"O Jerusalem, Jerusalem. You who murder the prophets, and abuse those whom God has sent as messengers to you. How often I have longed to gather your children together, as a hen gathers her young under her wings— but you would not let me. As you have willed it, so your house is now yours to command— but is made desolate. For I tell you truly, you will not see me again until you say, ‘Blessed is he who comes in the name of the Lord.'” Matthew 23:37-39
"Full fathom five thy father lies,
Of his bones are coral made,
Those are pearls that were his eyes,
Nothing of him that doth fade,
But doth suffer a sea-change,
into something rich and strange."
William Shakespeare, The Tempest
Let's see how we do through the Non-Farm Payrolls Report tomorrow.
Like most of the really big, substantial changes, this one continues on, moving slowly, lulling almost everyone into a false sense of continuity. And then the sea-change comes.
According to Bloomberg, even with this sluggish March trading, this was the 'best quarter for gold in 30 years.'
We live in a time of great trend changes, in finance, in politics, and power.
Traders were continuing to sit on their hands for the most part, judging by the volumes, waiting to see what unfolds from the Non-Farm Payrolls Report tomorrow.
The market has had a nice upwards bias thanks in large part to Chairperson Yellen and her dovish cooing about easy money. The problem is that most if not all of this easy money is being used to inflate financial assets bringing profits to the top ten percent.
The real economy continues to languish.
And so I think that risk is grossly underpriced, right now.
Earnings season is dead ahead, and I suspect that they will not be all that good.
“Pity the nation whose people are sheep,
and whose shepherds mislead them.
Pity the nation whose leaders are liars, whose sages are silenced,
and whose bigots haunt the airwaves.
Pity the nation that raises not its voice,
except to praise conquerors and acclaim the bully as hero
and aims to rule the world with force and by torture.
Pity the nation that knows no other language but its own
and no other culture but its own.
Pity the nation whose breath is money
and sleeps the sleep of the too well fed.
Pity the nation — oh, pity the people who allow their rights to erode
and their freedoms to be washed away.
My country, tears of thee, sweet land of liberty.”
Lawrence Ferlinghetti
"I think that what we need to do is pretty clear. If one views the current version of the Democratic establishment as a different kind of evil rather than the lesser of two evils, one has to withhold support and votes regardless of the consequences. For me, it will start by not voting for Hillary. Then perhaps it would be worthwhile to organize to challenge the corporate wing."
Jesse's Samoan Attorney
I hear this from quite a few of the professional class, who formerly might have leaned for the more liberal side of the political equation in the recent past. They have become utterly disillusioned with the personal greed and duplicity of the political establishment.
Speaking of which I enjoyed this video interview with Thomas Frank about What Has Gone Wrong with the Democratic Party.I thought it was a brilliant dissection of what has happened with that party, and the liberal establishment in general. The GOP gets plenty of attention with its own problems, which are rather significant.
I normally do not follow party politics all that closely, but one would have to be fairly oblivious not to see the shifting of the bases under the established leadership of both parties in the US. And I believe that this has some analogues in Europe as well, and especially the UK and France.
And the times, they may be a-changin'.
Gold moved lower today WITH the dollar, as the VIX measure of volatility moved to its lows for this year at least, while the SP 500 and the Dow Industrial hit their highs for this year.
Smells like the end of quarter to me.
The Non-Farm Payrolls report will be 'the big thing' on Friday.
A number of people forwarded me a link to that really embarrassingly clumsy video hit piece on gold in the Financial Times Alphaville last week Izabella Kaminska. I wonder if Alphaville is the infomercials section of FT.
It was actually so bad, such a chain of non sequiturs, it was a howler. I have refrained from commenting on it, or the 'serious' blogger who was touting it, because it was not even in the ballpark of serious analysis. I took it as a desperate attempt by those who are holding on to the shortening end of their bullion ropes, marshalling the forces of their minions and courtiers. LOL.
I have included a brief video from Jim Rickards below as an antidote.
But all things in their own time. Let's see what happens. As I have said, I suspect we will be seeing quite a short squeeze on bullion, perhaps around the middle of this year.
Today Fed Chair Janet Yellen said that 'caution should be advised in raising rates.'
And the markets went off in the 'risk on' direction as the dollar slumped, stocks soared, and gold caught a bid as the smell of easy money for the foreseeable future was in the air.
This is nuts.
I suspect that the financial class is celebrating the end of the first quarter, or at least trying to give their fund performance that luster that attracts more investors and bigger bonuses.
It is just as likely some other Fed head will come out tomorrow and say things about the improving economy and the need to guard against wage growth and the kind of inflation that does not put money directly into the pockets of the money masters and their friends.
Do you ever get the feeling that the powers-that-be are no longer treating the US as a 'going concern?'
Lest we forget, the Non-Farm Payrolls report is coming out on Friday. If it comes in hot, we might see some reversals. And if it comes in weakly, perhaps more rally. Let's see if they can steer this number through the Scylla and Charybdis of their credibility trap. And don't forget to look for the prior month revisions.
March is historically a rough month for the precious metals. Lets see how we get past this week, and if we can do something to set this handle and activate a bullish formation.
Gold continues to lead silver here, and that is all about the 'risk trade.'
Today was an exceptionally quiet day in the markets, with volumes off almost 30% from the twenty day moving average.
Most likely this is because of the number of people who are on Easter holiday, quite popular in Europe and a thing for the upper crust in the states.
Economic news came in weakly this morning, with a big downward revision in the prior month for consumer spending and this latest number barely positive.
Stocks are largely dependent on corporate buying which is an established trend that may be running out of gas, if not already running on fumes as corporate bosses squeeze the last dollars out of the business to keep up their bonus hopes.
"Gold is not an investment, because it has no risk and no return. Warren Buffett's well-known criticism of gold is that it has no return and therefore no chance of compounding his wealth.
He is right. Gold has no yield; it is not supposed to, because it has no risk. If you buy an ounce of gold and keep it for ten years, you end up with an ounce of gold— no more, no less. Of course, the 'dollar price' of an ounce of gold may have changed radically in ten years. That‟s not a gold problem; it is a dollar problem.
To get a return on an investment, you have to take risk. With gold, where is the risk? There is no maturity risk, because it is just gold. It will not mature into gold five years from now; it is gold today, and always will be. Gold has no issuer risk, because nobody issues it. If you own it, you own it. It is not anyone else's liability.
There is no commodity risk. With commodities there are other risks to consider. When you buy corn, you have to worry: does it have bugs in it? Is it good corn or bad corn? It‟s the same thing with oil; there are 75 grades of oil around the world. But pure gold is an element, atomic number 79. It is always just gold...
Wall Street sponsors, U.S. banks, and other members of the London Bullion Market Association (LBMA), have created enormous volumes of 'gold products' that are not gold. These are paper contracts. These products include exchange-traded funds, ETFs, the most prominent of which trades under the ticker symbol GLD. The phrase 'ticker symbol' is a giveaway that the product is not gold. An ETF is a share of stock. There is some gold out there somewhere in the structure, but you do not own it— you own a share. Even the share is not physical; it is digital and easily hacked or erased."
Jim Rickards, The New Case For Gold
It is true that money provides no interest payments if it is truly money. If you hold US dollars as cash, for example, you obtain no interest or dividends on them. If you did, it would interfere with their neutrality as a medium of exchange, as people would tend to save, hold, hoard them.
You get the interest from money by 'loaning' it to someone else, and accepting a form of obligation with risk, thereby obtaining interest payments as compensation for that risk. This is what a bank deposit has been traditionally, at least before the days of confiscatory negative interest and the gross and purposeful mispricing of risk.
The same is true of government bonds, which are not money but loans with risk compensation as interest payments.
However gold is natural money, and not 'official money' because it is recognized as such by few governments, and must be exchanged for the official currency in payment of taxes for example.
I would quibble a bit with Jim about gold not being an 'investment' if I was inclined to split hairs, because it can be and is often used as a long term hedge for example, against loss in dollar assets based on dollar devaluation as inflation.
His colleague sitting next to him on the dais in Tokyo describes gold in a hedging trade which he is now holding. Why would the other components of the trade be considered investments if held long enough, but not the gold? Perhaps one might calls this a 'speculation' rather than an 'investment' but I fail to see the difference.
Land is thought of as an investment in the common language, even though it pays no interest and generates no income in and of itself except as it is hired our for use, or used directly as a component of some overall productive endeavor, with risk.
And if I hold a tech stock for ten years that pays no dividends, is this not still a type of 'investment?'
Typically the difference between 'trade/speculation' and 'investment' have been related to duration and the volatility of the difference between the expected and unexpected outcomes. It is a small distinction, but I am not willing to conceed this to Buffett, who seems to betay a narrowing of outlook that often comes to those too heavily specialized for too long in one thing or another.
Depending on the assumptions which one has made, the manner in which the holding of the asset is structured, and especially in regard to intended duration, I can see any number of instances in which gold and silver can be considered 'investments' without paying dividends and interest, but having some probablility of gains against some other thing.
As for stocks and other assets, I don't even wish to think about the times that some short term 'trade' has turned into a longer term 'investment' because of some poorly estimated probability of risk and duration.
"See, my servant shall prosper,
he shall be raised high and greatly exalted.
Even as many were amazed at him—
so marred was his look beyond human semblance
and his appearance beyond that of the sons of man—
so shall he startle many nations,
because of him kings shall stand speechless;
for those who have not been told shall see,
those who have not heard shall ponder it.
Who would believe what we have heard?
To whom has the arm of the Lord been revealed?
He grew up like a sapling before him,
like a shoot from the parched earth;
there was in him no stately bearing to make us look at him,
nor appearance that would attract us to him.
He was spurned and avoided by people,
a man of suffering, accustomed to infirmity,
one of those from whom people hide their faces,
spurned, and we held him in no esteem.
Yet it was our infirmities that he bore,
our sufferings that he endured,
while we thought of him as stricken,
as one smitten by God and afflicted.
But he was pierced for our offenses,
crushed for our sins;
upon him was the chastisement that makes us whole,
by his stripes we were healed.
We had all gone astray like sheep,
each following his own way;
but the Lord laid upon him
the guilt of us all.
Though he was harshly treated, he submitted
and opened not his mouth;
like a lamb led to the slaughter
or a sheep before the shearers,
he was silent and opened not his mouth.
Oppressed and condemned, he was taken away,
and who would have thought any more of his destiny?
When he was cut off from the land of the living,
and smitten for the sin of his people,
a grave was assigned him among the wicked
and a burial place with evildoers,
though he had done no wrong
nor spoken any falsehood.
But the Lord was pleased
to crush him in infirmity.
If he gives his life as an offering for sin,
he shall see his descendants in a long life,
and the will of the Lord shall be accomplished through him.
Because of his affliction
he shall see the light in fullness of days;
through his suffering, my servant shall justify many,
and their guilt he shall bear.
Therefore I will give him his portion among the great,
and he shall divide the spoils with the mighty,
because he surrendered himself to death
and was counted among the wicked;
and he shall take away the sins of many,
and win pardon for their offenses."
Isaiah 52:13 - 53:12
"Jesus said, 'I thirst.'
There was a vessel filled with common wine.
So they put a sponge soaked in wine on a branch of hyssop
and put it up to his mouth.
After he had taken the drink he said,
'It is accomplished.'
And bowing his head, he gave up his spirit."
John 19:28-30
"And the centurion, standing watch of him, having seen all this, how he died, crying out as he yielded up his spirit, said, 'Truly this man was the Son of God.'"
"And the angel said to the women, 'Do not be afraid. I know you are looking for Jesus, who was crucified. He is not here; He is risen from the dead. Go and tell the others. This is my message to you.'"
Mt 28:5-8
"For God so loved the world..."
John 3:16
Gold and silver were pushed lower today after an early rally attempt.
The US dollar managed to add a little to its multi-day rally.
The Bucket Shop was relatively quiet again for the metals. The reports are included below.
Nothing has changed. Not one thing.
Have a pleasant holiday weekend. See you Sunday evening.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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