28 January 2015

Gold Daily and Silver Weekly Charts - Fear Trade and The Sickness Unto Death

“The greatest hazard of all, losing one’s self, can occur very quietly in the world, as if it were nothing at all.  No other loss can occur so quietly; any other loss - an arm, a leg, five dollars, a wife, etc. - is sure to be noticed...

What we call worldliness simply consists of such people who, if one may so express it, pawn themselves to the world.”

Søren Kierkegaard, The Sickness Unto Death
There seems to be a vacuum in the world economy.  And it is probably being created by the black holes of economic policy and monetary thought that are centered in Washington, New York, Berlin, Tokyo, and London.
Speaking of lukewarm, ambiguous shit, here is the 'money shot' from the Fed statement today:
"This assessment will take into account:
  1. a wide range of information, including measures of labor market conditions,
  2. indicators of inflation pressures and inflation expectations, and
  3. readings on financial and international developments."
The individual reactions to the statement depended on which one of these three measures you chose to focus.

If it was number 1, the report seemed hawkish, because earlier the Fed referred to 'labor market conditions have improved further, with strong job gains and a lower unemployment rate.'  Between that and rosy expectations for GDP, and some see the Fed moving as early as June.

If it was number 2, the statement was dovish.   Inflation is hardly an issue, with disinflation and downright deflation being more of an issue.  And certainly the dollar needs no help from interest rates.

And if it was number 3, you joined the mad rush into Treasuries, taking the 30 Year down to a record low.  It holds out the fear/hope of international troubles with the dollar being waved as a safe haven. 
By the end of the day it was the fear trade that prevailed in stocks and bonds.
And you might wonder that gold did not participate in the safe haven move.  And unless you have been listening to what I have been saying here, you will not understand it.  The Western central banks are loathe to allow gold and silver to run free, because it would hamper their fiat financial engineering.

That their schemes will collapse on their own is probably a good bet.  But they are more than willing to expend their energies on hiding their mistakes in the meantime, rather than fixing the real problems.
No wonder the vast portion of the world that is not among the 'attendant nations' to the New American Century is recoiling in disgust from the antics that the Fed and its Banks have been playing with the dollar.

In summary, to paraphrase Samuel Johnson, 'The Fed is an ass.' 

But like most of their financial sector, I do not think it to be a benign influence on the real economy.  The Fed, and the banking corporations that have risen up around it, are like a cankerous sore, an abscess that needs to be lanced.

Like the privileged class has learned from their earliest days, when you have screwed a good thing up royally through your own greed, pride, and serial stupidity, the thing to do is lie, cheat, and steal and above all, lawyer up, sow confusion, and then deny knowing anything about everything.  As a matter of fact, you are not sure that you were even there, or what words mean anymore.

Have a pleasant evening.