30 September 2012

Sunday Evening - Litanies in Times of Plague

"The lamps are going out all over Europe, and I doubt we shall see them lit again in our lifetime."

Edward Grey, British Foreign Secretary, Whitehall, 3 August 1914

September 1, 1939
by W. H. Auden, NYC, Oct 1939

I sit in one of the dives
On Fifty-second Street
Uncertain and afraid
As the clever hopes expire
Of a low dishonest decade:
Waves of anger and fear
Circulate over the bright
And darkened lands of the earth,
Obsessing our private lives;
The unmentionable odour of death
Offends the September night.

Accurate scholarship can
Unearth the whole offence
From Luther until now
That has driven a culture mad,
Find what occurred at Linz,
What huge image made
A psychopathic god:
I and the public know
What all schoolchildren learn,
Those to whom evil is done
Do evil in return...

From the conservative dark
Into the ethical life
The dense commuters come,
Repeating their morning vow;
"I will be true to the wife,
I'll concentrate more on my work,"
And helpless governors wake
To resume their compulsory game:
Who can release them now,
Who can reach the deaf,
Who can speak for the dumb?

All I have is a voice
To undo the folded lie,
The romantic lie in the brain
Of the sensual man-in-the-street
And the lie of Authority
Whose buildings grope the sky:
There is no such thing as the State
And no one exists alone;
Hunger allows no choice
To the citizen or the police;
We must love one another or die.

Defenceless under the night
Our world in stupor lies;
Yet, dotted everywhere,
Ironic points of light
Flash out wherever the Just
Exchange their messages:
May I, composed like them
Of Eros and of dust,
Beleaguered by the same
Negation and despair,
Show an affirming flame.

A Litany in Time of Plague
by Thomas Nashe, London, 1593

Beauty is but a flower,
Which wrinkles will devour,
Brightness falls from the air,
Queens have died, young and fair,
Dust hath closed Helen's eye.
I am sick, I must die--
Lord have mercy on us.

"To know and to serve God, of course, is why we're here, a clear truth, that, like the nose on your face, is near at hand and easily discernible but can make you dizzy if you try to focus on it hard. But a little faith will see you through.

What else will do except faith in such a cynical, corrupt time? When the country goes temporarily to the dogs, cats must learn to be circumspect, walk on fences, sleep in trees, and have faith that all this woofing is not the last word. What is the last word, then?

Gentleness is everywhere in daily life, a sign that faith rules through ordinary things: through cooking and small talk, through storytelling, making love, fishing, tending animals and sweet corn and flowers, through sports, music and books, raising kids — all the places where the gravy soaks in and grace shines through.

Even in a time of elephantine vanity and greed, one never has to look far to see the campfires of gentle people."

Garrison Keillor

29 September 2012

Bill Moyers: ALEC, the Secretive Corporate-Legislative Body Writing US Laws

ALEC in the US Congress

State Legislators with Ties to ALEC By State

International ALEC 'Delegates'

Senator Cory Bernardi – Australia

MEP Philip Claeys – Belgium

Hon Iris Evans (PC - Minister of International and Intergovernmental Relations) - Canada

MEP Ivo Strejcek – Czech Republic

MP David Darchiashvili – Georgia

Assemblywoman Ayesha Javed – Pakistan

MEP Adam Bielan – Poland
MEP Michal Kaminski – Poland
MEP Miroslaw Piotrowski – Poland
MEP Konrad Szymanski – Poland

MEP Cristofer Fjellner – Sweden

MEP Richard Ashworth – United Kingdom
MEP Martin Callanan – United Kingdom
MEP Niranjan Deva – United Kingdom
MEP Daniel Hannan – United Kingdom
MP Chris Heaton-Harris – United Kingdom
MEP Roger Helmer – United Kingdom
MEP Syed Kamall – United Kingdom
MEP Robert Sturdy – United Kingdom

Weekend Reading: John Henry Newman and the Significance of the Individual

What we do, and what do not do, matters greatly, if not so much in the greater world, but to those around us, and to the resolution of our souls, the essence of our being.

We are free to believe what we will, but we will be held accountable for what we believe and what we do, and the consequences of our beliefs and our unbelief.

There is a simple faith, and an equally simple unbelief. For those who do believe, however they may express that faith in the path that they have chosen, the task is to grow and deepen that faith and make it abundant and fruitful through action. One does not follow the will of God and love by despoiling His creatures and His creation for their own selfishly destructive ends.

If there is not love in your action, then you have lost your way. Where there is not love, there is not life in faith. It is that simple. No love, no life.
"Not everyone who calls out to me, 'Lord! Lord!' will enter the Kingdom of Heaven, but only those who actually do the will of my Father in heaven." Matt 7:21
And if you think your Lord calls you to hatred, jealousy, intolerance, anger and envy, then you will serve him indeed, forever, so know well whom you serve.

Whatever you may think, what you do matters. You will makes choices, not in some single choice or a grand final test, but day by day, building on each other in a chain of causality and consequence.

You may do what you will, but you will choose.  And you will remain with what you have chosen to  love, for a very long time. So it is worth some thought.  The time grows short, and the shadows lengthen.

"God has created me to do Him some definite service; He has committed some work to me which He has not committed to another. I have my mission—I never may know it in this life, but I shall be told it in the next. Somehow I am necessary for His purposes, as necessary in my place as an Archangel in his—if, indeed, I fail, He can raise another, as He could make the stones children of Abraham.

Yet I have a part in this great work; I am a link in a chain, a bond of connexion between persons. He has not created me for naught. I shall do good, I shall do His work; I shall be an angel of peace, a preacher of truth in my own place, while not intending it, if I do but keep His commandments and serve Him in my calling.

Therefore I will trust Him. Whatever, wherever I am, I can never be thrown away. If I am in sickness, my sickness may serve Him; in perplexity, my perplexity may serve Him; if I am in sorrow, my sorrow may serve Him. My sickness, or perplexity, or sorrow may be necessary causes of some great end, which is quite beyond us.

He does nothing in vain; He may prolong my life, He may shorten it; He knows what He is about. He may take away my friends, He may throw me among strangers, He may make me feel desolate, make my spirits sink, hide the future from me—still He knows what He is about."

John Henry Newman, Meditations and Devotions

28 September 2012

Bill Black Financial Report - How London Aspired to Be Fraud Capital of the World

Apparently since Blair the FSA has been soliciting financial business by advertising the loosest regulatoary morals on either side of the Atlantic.

Not that the US is any paragon of virtue. Timmy is known as the go-to head boy for the biggest banks.

But this is no surprise, because as Kansas City Fed governor Hoenig said, for the past twenty five years the selection of the US Treasury Secretary has been done by a de facto private auction to the biggest banks.

Gold Daily and Silver Weekly Charts - Not Much of a Pullback Yet

Not much of a pullback but still stuck at resistance.

It appears that September has come and gone without the CFTC saying 'peep' about the manipulation in the silver markets.

Let's see how next week goes.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - HFT Is Strangling the Markets

I was a bit surprised to see the paint slipping off the tape today, in the face of slack domestic US economic news. People cannot spend what they do not have.

High Frequency Trading, as it now stands, is institutionalized corruption of the markets, and it is killing them. The SEC is looking at it, but it is hard to imagine that they will do anything meaningful in the way of reform.

Those who 'own' the exchanges are operating them as their personal casinos, front running and skimming customers at every turn, and they generally get their way with these regulators in the States.

The market was sluggish today. Let's see if the bulls can whistle up a rally next week on these light volumes.

A Financial Coup d'Etat, the Credibility Trap, and What Must Be Done

These two statements on the credibility trap and reform are from the bottom of my blog, and a permanent fixture to the layout of the site.

I wanted to take a moment to remind you of them, because they can be so easily overlooked. And they often are.

What I say in quite a few words, Chris Hedges says in a fairly pithy manner in the video below. And I think he is right. And this applies as much to Europe and the UK and the Mideast, including Israel, as it does to the US and the rest of the Americas.  Of course one could name many other countries, such as Russia and China, but unfortunately they cannot fall from freedom, because despite the changes in names and slogans and the self-serving advertising campaigns of nationless corporate predators, they already have little or none.

The progressive movement lacks a spine for the moment, and is badly divided over a number of difficult issues which diffuse them, instilling hatred and fear in their hearts, driving out love, and leaving room only for a destructive pride and selfishness.  And the timid thinkers, the so-called intelligentsia, hide in their studies and in their cellars, and in their work, waiting for someone else to do something.

Eventually progressive people will come together or, as Edmund Burke observed, "...they will fall, one by one, an unpitied sacrifice in a contemptible struggle."

To those who say to hell with it, to hell with thinking, to hell with complexity, to hell with others, I say, be careful of the madness which you seek to unleash, because it will come back to consume you and your children, as it has done so many times before, and will do so inevitably again.

This is what I believe is happening now based on a careful reading of history. 

This is not a prediction.  This is a warning for a generation that is being prepared to accept the unthinkable on a much wider scale than they might imagine in their worst nightmares: torture, murder, ethnic cleansing, and repression.  And what is most frightening of all is that they think they are immune to it, because they are so different, so special, so exceptional.  And so they become willfully blind, and in their blindness, may become beasts.

A credibility trap is when the regulatory, political and/or informational functions of a society have been compromised by a corrupting influence and a fraud, so that they cannot address the situation without implicating, at least incidentally, a broad swath of the power structure including themselves.

The status quo has at least tolerated the corruption and the fraud, if not profited directly from it, and most likely continues to do so. The power brokers have become susceptible to various forms of blackmail. And so a failed policy can become almost self-sustaining long after it is seen to have failed, and even become counterproductive, because admitting failure is not an option for those in power.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

27 September 2012

Gold Daily and Silver Weekly Charts - Negative Returns on Money Market Funds

Gold and silver had sharp rallies today as the selling going in to the end of quarter and the gold option expiry dissipated and a sharp short squeeze ensued.

Gold hit a new high in euros today on the back of fresh uncertainties in Europe, particularly in Spain.

As you know money market funds are savings vehicles with a fixed unit price that pay dividends, like a savings account. They arose as alternatives to bank deposit accounts because they were able to present higher returns than the regulated banks.

The Banks, and their regulatory friends who have been mostly among the Republicans want the money markets to have a floating price like a stock, opening the possibility for negative returns on savings. Turbo Timmy G. came out today calling for reforms in the money market funds, and a 'floating price' for the money market fund.

Et tu Timmy? All day long. The young man is getting ready to leave Washington after the election and take a lucrative trip through the crony capitalist revolving door, and probably into the banking sector.

The increased uncertainty, the chance of negative returns on your savings if the funds are allowed to fluctuate below one dollar per unit, is sure to drive quite a bit of risk adverse money out of the money market funds. And it opens the door to price manipulation and fraud, doing nothing to help promote transparency and confidence.

The Banks have always hated the money market funds, and are hoping capital will move out of the funds to them in the form of cheap, insured deposits.

I think quite a bit will go into gold and silver as people sicken of the financial repression of the Banks and their friends.

SP 500 and NDX Futures Daily Charts - The Paint Stays Mainly On the Tape

The several days of selling did dry up yesterday as we had suspected and today we had the end of quarter paint job.

We will probably see this continue into the weekend barring something unforeseen.

Let's see what happens.

Updated Gold Shadow Chart - Gold Hitting New Highs In Euros

Gold is now jammed up against resistance as many of the weak hands have been shaken out and the shorts are getting squeezed by fresh jitters in Europe. 

But is it enough to support a breakout? We will have to wait and see.

Gold is hitting new highs in terms of the Euro. 

I will be a little surprised if we get the breakout cleanly now without a serious 'gut check' after the gold option expiration, in which the in-the-money call holders now find themselves with shiny new futures positions.  But this might just be my inherent distrust of the trading environment on the CME.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

26 September 2012

Gold Daily and Silver Weekly Charts - Silver Turns It Around - Gold Options Expiration - Ted Butler

As noted in the intraday commentary this is a week with a few key events on the Comex for gold, and so we continued to see the metals under pressure, although silver turned it around quite impressively and reached back up for the 34 handle.

Let's see how we go into gold option expiration and first notice.

Sept. 26 Comex October miNY gold futures last trading day
Sept. 26 Comex September silver futures last trading day
Sept. 27 Comex October gold options expiry
Sept. 28 Comex September gold futures last trading day
Sept. 28 Comex October E-mini gold futures last trading day
Sept. 28 Comex October gold futures first notice day

Ted Butler on J.P.Morgan and silver:
"My allegations in silver are incredibly specific. I believe that JPMorgan, by virtue of a massive concentrated short position in COMEX silver futures, is manipulating the price of silver lower than it would be otherwise. If JPMorgan’s concentrated short position did not exist, the price of silver would be substantially higher. It does not matter if the bank is hedging or engaged in market-making; the mere existence of such an unprecedented large and concentrated short position proves manipulation. That’s a key feature of commodity law and is why the CFTC monitors concentration closely.

For some reason, however, the Commission treats silver differently than other commodities. In addition to ignoring the concentrated short position, it glosses over the results of the concentration on price. Silver witnessed, among other large and uneconomic sell-offs, two distinct sell-offs in 2011, in which the price fell 30% and 35% within a few days. Not one word was heard from the Commission on the two most pronounced sell-offs in modern commodity history. Yet, this week Commissioner O’Malia promised that the Commission was looking into the 4% price decline in oil. A decline in oil of 4% gets same day comment; 35% down in silver is not worthy of any comment. This amounts to a level of discrimination that is not tolerated in society or in regulatory matters.

In addition to being specific, my allegations around JPMorgan manipulating the silver market are consistent and continuous. Four years ago, instead of responding directly to public complaints about JPMorgan’s concentrated short position, the Commission chose to investigate as a way of kicking the can down the road. After four years, the issue remains because JPMorgan’s concentrated short position remains. No one in authority wants to make the issues around this short concentration more transparent; not the CFTC, not the CME, not JPMorgan itself. Transparency is good in principle and for the other guy; but when it comes to silver, not so much..."

Ted Butler, 25 September 2012

As you know I think the CFTC may be caught in a credibility trap with respect to the silver and gold markets. And if so, at some point this is going to break, as a scandal of major proportions.

All the CFTC has to do is to release its findings, and satisfy analysts like Ted Butler with proof that the big short in silver is a genuine hedge. That is their responsibility as the representatives of the public in overseeing the markets.

That they will not do so, that they will not even speak to the issue but continue to be evasive, makes one wonder just what sort of people these are, and what they have to hide.

I read with some cheerfulness today that Europe is using the US markets as a model of what NOT to do, in crafting their new regulations about high frequency trading. The types of 'Dr. Evil' market manipulation practiced in the states is already illegal in Europe, and more importantly, enforced on occasion.

And for New York and London and their contempt for the people, shame.

SP 500 and NDX Futures Daily Charts - Slouching In To Quarter Close

A quiet day all things considered, with more housecleaning going on in the fundish portfolios as the markets lumber on into the quarter end close.

Let's see if the selling does dry up now, and the paint sprayers switch on and begin to hit the tape.

If 'something happens' all bets are off of course. This is a flimsy market to say the least, about as cynical as it gets.

Robert Johnson: Economists As Marketeers for the Monied Interests

Economics is a disgraced profession because of the actions of a few that were tolerated by many, too often for the sake of grants, appointments, and academic timidity. Careerism.

I would not give many of the Wall Street friendly economists too much credit for an obsession with abstract thinking and even dogmatic blindness, but much moreso a willingly cynical preoccupation with temporal honors, prestige, power, and money handed out by the financial interests in a bubble economy of their own creation.

And there is a fitting emblem for this hubris, the cult of the self, with the long tenure of Alan Greenspan at the Federal Reserve. 

A bureaucrat who is in a position of power for far too long can become a debilitating influence not only on their particular area or department, but on a profession as a whole.  One might think of it as the J. Edgar Hoover syndrome.

Robert Johnson serves as the Executive Director of the Institute for New Economic Thinking (INET) and a Senior Fellow and Director of the Global Finance Project for the Franklin and Eleanor Roosevelt Institute in New York.

Johnson is an international investor and consultant to investment funds on issues of portfolio strategy. He recently served on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz.

Previously, Johnson was a Managing Director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. Prior to working at Soros Fund Management, he was a Managing Director of Bankers Trust Company managing a global currency fund.

Johnson served as Chief Economist of the US Senate Banking Committee under the leadership of Chairman William Proxmire (D. Wisconsin). Before this, he was Senior Economist of the US Senate Budget Committee under the leadership of Chairman Pete Domenici (R. New Mexico).

Johnson was an Executive Producer of the Oscar winning documentary, Taxi to the Dark Side, directed by Alex Gibney, and is the former President of the National Scholastic Chess Foundation. He currently sits on the Board of Directors of both the Economic Policy Institute and the Campaign for America’s Future.

Johnson received a Ph.D. and M.A. in Economics from Princeton University and a B.S. in both Electrical Engineering and Economics from the Massachusetts Institute of Technology.

Key Comex Dates for Gold and Silver To Year End and Updated 'Shadow Gold Chart'

In addition to the end of quarter mark to market boogie woogie, which I think is responsible for quite a bit of the stock market action, there are also a few key things happening in the gold and silver futures markets this week that also provide the occasion for some 'technical trading.'

Harvey Organ reminds us that the metals often get 'hit' as an active month rolls over, to discourage speculators from taking delivery on their contracts.  This is often marked by the 'first notice day.'

In the short term the markets are a bit treacherous because of the lack of enforcement of the basic rules that govern healthy markets.  In the longer term these things tend to become just noise.

Pick whatever time frames you wish, but know the character of the markets in which you choose to participate.

Also bear in mind that during times of excessive market speculation because of hot money and lax regulation, information sources are often used and even co-opted to help to shape 'perceptions.'

This may even be unconscious if the information provider does not view certain stories that are offered at certain times with a skeptical eye. A little truth broadly embellished and assigned is the most reliable sort of lie.

Sept. 26 Comex October miNY gold futures last trading day
Sept. 26 Comex September silver futures last trading day
Sept. 27 Comex October gold options expiry
Sept. 28 Comex September gold futures last trading day
Sept. 28 Comex October E-mini gold futures last trading day
Sept. 28 Comex October gold futures first notice day
Oct. 27 Comex November E-mini silver futures last trading day
Oct. 27 Comex October silver futures last trading day
Oct. 27 Comex November E-mini gold futures last trading day
Oct. 29 Comex October gold futures last trading day
Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry

Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day

Dec. 27 Comex December gold futures last trading day
Dec. 27 Comex December silver futures last trading day
Dec. 27 Comex December E-micro gold futures last trading day
Dec. 31 Comex January 2013 silver futures first notice day

The formation will not be valid until the previous high is exceeded and there is a clear breakout, or a handle is set for a 'cup and handle.'

Intraday Trends In Gold and Silver: Five Year Rolling Average

These charts are from my friend Nick Laird.

The lesson seems to be 'buy post London fix' and 'sell before the London AM fix.'

Or just ignore the intraday wiggles if you do not have the time and inclination to trade, and wait for this cynical, hypocritical, and criminally fraudulent market centered in NY and London to tear itself apart.

25 September 2012

Gold Daily and Silver Weekly Charts - Slouching Into the End of Quarter

The metals were hit today along with stocks. Stocks were hit because of the lousy economic indications from companies, and the sour words from the Philly Fed's Charley Plosser (see the post below this).

Gold and silver were hit pretty much on a matter of principle I think. The principle is that this is the end of quarter, and so we will see selling today and maybe a little tomorrow as the funds hit they bow-wows and raise some cash for the end of week ramp-o-rama.

The metals may not participate since the Big Shorts need some help on their mark to market losses. And their guiding principle is 'do what thou wilt' with Other People's Money.

Let's see how this plays out.

SP 500 and NDX Futures Daily Markets - Philly Fed's Plosser Casts Pall Over Markets

The Philly Fed's Charles Plosser did a reverse jawbone on Fed policy today when he remarked:
"We are unlikely to see much benefit to growth or to employment from further asset purchases. Conveying the idea that such action will have a substantive impact on labor markets and the speed of the recovery risks the Fed’s credibility.”

Read the entire story here.
In case you were wondering Plosser is not a voting member of the Fed's FOMC this year.

It is one thing for a nobody like myself to say this sort of thing, but when the President of the Philly Fed says it, it can move markets, and it did. It did not help that Catepillar had guided lower last night and the market was primed for some profit taking at this stage of the end of quarter two step dance.

It is going to take significant financial and economic reform and rebalancing to sustain this recovery. Plosser didn't recommend anything other than to say that the Fed cannot do anything more, and that it 'risks its credibility.'

Sorry Charlie. It doesn't have any credibility anymore. The last two bubbles fixed that.

Sheila Bair beat up Turbo Timmy and his bankster buddies in the early releases of her new book. He is the bailout king according to her and raised some serious questions about his catering to a few of the big TBTF's like Citigroup.

David Malpass was the 'closer' on Bloomberg TV today. He said some odd sounding things for someone who is a famed 'chief economist.' But that is what it said on his business card at Bear Stearns so it must be true.

If this is going to be a typical end of quarter shenanigan fest then we should see the selling dry up tomorrow and a ramp into the weekend coming.

Jitters over Iran are not helping markets to keep their paint from peeling. But the paint will probably go on the tape nonetheless.

Net Asset Value Premiums For Certain Precious Metal Trusts and Funds - Sprott Buys More Silver

It appears that Sprott has drawn down the cash levels in the Silver trust to add additional bullion to the funds holdings.

The Silver Trust spent approximately $23,000,000 of their cash to buy 680,104 ounces of silver bullion or about 33.82 per ounce.

The Trust typically does not operate with cash levels much lower than this. They need to pay all the expenses of the fund's administration including record keeping and storage fees.

I suspect that they may act to raise cash levels, probably by doing another follow on offering within the next three to four months. They will probably wait for the premium to expand a bit first, depending on how they view the physical market for bullion shaping up.

Chris Hedges: The Reaping of America

"We will all swallow our cup of corporate poison. We can take it from nurse Romney, who will tell us not to whine and play the victim, or we can take it from nurse Obama, who will assure us that this hurts him even more than it hurts us, but one way or another the corporate hemlock will be shoved down our throats. The choice before us is how it will be administered.

Corporate power, no matter who is running the ward after January 2013, is poised to carry out U.S. history’s most savage assault against the poor and the working class, not to mention the Earth’s ecosystem. And no one in power, no matter what the bedside manner, has any intention or ability to stop it.

If you insist on participating in the cash-drenched charade of a two-party democratic election at least be clear about what you are doing. You are, by playing your assigned role as the Democratic or Republican voter in this political theater, giving legitimacy to a corporate agenda that means your own impoverishment and disempowerment.

All the things that stand between us and utter destitution—Medicaid, food stamps, Pell grants, Head Start, Social Security, public education, federal grants-in-aid to America’s states and cities, the Women, Infants, and Children nutrition program (WIC), Temporary Assistance for Needy Families and home-delivered meals for seniors—are about to be shredded by the corporate state.

Our corporate oligarchs are harvesting the nation, grabbing as much as they can, as fast as they can, in the inevitable descent...

Obama is not in charge. Romney would not be in charge. Politicians are the public face of corporate power. They are corporate employees. Their personal narratives, their promises, their rhetoric and their idiosyncrasies are meaningless. And that, perhaps, is why the cost of the two presidential campaigns is estimated to reach an obscene $2.5 billion. The corporate state does not produce a product that is different. It produces brands that are different. And brands cost a lot of money to sell.

You can dismiss those of us who will in protest vote for a third-party candidate and invest our time and energy in acts of civil disobedience. You can pride yourself on being practical. You can swallow the false argument of the lesser of two evils. But ask yourself, once this nightmare starts kicking in, who the real sucker is. "

Chris Hedges, How Do You Take Your Poison?

Read the rest here.

Quo vadimus, Domine?

24 September 2012

Gold Daily and Silver Weekly Charts - End of Quarter - When Dollar and the Pound Are But Dust

This week is the end of the third quarter.

Those holding the big short in the metals might strive to keep the price down to make their 'mark to market' look less daunting.

Stocks may find a bit of a floor 'unless something happens.'

The fundamentals for gold look formidable. The long lull of summer may be coming to an end.

When the dollar and the pound, and the empires they helped to found, are but dust and faded memories of days gone by, gold and silver will remain.

In Egypt's sandy silence, all alone,
Stands a gigantic Leg, which far off throws
The only shadow that the Desert knows:
I am great Ozymandias, saith the stone,
The King of Kings; this mighty City shows
The wonders of my hand.
— The City's gone,
Nought but the Leg remaining to disclose
The site of this forgotten Babylon.

We wonder, and some hunter may express
Wonder like ours, when through the wilderness
Where London stood, holding the wolf in chase,
He meets some fragment huge, and stops to guess
What powerful but unrecorded race,
Once dwelt in that annihilated place.

Horace Smith, Ozymandias, 1818

SP 500 and NDX Futures Daily Charts - End of Quarter Boogie Woogie?

The world will always welcome lovers, as time goes by.

22 September 2012

Audacious Oligarchy: The Double Flash Crash In Gold - Sept 13, 2012

The 'Dr. Evil' strategy in two pictures.

From Nanex Research:
Trading was so furious in Gold, that the CME circuit breakers triggered and halted the futures contract for 5 seconds. First on the downside, then on the upside. This is the same circuit breaker that triggered only once in the eMini during market hours: that time was at the bottom of the flash crash on May 6, 2010.

The first halt in the December 2012 Gold Futures contract (GC.Z12) was at 12:14:44: you can see the gap in volume in the lower panel of Chart 1. One second before the halt, 2,000 contracts traded the price down $10, from $1,730 to $1,720. The CME halt logic triggers a 5 second market pause whenever orders appear that would remove all available liquidity and move the price by a certain amount.

For this event, this basically means that if this order represented a true intent to sell, then we should expect additional selling (from the balance of the order that triggered the halt) when trading resumes.

However, in this case, the additional selling did not materialize, which leads us to believe the large sell order was meant to disturb any market based on the price of gold. And disturb the markets, it did

1. December Gold Futures (GC.Z12) ~ 1 second interval trades with depth of book color coded by how much size is at each level.

Note the gap showing the halt after the drop. The depth of book shows orders continue to be added/removed from the book during the halt.

21 September 2012

Gold Daily and Silver Weekly Charts - Bear Raid in Honor of Quad Witch

Gold and silver were rallying hard to day, reaching new recent highs and threatening overhead resistance when they were hit rather hard and suddenly, on no news and without a commensurate move in stocks.

This looks like quad witching action.

Here are the charts so you can see where we stand. Intraday commentary discusses the daily gold chart formations.

See you Sunday evening.

SP 500 and NDX Futures Daily Charts - Even the Quad Witch Is Sleepy

Today was the big 'quad witch' of September in the markets, but you would have hardly known it as stocks popped and flopped.

SP is also rebalancing their indices today which is driving some of the volume.

The front month in the stock futures is now December. How time flies.

Have a pleasant week.

Jon Stewart: Chaos On Bullshit Mountain

Out of the mouths of comedians...

The Daily Show with Jon StewartMon - Thurs 11p / 10c
Chaos on Bulls**t Mountain - The Entitlement Society

Daily Show Full EpisodesPolitical Humor & Satire BlogThe Daily Show on Facebook

What kind of a people could delight in machine-gunning the lifeboats of those who are attempting to escape, not to thrive but to merely survive, the mayhem and chaos that these same sociopaths have created through their selfish and criminal actions? And what sort of gullible fools will listen to them, and assist them in their work even if passively by saying nothing?
"The inability to identify with others was unquestionably the most important psychological condition for the fact that something like Auschwitz could have occurred in the midst of more or less civilized and innocent people.

What is called 'fellow traveling' (collaboration) was primarily business interest: one pursues one’s own advantage before all else and, simply not to endanger oneself, does not talk too much. That is a general law of the status quo."

Theodor Adorno
Have we truly learned nothing? Must we make the same mistakes over and over again?

These 49 percent include for the most part the elderly, students, the working poor, soldiers and their families, and the disabled.

These 'handouts' include Social Security and unemployment insurance which people have paid for when times were good. The ranks of the working poor have swelled for sure, because of a financial collapse brought on by unfettered greed and fraud of Wall Street, and a stagnant real median wage for the past 20 years in the face of rising costs, often driven by monopolies, fraud, and cartels.

A kleptocracy is sucking the life out of working men and women by force and fraud. A group of sociopaths, who have committed one of the great crimes in history, not only blithely walk away with their loot unpunished, but come back to rob their victims once again, to finish the job. And they gorge themselves on the public trust even while begrudging the widow her pittance, or trying to steal it.

They pervert and corrupt so many, filling their hearts with their passionate lies, appealing to what is the very worst in them. They are truly a den of vipers and thieves.

You can believe what you will, but you will be held responsible for your beliefs, and your actions, what you do and do not do.

And finally, it takes a comedian to stand up and say it. "Shame."

Source: Reuters

Update on the Gold 'Shadow Chart' - Review of the 'Cup and Handle' Formation

A "Cup and Handle" is a bullish continuation pattern in an uptrend
The greatest factor working against this current gold chart as a cup and handle is that it appears during a consolidation pattern in a broader uptrend. 

The 'cup' is best shaped as a "U" and the broader the bottom the better.

The 'handle' is a retracement when the right side of the 'cup' reaches its prior highs. The handle often resembles a bullish pennant.

The retracement usually does not exceed 1/3 of the advance of the cup to its second high, but can go as deep as 1/2 in a volatile market.

Here is a textbook picture of a 'cup and handle formation' from Investopedia.

Below that is the chart in progress of a cup and handle in gold that proved to be quite successful.

Here is the current daily chart of Gold. As you can see there is a possible cup formation. It will not be confirmed until we see a successful 'handle.'

I cannot stress this enough.  It will be in the nature of any 'handle' that is formed that the cup and handle formation can be confirmed.

Until then there remains the very real possibility that this will develop into a mere trading range between 1800 and 1550.  Gold may also hit the 1800 level and after some consolidation break away and just keep going higher.
The more I look at the possibilities the more I become convinced that this is just a long consolidation in a bull market.  That implies a breakout and breakaway to the next target price.   We cannot tell if it will break out on this attempt at the top of the range.  This is the third major attempt.  It does have the winds of QE3 at its back.  But there is significant trouble in the global economy that may pose a risk to all asset prices.  

And of course the western central banks have a vested interest in keeping the price of gold 'orderly' so it does not impair the confidence in their paper games of QE to ∞.

 One way to make yourself look good is to diminish the competition.  They have to be careful of being too heavy handed because at some point intervention becomes 'machine-gunning the lifeboats.'  Therefore it is likely that they will have someone else holding the gun, some favored bank or hedge funds.

I do not know what will happen.  No one does.  But we know what to look for.

20 September 2012

Gold Daily and Silver Weekly Charts - A Look At Precious Metal ETFs - Split Right Ball Curl On Ben

The line is being held as I said yesterday. 1800 is the next 'first down' marker for gold, if they can cross it and hold it. Silver *could* lead the way, but that might look more like a deep pass to midfield.

Ben Davies thinks that the next move in gold can be big. I think he might be right IF they can break and run with it past the prior highs. And that is a big if with Ben and his extended team of thugs throwing cheap shots all over the field and 'managing' the scoreboard. This sometimes seems like The Longest Yard. Maybe its time for the bulls to call Split Right, Ball Curl on 1. Heads up Ben.

Here is some commentary from Lauren Lyster on the use of ETFs in the precious metals markets.
"Investors can gain exposure to precious metals using ETFs. Specifically, Gold and gold miner ETFs have become increasingly popular. But if you buy shares in a gold ETF like the GLD for example, the largest gold ETF in the world, do you actually own gold? The answer is NO. You are effectively buying shares in a fund indexed to the gold market. This is not the same thing as buying physical gold bullion and storing it in allocated vaults, a key distinction.

Also, in the case of GLD, the Trust does not insure its gold. Which means it may not have adequate sources of recovery if its gold is lost, damaged, stolen or destroyed. And this may surprise you when reading the prospectus as we have. According the prospectus for GLD:
"The amount of gold represented by the Shares will continue to be reduced during the life of the Trust due to the sales of gold necessary to pay the Trust's expenses irrespective of whether the trading price of the Shares rises or falls in response to changes in the price of gold....
Gold held in the Trust's unallocated gold account and any Authorized Participant's unallocated gold account will not be segregated from the Custodian's assets. If the Custodian becomes insolvent, its assets may not be adequate to satisfy a claim by the Trust or any Authorized Participant."

So if the custodian- in this case HSBC- runs into trouble, it may not be able to make good on your claim."

Here is a graph showing the long and short positions in silver futures.

SP 500 and NX Futures Daily Charts - Failure Is Not An Option

Apparently failure is not an option, when one is talking about financial assets in a time of open-ended quantitative easing.

Karl Polanyi On Liberal Economics and the Rise of Fascism

"Hobbes had argued the need for a despot because men were like beasts; Townsend insisted that they were actually beasts and that, precisely for that reason, only a minimum of government was required.

From this novel point of view, a free society could be regarded as consisting of two races: property owners and laborers. The number of the latter was limited by the amount of food; and as long as property was safe, hunger would drive them to work. No magistrates were necessary as hunger was a better disciplinarian than the magistrate...

The biological nature of man appeared as the given foundation of a society that was not of a political order. Thus it came to pass that economists presently relinquished Adam Smith's humanistic foundations, and incorporated those of Townsend...Economic society had emerged as distinct from the political state."

Karl Polanyi, The Great Transformation, 1944

Plus ça change, plus c'est la même chose. Only the percentages and the methods of sorting seem to matter to a certain type of ubermensch mentality. And of course force and fraud are indispensable to the accumulation and protection of their wealth.

I have spent the last day or two reading Karl Polanyi's landmark work of economic history, The Great Transformation: The Political and Economic Origins of Our Time.

Polanyi's history is particularly good because he describes in some detail how the predominant economic thought changes and adapts itself to its cultural context, the changing attitudes and philosophies of people and particular historical developments. And how it even begins to shape history as a branch of political philosophy. What are people, and what is their relationship to society as a whole? What is power? What is moral?

It is a grave mistake to treat economics as a physical science like chemistry. Chemistry seeks to quantify and explain an essentially unchanging physical world in substance if not in incidentals.  There are real laws. Theory becomes verifiable fact, and new facts build to new theories. Chemistry evolves, in that it changes with a remarkably evident progression of one thing on another which can be seen against some objective standard.

Economics reflects the changing attitudes of politics and the other social sciences to the relationship among the individual, society, and nature.  That is not to say that there is no learning in a social science. There is plenty of learning, but also a strong tendency to have to re-learn the same hard lessons over and over again. 

If someone in astrophysics were to say that the sun revolves around the earth they would be laughed off the podium and booted out of their positions. But if an economist says even now that markets are naturally self-regulating and efficient if left alone, they might be given a large grant and the chairmanship of an economics department, even though this theory has been found wanting, or as some might phrase it, a howler

There is a remarkably poignant paragraph in Polanyi where he says that since self-regulating markets have been proven to be nonsense "we are witnessing a development under which the economic system ceases to lay down the law to society and the primacy of society over that system is secured." As John Kenneth Galbraith put it, there are no new financial frauds, just variations on the old familiar themes.

Keep in mind that there is a difference between monetary theory, which is more akin to finance, and macroeconomics, which operates more generally in the realm of broad relationships and what is essentially morals or public policy. It is well said that a little learning is a dangerous thing, because one does not understand the scope of the field and their own limitations.

A certain school of economics can, and often did as shown in this history, coolly observe that profits will be maximized if a large percentage of the workers are maintained on the verge of starvation and insecurity without any support or interference from society, in the service of a superior few. We can clearly see the descendants of that particular moral philosophy in the world today.

It should be understood that by 'liberal economics' is meant 'self-regulating,' or essentially unregulated markets, and not progressivism as we might think of it today.  Polanyi goes to some lengths to show that there are no self-regulated markets that are fair and efficient.  Mostly those markets that are called self-regulated are set up with a bias that favors the insiders that control them.  Or as I said the other day, naturally occurring self-regulated markets are as common as seals reciting Shakespeare.

It is a long book. I will almost certainly read it again in more leisure. I tend to read quickly online, and more carefully when holding an actual book. But it was enjoyable and those inclined might read it with some benefit.   It gave me a framework on which to hang quite of bit of independent thought and learning, providing some additional coherence.  I think I understand why certain things have happened in the way that they have.

Bear in mind that Polanyi is a man of his time. I disagreed with many of his thoughts on the gold standard for example, even though I am not even in favor of it today as I have said, for some of the same reasons he cites. I have seen another 60 or more years of history without a gold standard, and know that what he saw was not so much attributable to the gold standard but the inflexibility of a single currency system, much as we are seeing with a euro currency and a multiplicity of fiscal regimes in the euro zone today.   And for the dollar reserve currency in the world which is in a similar process of failing for similar reasons.  I still wonder at who conceived these monstrosities and what they were really thinking, except for an expedient solution that became institutionalized with a powerful set of adherents and beneficiaries, and so long outlived its usefulness.

I include here only key passages, by no means exhaustive or complete. I have left out whole sections of his thought on land for example. But the major progression of his thought is here.

A Utopian system leads to an impasse between the adherents attempting to sustain the unsustainable and those who are obliged to endure its conflicts with reality. Much in the manner of the Wall Street financialisation cartel and the real productive economy today. The system might function well during a spectacular growth period, but when some return to normal growth occurs the system fails and a standoff occurs.

Unless resolved by organic reform that impasse can lead to 'reform by other means,' or an extreme solution and with it a general unhappiness. This is in fact his thesis, that the failure of neoliberal economics and its unwillingness to relieve the deadlock in which it held the real world economy led to the rise of the extreme solutions of fascism, communism, and the second great war. He makes an interesting case.

"A market economy is an economic system controlled, regulated, and directed by markets alone; order in the production and distribution of goods is entrusted to this self-regulating mechanism. An economy of this kind derives from the expectation that human beings behave in such a way as to achieve maximum money gains. It assumes markets in which the supply of goods (including services) available at a definite price will equal the demand at that price. It assumes the presence of money, which functions as purchasing power in the hands of its owners.

Production will then be controlled by prices, for the profits of those who direct production will depend upon them; the distribution of the goods also will depend upon prices, for prices form incomes, and it is with the help of these incomes that the goods produced are distributed amongst the members of society. Under these assumptions order in the production and distribution of goods is ensured by prices alone...

Nothing must be allowed to inhibit the formation of markets, nor must incomes be permitted to be formed otherwise than through sales. Neither must there be any interference with the adjustment of prices to changed market conditions—whether the prices are those of goods, labor, land, or money. Hence there must not only be markets for all elements of industry, but no measure or policy must be countenanced that would influence the action of these markets. Neither price, nor supply, nor demand must be fixed or regulated; only such policies and measures are in order which help to ensure the self-regulation of the market by creating conditions which make the market the only organizing power in the economic sphere...

A self-regulating market demands nothing less than the institutional separation of society into an economic and political sphere. Such a dichotomy is, in effect, merely the restatement, from the point of view of society as a whole, of the existence of a self-regulating market...

A market economy must comprise all elements of industry, including labor, land, and money. (In a market economy the last also is an essential element of industrial life and its inclusion in the market mechanism has, as we will see, far-reaching institutional consequences.) But labor and land are no other than the human beings themselves of which every society consists and the natural surroundings in which it exists. To include them (people) in the market mechanism means to subordinate the substance of society itself to the laws of the market...

To allow the market mechanism to be sole director of the fate of human beings and their natural environment, indeed, even of the amount and use of purchasing power, would result in the demolition of society. For the alleged commodity "labor power" cannot be shoved about, used indiscriminately, or even left unused, without affecting also the human individual who happens to be the bearer of this peculiar commodity. In disposing of a man's labor power the system would, incidentally, dispose of the physical, psychological, and moral entity "man" attached to that tag. Robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime, and starvation.

Nature would be reduced to its elements, neighborhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed. Finally, the market administration of purchasing power would periodically liquidate business enterprise, for shortages and surfeits of money would prove as disastrous to business as floods and droughts in primitive society...But no society could stand the effects of such a system of crude fictions even for the shortest stretch of time unless its human and natural substance as well as its business organization was protected against the ravages of this satanic mill...

But on the island of Juan Fernandez (an economic analogy described earlier) there was neither government nor law; and yet there was balance between goats and dogs. That balance was maintained by the difficulty the dogs found in devouring the goats which fled into the rocky part of the island, and the inconveniences the goats had to face when moving to safety from the dogs. No government was needed to maintain this balance; it was restored by the pangs of hunger on the one hand, the scarcity of food on the other. (This is the law of predator and prey).

Hobbes had argued the need for a despot because men were like beasts; Townsend insisted that they (people) were actually beasts and that, precisely for that reason, only a minimum of government was required. From this novel point of view, a free society could be regarded as consisting of two races: property owners and laborers. The number of the latter was limited by the amount of food; and as long as property was safe, hunger would drive them to work. No magistrates were necessary, for hunger was a better disciplinarian than the magistrate...

The paradigm of the goats and the dogs seemed to offer an answer. The biological nature of man appeared as the given foundation of a society that was not of a political order. Thus it came to pass that economists presently relinquished Adam Smith's humanistic foundations, and incorporated those of Townsend...Economic society had emerged as distinct from the political state...

To the politician and administrator laissez-faire was simply a principle of the insurance of law and order, with the minimum cost and effort. Let the market be given charge of the poor, and things will look after themselves...

What induced orthodox economics to seek its foundations in naturalism was the otherwise inexplicable misery of the great mass of the producers which, as we know today, could never have been deduced from the laws of the old market. But the facts as they appeared to contemporaries were roughly these: in times past the laboring people had habitually lived on the brink of indigence (at least, if one accounted for changing levels of customary standards); since the coming of the machine they had certainly never risen above subsistence level; and now that the economic society was finally taking shape, it was an indubitable fact that decade after decade the material level of existence of the laboring poor was not improving a jot, if, indeed, it was not becoming worse... (trickle down theory had not worked, mystifying economists.  The old canards are the best).

The acceptance of near-indigency of the mass of the citizens (roughly 47 to 99 percent apparently) as the price to be paid for the highest stage of prosperity was accompanied by very different human attitudes. Townsend righted his emotional balance by indulging in prejudice and sentimentalism. The improvidence (lacking personal responsibility) of the poor was a law of nature, for servile, sordid, and ignoble work would otherwise not be done. (born to be vile?) Also what would become of the fatherland unless we could rely on the poor? "For what is it but distress and poverty which can prevail upon the lower classes of the people to encounter all the horrors which await them on the tempestuous ocean or on the field of battle?"...

Robert Owen, in 1817, described the course on which Western man had entered and his words summed up the problem of the coming century...The organization of the whole of society on the principle of gain and profit must have far-reaching results. He formulated these results in terms of human character. For the most obvious effect of the new institutional system was the destruction of the traditional character of settled populations and their transmutation into a new type of people, migratory, nomadic, lacking in self-respect and discipline—crude, callous beings...

He proceeded to the generalization that the principle involved was unfavorable to individual and social happiness. Grave evils would be produced in this fashion unless the tendencies inherent in market institutions were checked by conscious social direction made effective through legislation...The Industrial Revolution was causing a social dislocation of stupendous proportions, and the problem of poverty was merely the economic aspect of this event. Owen justly pronounced that unless legislative interference and direction counteracted these devastating forces, great and permanent evils would follow...

The trading classes had no organ to sense the dangers involved in the exploitation of the physical strength of the worker, the destruction of family life, the devastation of neighborhoods, the denudation of forests, the pollution of rivers, the deterioration of craft standards, the disruption of folkways, and the general degradation of existence including housing and arts, as well as the innumerable forms of private and public life that do not affect profits...

Two vital functions of society, the political and the economic, were being used and abused as weapons in a struggle for sectional interests. It was out of such a perilous deadlock that in the twentieth century the fascist crisis sprang...

Economic liberalism (liberal in the sense of laissez-faire) was the organizing principle of a society engaged in creating a market system. Born as a mere penchant for non-bureaucratic methods, it evolved into a veritable faith in man's secular salvation through a self-regulating market. Such fanaticism was the result of the sudden aggravation of the task it found itself committed to: the magnitude of the sufferings that were to be inflicted on innocent persons as well as the vast scope of the interlocking changes involved in the establishment of the new order...

The global sweep of economic liberalism can now be taken in at a glance. Nothing less than a self-regulating market on a world scale could ensure the functioning of this stupendous mechanism. (one world government) ...No wonder that economic liberalism turned into a secular religion once the great perils of this venture were evident. There was nothing natural about laissez-faire; free markets could never have come into being merely by allowing things to take their course...The road to the free market was opened and kept open by an enormous increase in continuous, centrally organized and controlled interventionism...  (At the end of the economic continuum, both extreme laissez-faire and communism meet, becoming almost indistinguishable in their destruction of the individual and their particular social institutions which inhibit centralized control).

Stabilization of currencies became the focal point in the political thought of peoples and governments; the restoration of the gold standard became the supreme aim of all organized effort in the economic field. The repayment of foreign loans and the return to stable currencies were recognized as the touchstones of rationality in politics; and no private suffering, no infringement of sovereignty, was deemed too great a sacrifice for the recovery of monetary integrity (austerity anyone?)

The privations of the unemployed made jobless by deflation; the destitution of public servants dismissed without a pittance; even the relinquishment of national rights and the loss of constitutional liberties were judged a fair price to pay for the fulfillment of the requirement of sound budgets and sound currencies, these a priori of economic liberalism...

The root of all evil, the liberal insists, was precisely this interference with the freedom of employment, trade and currencies practiced by the various schools of social, national, and monopolistic protectionism since the third quarter of the nineteenth century; but for the unholy alliance of trade unions and labor parties with monopolistic manufacturers and agrarian interests, which in their shortsighted greed joined forces to frustrate economic liberty, the world would be enjoying today the fruits of an almost automatic system of creating material welfare.  

Liberal leaders never weary of repeating that the tragedy of the nineteenth century sprang from the incapacity of man to remain faithful to the inspiration of the early liberals; that the generous initiative of our ancestors was frustrated by the passions of nationalism and class war, vested interests, and monopolists, and above all, by the blindness of the working people to the ultimate beneficence of unrestricted economic freedom to all human interests, including their own.

A great intellectual and moral advance was thus, it is claimed, frustrated by the intellectual and moral weaknesses of the mass of the people; what the spirit of Enlightenment had achieved was put to nought by the forces of selfishness In a nutshell, this is the economic liberal's defense. Unless it is refuted, he will continue to hold the floor in the contest of arguments...

To separate labor from other activities of life and to subject it to the laws of the market was to annihilate all organic forms of existence and to replace them by a different type of organization, an atomistic and individualistic one(a vision of Orwell's 1984).

This effect of the establishment of a labor market is conspicuously apparent in colonial regions today. The natives are to be forced to make a living by selling their labor. To this end their traditional institutions must be destroyed, and prevented from re-forming, since, as a rule, the individual in primitive society is not threatened by starvation unless the community as a whole is in a like predicament...

Now, what the white man may still occasionally practice in remote regions today, namely, the smashing up of social structures in order to extract the element of labor from them, was done in the eighteenth century to white populations by white men for similar purposes... (the economic hitmen come home again).

Mankind was in the grip, not of new motives, but of new mechanisms., Briefly, the strain sprang from the zone of the market; from there it spread to the political sphere, thus comprising the whole of society. But within the single nations the tension remained latent as long as world economy continued to function...

Eventually, the moment would come when both the economic and the political systems were threatened by complete paralysis. Fear would grip the people, and leadership would be thrust upon those who offered an easy way out at whatever ultimate price. The time was ripe for the fascist solution.

The fascist solution of the impasse reached by liberal capitalism can be described as a reform of market economy achieved at the price of the extirpation of all democratic institutions, both in the industrial and in the political realm. The economic system which was in peril of disruption would thus be revitalized, while the people themselves were subjected to a re-education designed to denaturalize the individual and make him unable to function as the responsible unit of the body politic.

This re-education, comprising the tenets of a: political religion that denied the idea of the brotherhood of man in all its forms, was achieved through an act of mass conversion enforced against recalcitrants by scientific methods of torture.

The appearance of such a movement in the industrial countries of the globe, and even in a number of only slightly industrialized ones, should never have been ascribed to local causes, national mentalities, or historical backgrounds as was so consistently done by contemporaries...

In fact, there was no type of background— of religious, cultural, or national tradition—that made a country immune to fascism, once the conditions for its emergence were given. Moreover, there was a striking lack of relationship between its material and numerical strength and its political effectiveness. The very term "movement" was misleading since it implied some kind of enrollment or personal participation of large numbers. If anything was characteristic of fascism it was its independence of such popular manifestations. Though usually aiming at a mass following, its potential strength was reckoned not by the numbers of its adherents but by the influence of the persons in high position whose good will the fascist leaders possessed, and whose influence in the community could be counted upon to shelter them from the consequences of an abortive revolt, thus taking the risks out of revolution.

A country approaching the fascist phase showed symptoms among which the existence of a fascist movement proper was not necessarily one. At least as important signs were the spread of irrationalistic philosophies, racialist aesthetics, anticapitalistic demagogy, (and procapitalist demagogy for that matter) heterodox currency views, criticism of the party system, widespread disparagement of the "regime," or whatever was the name given to the existing democratic set-up...

What we termed, for short, "fascist situation" was no other than the typical occasion of easy and complete fascist victories. All at once, the tremendous industrial and political organizations of labor and of other devoted upholders of constitutional freedom would melt away, and minute fascist forces would brush aside what seemed until then the overwhelming strength of democratic governments, parties, trade unions.

If a "revolutionary situation" is characterized by the psychological and moral disintegration of all forces of resistance to the point where a handful of scantily armed rebels were enabled to storm the supposedly impregnable strongholds of reaction, then the "fascist situation" was its complete parallel except for the fact that here the bulwarks of democracy and constitutional liberties were stormed and their defenses found wanting in the same spectacular fashion...  (or as Orwell put it, a revolution is the kicking in of a rotten door - Jesse)

Fascism, like socialism, was rooted in a market society that refused to function. Hence, it was world-wide, catholic in scope, universal in application; the issues transcended the economic sphere and begot a general transformation of a distinctively social kind. It radiated into almost every field of human activity whether political or economic, cultural, philosophic, artistic, or religious. And up to a point it coalesced with local and topical tendencies. No understanding of the history of the period is possible unless we distinguish between the underlying fascist move and the ephemeral tendencies with which that move fused in different countries."

Karl Polanyi, The Great Transformation, 1944

Net Asset Value of Certain Precious Metal Trusts and Funds

19 September 2012

Gold Daily and Silver Weekly Charts - Romulus and Remus

It looks like there will be an attempt to cap gold and silver until the election or Kingdom come, whichever comes first. Some days it is hard to tell.  The elites of the world seem quite determined to have another go at provoking destruction on a massive scale to escape the ennui of a Great Depression, successfully achieved once again.

I should like to think that the key resistance on the charts is rather obvious, for both gold and silver. Even a dreary fellow like Bernanke can see it, although it appears invisible to certain precious metals analysts, who have a less expansive repertoire of forecasts than the Magic 8 ball.  All they can say is 'lower.'   A coin flip has a better track record that those knuckleheads.  And that in itself should tell you something about their true function in serving their employers.

If the financial cartel does lose control of it here, they will back up to the next higher level and try to hold it even more firmly there.  Again the lines of resistance are fairly well established.

While it is possible, if the CFTC actually does its job and reports honestly about the manipulation in the silver market, I will be duly astonished. If they say anything, it is more likely to be a coverup and a series of thinly done excuses for what will some day be known as massive interference with the markets that started from 'good intentions' but just got out of control due to human stupidity and greed.

Stupidity and Greed could be the twin founders of Wall Street, represented by JP Morgan and Goldman Sachs, suckling on the Fed like Romulus and Remus, the mythical founders of ancient Rome.