08 September 2020

Stocks and Precious Metals Charts - The Fed Is On the Case

The banks were central to the scheme from the inception as they spent years and many hundreds of millions of dollars to overturn Glass-Steagall to allow this coup de grâce to be delivered to all holders of US dollars.

PBS Frontline: The Long Demise of Glass-Steagall

"The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced. The manners of capitalism improve. The morals may not."

John Kenneth Galbraith

"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission [CFTC] -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"

Brooksley Born, PBS Frontline, The Warning

Stocks took a dive into the open,and despite some hopeful dip-buying, closed off near the lows into the close.

Gold and silver were hit hard but recovered, and unlike stocks managed to hold on.

The dollar rallied, and the VIX rose.

It is hard to tell, but it seems as though stocks have declined all that they will IF this is just a correction.

So some day this week we might expect to see a rally. And that will set up a classically risky September scenario for bubbles that I call 'the rally that fails.'

I include a chart below that shows this for the reference years of 1929 and 1987.  It also worked for 2008.

Have a pleasant evening.