31 December 2014

Gold Daily and Silver Weekly Charts - And the First Runner Up Is....

"...the burning roof and tower, and Agamemnon, dead."
There is certainly no doubt that 2014 was 'the Year of the Dollar,' as King Buck staged a rally, based on a comparison to some historically important currencies as embodied in the DX index.

I have shown this is the latest update of the US Dollar Very Long Term Chart here.

In fact, the greenback has hit levels not seen since the last financial crisis.  You know, the one in 2008 that everyone has already forgotten, and which seems just as likely to reoccur as if we had done little or nothing about what had caused it in the first place. 
I was amused to see a chart posted over at Zerohedge that shows that the next best performing currency in the world after the dollar was gold of all things.   That chart is shown below.  This presumes that one would count gold as a proper 'currency.' 
I would say not quite, since technically no sovereign will admit to it at this point.  There is a patina of official sanction about a proper money.  The central banks all hold it, and some are buying it quite vigorously especially since 2006.  So it does have the character of a natural currency and enduring store of value, despite the blatherings and propaganda campaigns of its official detractors. 

Perhaps propaganda is too strong a word for our polite society, all whitewash on the outside, with the bones of the brutally savaged carefully hidden within..  'Manufacturing consent' and 'molding perceptions' is what we call the persuasion campaigns in our genteel era.  Propaganda is an ugly word, so let's put some icing on it and call it something else.

In addition to being a 'store of value' a currency must be a 'money' and for now at least it is the ultimate foreign currency, being exchangeable around the world, but no where treated as a routine means of purchasing items directly with some sort of official nod to its role as a form of money.
That may change in the years ahead.  I don't wish for it too eagerly, because I would like to see gold run a bit in value, mostly making up for lost time as it were, before nations get involved and start trying to fix its prices officially.  For now they are doing it unofficially, or at least some of them are doing so, and they are probably doing a bad job of it, in the longer term scheme of things.

They'll never learn. Never.  It is in their very nature not to learn.  They are not learning people.  They are headstrong power people, always wanting to run the show according to their own fancies, and therefore consistently reaching for some combination of force and fraud to impose their wills and their ideas.  Because they know better.  They are the epitome of progress, thoroughly modern and the recipients of special knowledge that sets them above and beyond all others.

"Queens have died, young and fair.  Dust hath closed Helen's eye..."
But as we know, it's all rubbish.  They speak well, and learn to impress, but they don't know anything new.  They mostly practice the same old tricks with different names and fancier titles.  An object lesson will therefore most likely be required, to be administered by the back of the invisible hand when their schemes go off in a bad way, as they seem to do about every five or six years now.
Thank you for your patronage at Le Café for another year.  I am pleased to note that there have been 34,915,180 customers served since opening at this location in February, 2007.  
This is not bad for what is most like just a small village café, off the main roads and patronized largely by locals, travelers and the disposed.  The goal is to provide a warm and familiar refuge for those who have become weary of the often tasteless fare produced and served in volumes at the larger commercial establishments of the day.
And there is often entertainment, and pleasant diversions from the day!  lol
If you have obtained any benefits from this establishment during this year past, as always, please pay it forward.  There is a decided lack of love in the world, and unrewarded kindness often works wonders for both the recipient and the one who gives, not for advantage, but out of a recognition of our own obligations, and at its best, love.
Have a very Happy New Year.

SP 500 and NDX Futures Daily Charts - Not with a Bang, But a Whimper

Having served its purpose, the paint was peeling off the tape with some vigor today.

Mr. Market shed some of its recent water weight, from the watering of its stocks indices, for the purposes of improving the bonuses of the financial class for the end of the year.

The first week of January may have an upward bias, depending on what happens. We may see some follow through selling on Friday, but the markets will be abnormally quiet most likely.

It is the whole of January that may likely set the tone for the new year, and not the first week. So we should watch this next month rather closely, so see what the themes might be, and how speculators, I would not dignify what they do by calling them investors, take the economic news as 'good' or 'bad' for certain classes of financial instruments.

Have a Happy New Year.

US Dollar Very Long Term Chart for Year End 2014

The US dollar has ended this year on a high note not seen in some time, not since the time of the financial crisis and collapse in 2008.

Dollar strength, at least in this index, is largely a reciprocal function of weakness in the euro, and to a lesser extent the yen, the pound, and the loon.

I have not worked the data yet, and may not do so for some time, but I would imagine that this spike in dollar strength will see the same sort of demand coming out of Europe as we saw in the two prior instances labeled Eurodollar Squeeze I & II.

This time it is most likely helped by the ongoing crisis in the yen and the ruble, the first being the objective of Abenomics, and the latter being the target of the West, through the actions of their sanctions and the currency action of their Banks, in this phase of the ongoing currency war.

In general, a stronger currency helps the financial and foreign investment sectors of a nation, and is much less helpful for the manufacturing and producing sectors.  It tends to make exports more expensive, and imports more affordable. And it gives purchasing power for those of a mind to acquire and privatize major foreign assets.

This is not a prescription for a recovery in a real producing economy, but it is a boost to the moneyed class of financiers.  This is in keeping with the financialization of the economy that came to fruition during the 1990's, and has continued to dominate the economy and the political process ever since.

Let's see how things develop in 2015.

30 December 2014

The Japanese Economic Dilemma in a Nutshell

Here is a note from a friend in Japan:
In today's Nikkei (Japanese version), on page 5, tucked behind all the hype about the government's decision to lower corporate taxes, in hopes that major companies will raise wages, was a short article on "three miscalculations about the economy" this year.
1. Tax revenues increased with the increase in the sales tax but consumer spending fell. Tax revenues expected to increase by about 5 trillion yen.
2. Weaker yen and higher stock market improved family assets for some I would say, but exports did not improve, and were about 8% lower than 4 years ago.
3. CPI (excluding fresh food) increased, resulting in a real wage decline. Rreal wages have been falling since mid 2013 and are now around 4% lower year over year.
Over the past few days I have been reading about the so-called lost decade of the 1990s and the government's policy decisions to try to kick-start the economy.

In 1990 the government had about 60 trillion in tax revenues and 69 trillion in general account total expenditures.

Now, the government estimates 52 trillion in tax revenues for fiscal 2014 but has more than 95 trillion in expenditures.

Even a second grade student can see that something is not working.

As you know, I think that there are three things that must be done.

Reform, reform, reform.

The Japanese economy is burdened with an unusually bad demographic problem, made much worse by the burdens of insider dealing, crony capitalism, and zombie banks and their corporations.

And its greatest burden of all is an elite that serves itself and its friends first and foremost, and that finds a greater kinship with its global counterparts than with the people whose interests it purports to represent.
"The conflict between the East and West was designed to scare the people of the world into accepting a convergence of these two monopoly systems of authoritarian power. The end result was to be a new Imperial Order and a New World Empire run by an elite self-perpetuating oligarchies from the leading nations of the earth."

Carroll Quigley, Tragedy and Hope, p. 860

Comex Gold Futures Contracts and Options Calendar 2015


Gold Daily and Silver Weekly Charts - Liar's Poker to the Last - A Banquet of Consequences

Gold and silver caught a sharp bid on the London PM fix and NY open, probably an adjustment from the smack down yesterday that coincided with the demise of the December contract. See calendar below.

These 'technically' oriented sharp moves up and down are a symptom of what is wrong with the Comex, which will ultimately lead to a failure on the exchange of some sort.
Silver moved out of the warehouses as it tends to do.  Gold, not so much.  Plenty is 'delivered' but little is taken.   The reckoning will come when the music stops.  Until then the dancing must continue, because there is money to be made at it.
It just matters how long, and how wild the swings might become, as the divergence between world of paper in New York and London and the bullion exchanging hands in the real world more violently divergences, and how it converges again.
What could possibly go wrong?
Have a pleasant evening.


Cena Trimalchionis: The Feast of Trimalchio, Wealthy Vulgarian

'The Feast of Trimalchio'
is from The Satyricon by Titus Petronius, which many consider to be the first Western novel.  It was an unusual form and subject matter, both a fictional story and satire about the dissolution of contemporary Rome.
As you may recall T. Petronius, Nero's arbiter eligantiarum, made a fictionalized appearance as a minor character in the novel Quo Vadis by Henryk Sienkiewicz.

Petronius never made any quote about business reorganization. A false quote made the rounds some time ago.

SP 500 and NDX Futures Daily Charts - Slouching Towards Year End

Mr. Market 2014 takes a final bow
Hard to believe that this is the second to last day of the year.

Stocks sold off in a very quiet trade, most likely a little cash raising in advance of a light spray on the tape tomorrow.

Most of the adults are off for the year now, and the juniors are executing their pat instructions for the most part.

The first week of January might very well see a rehearsed rally with any new money coming in, again depending on what else happens and the temper of the volumes if any.

Risks are obviously mispriced, but the bill may not arrive at the table for a little while yet, and timing is everything.

Have a pleasant evening.

US Power Elite: An Echo Chamber of Illusions, Delusions, and Subsequent Policy Errors

"A monopoly on the means of communication may define a ruling elite more precisely than the celebrated Marxian formula of monopoly in the means of production."

Robert Anton Wilson

I watched the latter part of a televised discussion called Surveillance 2015 which included Sallie Krawchek, Mohamed El-Erian, Sheila Bair, and Mario Gabelli with Tom Keane as host at the high-toned, dark-wooded drinking salon in the Waldorf-Astoria in New York City.
There is no one in the discussion that you could dislike, as they are all affable and intelligent people who are most likely very good company at a cocktail party and acknowledged as subject matter experts in their own areas.
I may have missed the first part where hopefully they discussed some things that they understand, like the workings of the US markets, although that is no guarantee of a frank and open discussion. Or maybe I was spared the usual self-congratulatory success fest.  Mission accomplished, and all that.
But the groupthink when it came to discussing global events was absolutely stunning in its glib triumphalism and selective shallowness.
Their read on Putin and the situation with Russia was almost sad in its cartoon like shallowness.  Russia is on the ropes, and it is just a question whether Putin folds now, or does something stupid to distract his people, like cutting off the energy to Europe and driving them into recession. The odds are fifty- fifty.
But the US is pristine, above it all, the global puppet master.   Exceptional and winning!
I think that pat description of Russia with an economy that is on the edge, with the option to do something stupid to take the peoples' minds off their misery, fits Obama and the new Congress just as well as Russia.  The difference is that we are seeing things from within the dollarsphere of wealth illusion.
How can one discussion the global situation without getting around to including China until at the very end, almost as an afterthought?   And to discuss Russia's options without including China and a few other emerging countries which is still where the growth remains?  At least real growth in building infrastructure and actual products, instead of just overcharging each other for healthcare and financial services and calling it growth?
Part of the problem I am sure is that we are given to the phenomenon of mistaking wealth for intelligence, and on subjects in which the person has little to no expertise beyond that which an intelligent person who read newspapers and magazines might gather.  There is quite a bit of that going around.  Traders and bureaucrats making policy calls is like watching a fox hunt, to paraphrase Oscar Wilde:  the unspeakable in full pursuit of the indigestible.
When the US gets blindsided next year, and I think it is more like 75-25 that they will, it is will be because the power elite in the US is living in an echo chamber of their own thoughts, sharing a distorted vision of their own country, not to mention the world, from the cocoons of Washington and New York City.
When they do the wrong things, and respond clumsily and ineffectively again and again, we should have no confusion about why they are doing so.   They are marching to the beat of a very different drummer. 
What a brave new world, that is so dangerously out of touch with the shared reality of their fellows, and the rest of the world. 

29 December 2014

Gold Daily and Silver Weekly Charts - We Steal, Therefore We Are

Jamie Dimonimus, Imperial Banker
"Plunderers of the world, when nothing remains on the lands to which they have laid waste by wanton thievery, they search out across the seas. The wealth of another region excites their greed; and if it is weak, their lust for power as well.

Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich. Robbery, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace."

Auferimus ergo sumus.  Nova Roma.

There was intraday commentary on globalization and the failure to resist and reform its most pernicious aspects here.

This is relevant to gold and silver, because the forces for a corporatist world government are gathered under the standard of a financial cartel based on the United States Dollar.
Interesting coincidence in the number of letters for each word there by the way.  Sorry could not resist that tease, lol.  You know it doesn't really mean anything in this context. But the irony is worth a laugh.

Greenspanus Maxiumus, Imperial Regulator
Today's action in the metals was obvious, and fairly pointless, providing the opportunity for the pigmen to take their egos out for a walk, and to skin a few more nickels and dimes from the short term punters.   Impressive show of force.  Look, we can rig global markets with impunity.
Nothing of significance happened in the Comex precious metals.   What a surprise.  
I spent most of this slow day watching some movies on Youtube and reading. 

China continues to import some impressive amounts of gold bullion.
And so it goes.

Have a pleasant evening.