21 February 2020

Stocks and Precious Metals Charts - Gold Breaks Out - Freedom From Darkness and Despair

"There seems little question that in 1929, modifying a famous cliche, the economy was fundamentally unsound.  This is a circumstance of first-rate importance.  In 1929 the rich were indubitably rich.  The figures are not entirely satisfactory, but it seems certain that the five per cent of the population with the highest incomes in that year received approximately one-third of all income.

The proportion of personal income received in the form of interest, dividends, and rent – the income, broadly speaking, of the well-to-do – was about twice as great as in the years following the Second World War.

This highly unequal income distribution meant that the economy was dependent on a high level of investment or a high level of luxury consumer spending or both.  The rich cannot buy great quantities of bread.  This high bracket spending and investment was especially susceptible, one may assume, to the crushing news from the stock market in October 1929."

John Kenneth Galbraith, The Great Crash of 1929

"Time is a flat circle.  Everything we have done or will do we will do over and over and over again— forever.  This place is like somebody's memory of a town, and the memory is fading.  It's like there was never anything here but jungle. "

Rust Cohle, True Detective

"It begins with a highly complex financial system, whose very complexity makes it difficult for anyone to know what might be going wrong; by definition, the multiple parts of the financial system are linked, which means that trouble in one institution, city, or region can travel easily and quickly to others.

Buoyant growth in the economy makes the financials system more fragile, in part due to the demand for capital and in part due to the tendency of some institutions to take on more risk than is prudent.  Leaders in government and the financials sector implement policies that advertently or inadvertently increase the exposure to risk of crisis.

An economic shock hits the financials system. The mood of the market swings from optimism to pessimism, create a self-reinforcing downward spiral."

Robert Bruner and Sean Carr, The Panic of 1907

"For this is God's love for us, that we keep His commandments.   They do not repress us, for everyone who has been reborn in God can overcome the world.   And this is the victorious power that conquers the world— our faithfulness.

1 John 5:3-4

“If you are faithful to my words, you will be my disciples.  And you will know the truth, and the truth will set you free.”

John 8:31-32

Some weaker than expected economic news, and the reality of the coronavirus, helped to despress stock prices today.

Especially since the option expiration was today, and the wiseguys had already done half the job by jacking the markets up earlier this week.

Gold has broken out of its 'W' or double bottom formation.

We may see some retracement back to test former resistance, but for now it looks like a trip uptown for the yellow dog.

And silver is going along for the ride.

I have to run to the airport so that's all for now.

Have a great weekend.