08 August 2014

Gold Daily and Silver Weekly Charts - Argentina Chastised By Judge Griesa For Speaking Out

Gold has popped to over 1320 in the late hours, but found little footing there and succumbed to capping pressure that held it to the 1311 area for most of the day.

Silver managed to plant a foot over the 20 handle and keep it there into the close.

The gold contacts that have been stopped on the Comex represents a very healthy 490,000 ounces month-to-date. But as you can see from the warehouse report, the metals never seem to leave the warehouse of late. Which is a good thing, because almost half of the total gold available at these prices has been claimed. Those who want delivery of real gold go to Asia it appears.

After the bell a story broke that the New York US District Judge Griesa dressed down the Argentine government in their debt hearing today, and threatened to hold them in contempt of court.  The judge was appointed to the Court by Richard Nixon in 1972.
"The judge in Argentina's long-running debt battle with hedge funds threatened a contempt-of-court order on Friday if the nation does not stop issuing false statements about having made required debt payments.

At a hearing, U.S. District Judge Thomas Griesa told lawyers at Cleary Gottlieb, which represents Argentina, that the country has made several false, misleading statements after he ordered the nation to stop doing so last week...

Jonathan Blackman, an attorney for Argentina, said his firm was not involved with the drafting of legal notices that appeared in newspapers.

'Argentina is a state. The state takes positions and makes decisions. They are not necessarily legal positions. This is a statement of their position, for better or worse,' he said."

Reuters, US judge threatens contempt ruling in Argentina case
Argentina has taken their case to the World Court at the Hague as a issue of national sovereignty. The Hague has sought permission from the US to hear the case, asking if the US would accept their jurisdiction as a pre-requisite.

Joe Stiglitz has said that with Griesa's decision "America is throwing a bomb into the global economic system".

I seem to recall that during the Bush Administration the Executive Office sent a note to the Judiciary that they had overstepped their bounds in a sovereign bankruptcy case involving the seizure of assets and other actions that impinged on another nation's sovereignty.  The Presidency asserted that the setting and management of foreign policy rightfully belongs to the Executive Branch, and that the Judiciary had overstepped its bounds.

I doubt Obama, whom for better or worse can be seen as modern management type not strongly driven or bound by personal principles but rather by situational expediencies, would take any position that inconvenienced the moneyed interests.

But by having his DOJ signal their willingness to abide by the decision in the Hague, Obama and AG Holder might be able to accomplish the relief of this sticky international situation without overtly disrespecting the global aspirations of Wall Street. 

But the Obama doctrine for asserting Executive Office prerogatives seem to be directed at decreasing transparency and persecuting whistleblowers rather than annoying even the most egregious get-richer schemes of billionaires.

Have a pleasant weekend.