10 December 2018

Stocks and Precious Metals Charts - Is Paris Burning? - The Fire in the Minds of Men

"The central bank gold lending market, centered in London, is probably the most secretive financial market in the world, with very little known about its transactions and market structure.  The gold lending market’s opacity is further supported by regulators who protect the secrecy of the central banks, and mainstream financial news agencies whose editorial policies seem to forbid any market investigations, in-depth or otherwise.

It is in the gold lending market that the central banks of the world lend out their gold holdings to commercial bullion banks, where the physical gold is sold and shipped out, and where the central banks then claim to hold interest-earning ‘gold deposits’ with the bullion banks.  These gold-deposits (which are merely a claim on a bullion bank) then mostly roll over short-term, passed around indefinitely between the clubby LBMA cartel of bullion banks, in a totally opaque behind the scenes network.

The physical gold bars lent out are long gone to Switzerland and the Far East, and the central banks then deceptively claim that they still hold the gold on their balance sheets when in fact all they have is a liability to the bullion banks.  In the middle of this market sits the Bank of England, offering gold custody and storage to other central banks (in the vaults under the Bank of England headquarters in London) and offering gold accounts to the bullion banks concerned..."

Ronan Manly, French central bank and JP Morgan team up to boost Gold Lending

"We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.

Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the U.K."

Eddie George, Governor Bank of England, in a conversation with the CEO of Lonmin, September 1999

"What is most offensive is not their lying— one can always forgive lying— lying can be a delightful thing, for it leads to truth. What is offensive is that they lie, and worship their own lying."

Fyodor Dostoevsky, Crime and Punishment

Stocks caught a little bounce today.

It cheered up the spokesmodels, and gave the commentariat a chance to run banal pieces like 'Is Volatility the New Normal?'

Let's see if it will stick.

Gold and silver gave back a little of their recent gains.

The shell game that has been extending the current gold pool is running thin.

When this latest attempt to shape economic reality with hot money and words blows up, as it surely will, the resultant concussions will catch many by surprise.

But realistically,  how can anyone in a position of authority see it coming, when their eyes are averted and their ears are closed?
“There are three things all wise men fear: the sea in storm, a night with no moon, and the anger of a gentle man. Words can light fires in the minds of men. Words can wring tears from the hardest hearts.”

Patrick Rothfuss
Have a pleasant evening.

Killard House School is a co-educational Controlled School providing for children and young people with additional special educational needs. These include Moderate Learning Difficulties, Autistic Spectrum Disorder and associated Emotional barriers.

07 December 2018

Stocks and Precious Metals Charts - No Capitulation Yet

“The worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to insure that as few people as possible escape the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another.

In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. The bargains then suffered a ruinous fall. Even the man who waited for volume of trading to return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next 24 months. The Coolidge bull market was a remarkable phenomenon. The ruthlessness of its liquidation was, in its own way, equally remarkable.”

John Kenneth Galbraith, The Great Crash of 1929

Stocks went back down to test the lows.

Market manipulation just doesn't stick like it used to.

Gold and silver moved higher as the Dollar weakened.

Goldman continued to take contracts for gold on the Comex.

Next week is going to let us know if Santa is coming to town.

Have a pleasant weekend.

06 December 2018

What Do China and Goldman Sachs Have in Common?

Gold is not only flowing from West to East.

It is also flowing into the house account at Goldman Sachs.  Or at least the paper claims for it in New York.

Below is the monthly report showing the large amounts of physical gold which have been steadily flowing through the Shanghai markets into strong hands in China.

Few commentators are talking about this.

What is less familiar, and what I have not read about much, is the very large amount of gold that Goldman Sachs has been taking delivery on the Comex this month.

Attached are a few of the clearing reports below.

Notice that the big takers are the house account at Goldman, and some presumably large customer at JPM.

What's up with that?

Stocks and Precious Metals Charts - Mr. Trump's Wild Ride - Santa Takes One for the Team

"Half a league, half a league,
Half a league onward,
All in the valley of Death
Rode the six hundred.
‘Forward, the Light Brigade!
Charge for the guns!’ he said:
Into the valley of Death
Rode the six hundred.
‘Forward, the Light Brigade!’
Was there a man dismay’d?
Not tho’ the soldier knew
Someone had blunder’d."

Alfred Lord Tennyson, The Charge of the Light Brigade

“I think the Fed right now is a much bigger problem than China. I think it’s -- I think it’s incorrect what they’re doing.  I don’t like what they’re doing.  I don’t like the $50 billion.  I don’t like what they’re doing in terms of interest rates.

And they’re not being accommodative at all.  And I’m doing trade deals, and they’re great trade deals, but the Fed is not helping.”

Donald Trump

This would be funny if we were not stuck in the back seat of this crazy train.

Never in the field of financial endeavor have so many, been so roundly abused, by so few.

The Exchange Stabilization Fund stuffed Santa into a cannon this afternoon, and shot him into a hole in the popular narrative, plugging up the selling in stocks.

The turnaround was breathtaking, as the FANGS, minus AAPL, helped to lead the turnaround in US stocks that threatened to spoil the Christmas bonuses on Wall Street.

The buying panic was aided by Trump, who said "I didn't know" about the request for detention and extradition of the CFO of China tech giant, Huawei.

I suspect he will be saying "I didn't know" quite a bit for the rest of his term. It's the CEO thing to do.

Non-Farm Payrolls tomorrow.

Have a pleasant evening.