03 December 2015

Gold Daily And Silver Weekly Charts - Falling Dollar, Hidden Risks

Gold and silver had some nice bounce backs today, with the dollar falling sharply on what seems to be a 'sell the news' phenomenon with regard to US interest rates, and the cut in rates by the ECB.

As usual, The Bucket Shop delivered no gold.  And there was the usual seepage of actual bullion out of their associated warehouses.

In case you have not noticed, gold is rather oversold, and the sentiment indicator is 'washed out.'

I see others are pondering the unscheduled exit of Ms. Harriet Hunnable from her post as the Executive Director of precious metals at the CME which I highlighted here yesterday.  I would rather not speculate about this further, until we obtain a little more information.  But it did appear noteworthy.

As for interest rates, which is the big tickle of the day,  the betting that the Fed will raise rates in December is a rising tide.

Speaking of the Fed, apparently there is an eyebrow-raising study from Duke University that suggests that the Fed is a leaky sieve of non-public information to a select group of insiders.  The Fed has not commented on this, issued a denial, or otherwise taken it up.   One leaves that sort of dirty lifting to the servants, and of those the Fed has many.  It never hurts one to be able to operate on a relatively riskless, cost plus budget.  It attracts a fair amount of sincere admirers, sycophants, and aficionados.

I am not suggesting anything nefarious here necessarily. And I am not sure that they are either.  It may just be more of an accepted custom unknown to those unsophisticated ingénues like you and I who do not regularly rub elbows with the ruling elite in their halls of power.

Evidence shows that Congress and their staffs tend to traffic in insider information with some regularity as a kind of droit du seigneur for all confidential information.   After all, information is power, and a medium of exchange in Washington and Wall Street. So why would those with their fingers on the very buttons of monetary power be an exception?

And besides, how can the Fed possibly make any decisions without first conferring and consulting with their true masters, the Big Money Banks of Wall Street?  The Banks.  Our modern Prometheus. Can anyone suspect that those paragons of virtue and selfless efficiency could possibly be doing anything irregular in the markets to further their own monetary interests?

I have written about this phenomenon, which is the major impediment to meaningful financial reform, intraday here.

There was a little noted piece out by my friend Hugo Salinas-Price titled The Crumbling World Order and Who Will Pick Up the Crumbs that I am still mulling over, and reading it in conjunction with a few other things in a similar vein.   I am thinking quite a bit these days on how the evolution of the international monetary regime may progress.  

I am certain that you have heard that the Chinese renminbi will be included in the upcoming SDR basket.   You may have tracked the progress of that development here over the last three years or so.

And as the old BTO song goes, 'baby, you ain't seen nothing yet.'

Someone needs to save capitalism from the financial class, in the worst way.

Given the pervasive corruption and greed, there are only one or two candidates that I think have the potential to do it, two real outsiders if you will, with two very different perspectives on reform: Rand Paul and Bernie Sanders.

 But that is just my take on things.  I realize it is off-putting to those who have sworn their allegiance to some currently fashionable ideology like eliminating the rules to cure rule-breaking, or giving the powerful abusers even more power and discretion in the hopes that they would become tired of abusing us, and let slip a few more crumbs from their groaning tables of abundance.

I would dearly like to see Elizabeth Warren in at least a Cabinet position in the next presidency. But perhaps that sort of genuine impulse to change must wait for another financial crisis, so that the public will become more focused on the things that matter, rather than a steady diet of bread and circuses.

Let's see how the Non-Farm Payrolls report comes out tomorrow.

And let us see what new distractions might be run up the flagpole, to take our minds off things above our station, like financial and political reform.

Have a pleasant evening.