21 March 2014

Gold Daily and Silver Weekly Charts - The Hunger Games

Last night Nick Laird showed me some excellent original data analysis from his site, Sharelynx.com, that demonstrates that a decline in the price of gold during an FOMC week is no sure thing, but more normally distributed. And we have to balance that against a different, and much less statistically robust graph, that was on ZH, and which I also presented here, that clearly showed declines in FOMC weeks, and no similar declines in off weeks, but for a much shorter period of time.

Nick looked at full weeks, and even much tighter spreads of days, but only looked at FOMC events, and a lot of them going back to 2006, and then even to 1994. I plan on looking at some of his data much more closely, but it does drive home the conclusion that simply betting blindly on around certain events does not work. If it was that easy, everyone would do it. Rather, there are other variables at play, of that I am certain. And I will take a much closer analytical look at all the data, and not just cycles and dates, when I have a greater opportunity.

Next week is an option expiration for the precious metals futures on the Comex. A large tranche of gold was deposited into the JPM warehouse. Perhaps these are preparations for the next active month for physical bullion which is April. Otherwise things were quiet.

Another thing of which I am reasonably confident is that there is a 'currency war' in progress, and some great changes in the composure and complexion of international finance and trade. This 'war,' more like a new kind of cold war than a military war, ebbs and flows, manifesting itself first in one way and then in another. And sometimes it pokes its head out of the financial pages and onto the headlines, as it has recently done in the Ukraine and Crimea.

As you might always expect in times of change and contention, truth is in short supply. And I think some long standing trends are coming to a head. And so we should expect the unexpected, and look for things to happen, particularly from the top down, that we had not seen coming.

I will never forget how, shortly after the tragic events of 911, and the expected response against the Taliban in Afghanistan, that the word was given out from the top down, 'attack Iraq.' And people looked at each other and said with their eyes, what? And the media machine was put into gear, and the march to Iraq was begun.

I mean that sort of unexpected thing, that does not seem to make sense if you have been following some logical sequence of things, but that the media picks up from the top and repeats without fairly batting a jaundiced eye.

If you want a vision of the future, I would not look for a 1984 type boot stomping endlessly on a human face. Rather, I think we will see the kind of bifurcated society of a few effete haves in a few cities, and the great number of have nots, as is depicted to some effect in The Hunger Games. President Snow reminds me of the consummately ruthless CEO, moreso than a dictator. The various District have been reduced to their basic economic elements, and the people of the Capitol are living large on their efforts.

Like most works of fiction it is an oversimplification. But it has a resonance with the kids, wildly popular in the teens and younger set. The young have a tendency to pick up on trends based on behaviours that are not carried overtly perhaps in the official news and the spoken words of adults. When the books became popular I read them, just to keep in touch with my own children and what was attracting those of them who were thinking. And now the movies are coming out. The books are better, but you may find the movies to be diverting.

So it looks like interesting times ahead. And may the odds be ever in your favour.

Have a pleasant weekend.