29 May 2013

Gold Daily and Silver Weekly Charts - Coiling, Coiling...

“Asked to do too much, for instance to accommodate misguided fiscal policies, to deal with structural imbalances, to square continuously the hypothetical circles of stability, growth and full employment, then it will inevitably fall short." Those efforts cause it to lose “sight of its basic responsibility for price stability, a matter that is within the range of its influence.”

Paul Volcker, Fed May Fall Short

Stocks are starting to look 'toppy.'

Things around the world are 'shaky.'

The setup for a major short squeeze in the metals is in place.

So let's see what happens.

Russia is drafting proposals with the G20 on 'transparency in the raw material markets.'

Matt Taibbi has a new critique of the kleptocrats and their enablers titled 'Mad Science of the National Debt' that is worth reading.
"Guaranteeing that Chinese bondholders would get paid off before veterans or elderly citizens waiting for medical care is politically a weird enough idea to begin with, but for the House speaker to think that getting Congress to prepare the government to behave like a bankrupt business would reassure the markets about the stability of U.S. sovereign debt is pure lunacy...

Essentially, all of these central banks are creating vast sums of money and thrusting themselves into the world economy as gigantic buyers of stuff, be they mortgages or treasury bonds. In theory, the banks will eventually "sterilize" or reverse the process by selling off all this stuff they've bought and draining the economy of its "excess liquidity," but no one knows when that will be, and for the time being, QE is pure financial steroids.

It's stimulus on a much bigger scale than Obama's recovery program, it's open-ended, and it's not voted upon. In fact, apart from the fact that the Fed chairman is nominated by the president, the actions of the central bank are not merely undemocratic but intensely secret, with minutes of its Federal Open Markets Committee (which debates decisions like the raising of interest rates or QE) only released three weeks after decisions are made. The Fed therefore never has to engage the public in real time about its decisions. Instead, it hands down edicts, and Wall Street watches for clues into its mysterious behind-closed-doors deliberations..."