit. 

Why?  When you hold a call option that is 'in the money' you are rewarded with new long futures contracts.

And typically based on the numbers those new holders of contracts get a serious gut check before the market normalizes.

VIX is low again, and is certainly mispricing risk in my judgement.

The Dollar is still doing the sideways chop.  The DXY is heavily weighted to the euro, and the European leadership is hapless.

Speaking of which, have you noticed how so many Western leaders have abysmal approval ratings?

I have included a chart of this below.

Let's see what happens.

Have a pleasant evening. 

Stocks and Precious Metals Charts - The Rape of the Mind

 

"Easy as lying!  Do as now you do.
   Turn every question to a public stew.
A blood-shot voice, low breeding, huckster's tricks—
   What more can man require for politics?"

Aristophanes, The Knights, 424 BC

"It is sometimes said that since everything is for sale under the rule of The Market, nothing is sacred.  The Market is not omnipotent — yet.  But the process is under way and it is gaining momentum.  The Market is becoming more like the Yahweh of the Old Testament — the Supreme Deity, the only true God, whose reign must now be universally accepted and who allows for no rivals."

Harvey Cox, The Market as God, March 1999

“He said they were afraid, and that fear makes stupid people do wicked things.  As long as there are crazed or crafty leaders to play on old fears, a mob will turn cruel.”

Leigh Brackett, The Long Tomorrow, 1955

"And thus I clothe my naked villainy
With odd old ends stolen forth of Holy Writ,
And seem a saint when most I play the devil."

William Shakespeare, Richard III, November 1633

"You have accepted things you would not have accepted five years ago, a year ago, things that your father, even in Germany, could not have imagined.  You see what you are, what you have done, or, more accurately, what you haven’t done (for that was all that was required of most of us: that we do nothing).  You remember everything now, and your heart breaks."

Milton Mayer, They Thought They Were Free: The Germans, 1933-45, 1955

“He who dictates and formulates the words and phrases we use, he who is master of the press and radio, is master of the mind.  Repeat mechanically your assumptions and suggestions, diminish the opportunity for communicating dissent and opposition.  This is the formula for political conditioning of the masses.  The big lie and monotonously repeated nonsense have more emotional appeal in a cold war than logic and reason.

The eternal demagogue will arise anew.  He will accuse others of conspiracy in order to prove his own importance.  He will try to intimidate those who are neither so iron-fisted nor so hotheaded as he, and temporarily he will drag some people into the web of his delusions.  Perhaps he will even wear a mantle of martyrdom to arouse the tears of the weak-hearted.  With his emotionalism and suspicion, he will shatter the trust of citizens in one another."

Joost Meerloo, Thought Control: The Rape of the Mind, 1956

As you know today was an option expiration for the May futures contracts in gold and silver.  The May contract is important to silver, gold not so much.  I think the metals were pre-pounded last week, so today was not so dramatic.

Stocks were wobbly since an attempt to make it seem as though Iran was suing for peace, spread by a mouthpiece in the 'digital media' that was uncritically picked up by understaffed wire services, was found to be yet another dose of meth for the markets.

I don't know where things stand now, the fog of war and all that.  I have a few sources I follow that have proven to be more reliable than official media.  The US and Israel are playing it close to the chest on one hand, and posturing for renewed conflict on the other.  Iran has been much more straightforward, agree with them or not.  

VIX is acting like 'meh.'   

On the economy, Wall Street is acting as enablers in hiding the risks of recession and worse, pretending this is all 'normal'.  We are probably already entering a recession, the stock pricing notwithstanding.

In watching this all unfold in Washington and NY I was reminded of an interview between Bill Moyers and Neil Barofsky. He said of the 2008 bailouts and lack of meaningful reform:

"It creates this false illusion that there are people out there looking out for the interest of taxpayers, the checks and balances that are built into the system are operational, when in fact they're not. And what you're going to see and what we are seeing is it'll be a breakdown of those governmental institutions.  And you'll see governments that continue to have policies that feed the interests of the one percent or the .1 percent — to the detriment of everyone else."

He also said with the lack of reform that another financial meltdown like 2008 was not only likely, but inevitable.  The economist Simon Johnson said pretty much the same thing.

But very important people, who coincidentally appear quite frequent in the Epstein files among other cesspits of elite corruption, have assured us that this is just foolishness, and uninformed worry.

Have you noticed how most of the Western leaders have awful public approval ratings?  I need to look that up to see how widespread it may be.  How are they getting away with this in nominal democracies? 

Rough seas ahead, mateys.  Clouds gathering on the horizon. Perhaps its finally time to head into harbor.  I'll figuratively be at The Roundhouse Bar, a place where I sat out many a storm in happier days gone by.

Have a pleasant evening.