26 September 2013

Gold Daily and Silver Weekly Charts - Quiet Trade Post Expiration In the Last Week of September

Today Jack Lew says that the US will hit the debt ceiling on October 17th. I have heard that the stop date is next Tuesday from a legal perspective. I think Lew is talking the practical exigencies of dodgy accounting and the books he is currently juggling.

I suspect that most of what is going on here is political theatre as some of the House Republicans are putting on a good show for their base.

But it is most likely that adults in the government will eventually rein them in after they have played their part and can face their constituent base and say, 'See I tried.'

But given that the US dollar is the world's reserve currency, these antics take on the character of more than just a domestic squabble.  They are stressing the confidence of the world in the US' ability to continue to manage its reserve currency with a rational regard for justice, and the needs of the rest of the world in addition to their self-aggrandizing antics.  I don't think those in the Congress realize that they are providing aid and boosting the morale of the 'opposition' during a currency war.  But they may very well be.  I could easily see China and Russia talking to the members of the Third World and asking them if this is how they wish to continue to invest the future of their nation's wealth.

To on one hand 'manage' the price of precious metals to achieve your goals and one hand, and on the other to engage in stunts and childish antics that bring your own sanity and judgement into question, and encourage people to place their wealth in assets without such serious counter party risk, is self-defeating at least, and verges on the irrational.

There is so much that needs to be done that it is a shame that the Congress and the Administration have lost their ties to the great majority of their constituents, and have instead given themselves over to the most vocal and the wealthiest.

This nonsense about the leaking of the Fed's FOMC decision, that looks like it might have come out of the embargoed news pool, but may have come out of the Fed itself, is very discouraging because it speaks to the corrupt nature of US markets.

The decision by the CFTC to drop its five year 'investigation' of manipulation in the silver market was discouraging but expected. It appears that learning is going to come the hard way, but that is regrettable because all too often it is innocent people who get the harm, and the jokers who gamed the system in the first place see any new crisis as an opportunity for more looting.

But that is just how it goes sometimes. Gold and silver look like safe havens here, but in the short term anything can happen because the Administration and the Congress are too busy with their political gamesmanship to actually enforce the laws that are already on the books.

It is a currency war after all, and one can try and hide much mischief as has been done in the continuing 'crises' we have seen since 1999. But it tends to add up over time.

There was no physical bullion movement in or out of the COMEX warehouses yesterday. October is the next active delivery month.

Have a pleasant evening.