Stocks and Precious Metals Charts - 'Greed Is Good' Creates an Unstable Nation of Con-men

 

"Our basic trouble was not an insufficiency of capital.  It was an insufficient distribution of buying power coupled with an over-sufficient speculation in production.  While wages rose in many of our industries, they did not as a whole rise proportionately to the reward to capital, and at the same time the purchasing power of other great groups of our population was permitted to shrink.

We accumulated such a superabundance of capital that our great bankers were vying with each other, some of them employing questionable methods, in their efforts to lend this capital at home and abroad.  I believe that we are at the threshold of a fundamental change in our popular economic thought, that in the future we are going to think less about the producer and more about the consumer.

Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”

Franklin D. Roosevelt, Campaign Speech, Oglethorpe University, 1932

"The problem [First Bank of the United States] was not paper money per se, but the concentration of power and wealth which the abusive use of the paper monetary power had granted to a few powerful individuals and institutions.   No system is foolproof when a foolish people will allow the unscrupulous few to operate it in secrecy and without transparency, accountability and the rule of law.  And if anything is clear, the crony regulation by the Fed and other regulators of the Banking System, or lack thereof, is a failure and the source of much of our own mischief.  And the primary reason we cannot acknowledge the facts of our own situation is that our political and financial class are caught in a credibility trap.  They cannot speak the truth without compromising their own personal greed and will to power."

Jesse, Peak Junk, Currency Wars, 11 August 2015

"Fraud and falsehood only dread examination. Truth invites it."

Samuel Johnson

"Change is the law of life.  And those who look only to the past or present are certain to miss the future.   A great change is at hand, and our task, our obligation, is to make that revolution, that change, peaceful and constructive for all.  Those who do nothing are inviting shame as well as violence.

The problems of the world cannot possibly be solved by skeptics or cynics whose horizons are limited by the obvious realities.  We need men who can dream of things that never were and ask, why not?  History is a relentless master.  It has no present, only the past rushing into the future.  To try to hold fast is to be swept aside."

John F. Kennedy, Dublin, Ireland, June 28, 1963

Is it any surprise that a generation that was taught and embraced, primarily through its professional class, the belief that 'greed is good' would foster an economy and a nation dominated by self-centered, barely incompetent con-men?

I would suggest that the fruits of this dishonor are yet to be harvested.  What has been hidden will be revealed.

The JOLTS report, a government survey of job openings, came in higher than expected this morning, so of course rate fears flamed on and the markets melted.

Things tended to calm down into the close, stocks finished well in the red.

That gap in the SP 500 futures has certainly been closed.   Unless they are a runaway gap they often do.

The Dollar chopped sideways, with some range at times.

I have included a longer term Dollar chart this evening for perspective.

VIX jumped higher again, well off its notable lows of not too long ago.

Wash-rinse-repeat.

 Gold and silver fell with the JOLTS, but then recovered and made a decent showing into the close.

Non-Farm Payrolls report on Friday.

Gold continues flowing from West to East.

Long ignored, at some point this trend will become more generally known, and its consequences felt.

Our position in all this has been given to us clearly, from many years ago.

"Do not join your efforts with the false and treacherous, for what does justice have to do with lawlessness?  Or what fellowship does light have with darkness?   What is there in common between Christ and Belial?   What do the faithful have in common with the faithless?" 

2 Corinthians 6:14-16

Some history was made today, as for the first time a Speaker of the House has been rebuked, primarily by his own party. 

Interestingly enough this was due to infighting between two MAGA political figures, albeit with slightly different personal styles. 

Such as the ways of the proud, and the self-destructive tendencies of narcissists.   They sow conflict and misery widely, while gaining little or nothing for anyone, including themselves.   

Have a pleasant evening.

Stocks and Precious Metals Charts - Agents of Fortune - Financial Dreadnoughts

 

"The financial system is once again over-leveraged, over-concentrated, fraught with interconnected counterparty risk, and fragile.   This is because of the policy failure of the Treasury and the Fed which could be characterized as extend and pretend, without engaging in significant reforms and law enforcement in the aftermath of what might be best described as a control fraud.

I postulated years ago (2002) that when push came to shove, the Fed would gather around itself a few 'friendly banks' which would act on its behalf in private to enforce certain policy decisions in markets in which the Fed and Treasury do not wish to openly operate.  It is hard to think of any other somewhat moral reason for the government to babysit and subsidize these very expensive and dangerous TBTF monstrosities, except as instruments of policy to provide some degree of freedom to shape events and responses.

If you want to wage a currency war, you need to have some dreadnoughts packing serious financial throw-weight, and economic muscle.  It may be Machiavellian, counter-democratic, and expensive, but that is the diktat of strategy if you want to control things and wield power to do what you will, both at home and abroad.

Is a corollary to the currency war a financial arms race and the construction of institutional behemoths?  I think it might be.   Or it could just be widespread ignorance and corruption amongst the ruling class which certainly is conceivable.  Or some of both.  Why do governments sometimes engage in corporatism?  Take your pick."

Jesse, Financial Dreadnoughts in Times of Currency War,  22 February 2013
 

It was 'risk on' today as bully cast aside his fears and engaged the wash cycle in the markts.

Stocks finished decidedly higher.

VIX dropped sharply back to recent lows.

The Dollar edged higher.

Gold and silver were pressed lower again.

Pretty much the kind of pre-option expiration action we have come to expect.

Have you noticed how economic and financial sanctions and restrictions have become a major component of American policy responses with the Fed and the Banks as key components in controlling markets and impacting trade?

Have a pleasant evening.

Stocks and Precious Metals Charts - A New Phase in the Currency War - Stock Option Expiration Friday

"And, for the same reason that they do not please Him, they succeed in pleasing themselves.  Hence, they become both self-satisfied and self-sufficient – they think they know just what they ought to do, and that they do it all; and in consequence they are very well content with themselves, and rate their merit very high, and have no fear at all of any future scrutiny into their conduct...

For men shall be lovers of their own selves, covetous, boasters, traitors, heady, high-minded having a form of godliness, but denying the power thereof.   Evil men and seducers shall wax worse and worse, deceiving and being deceived."

John Henry Newman


"Since God has accepted you to be among His people that He loves, you must clothe yourselves with tender mercy, kindness, humility, gentleness, and patience.  Make allowances for each other’s faults, and forgive anyone who offends you.  Remember, the Lord forgave you, so you must also forgive others.

Above all, clothe yourselves with love, which brings us all together in harmony.  And let the peace of the Lord rule in your hearts.  For as members of one body you are called to live in peace.  And always be thankful."

Col 3:12-15


'All successful revolutions are the kicking in of a rotten door.'

John Kenneth Galbraith

The Dollar took a dive in the afternoon.

Gold and silver broke up higher with some energy.

There are indeed a couple of ways of marking the current formation on the gold chart.   I have chosen a symmetrical triangle, but one could also make a case for an ascending triangle, or even a bullish flag.

What is more important is that each of these describes an underlying condition of an item that has risen in value, and that is taking a pause to consolidate its price gains before moving higher again.

Gold and silver both seem to be doing this.

Stocks also caught a bid, and the perception of risk fell as measured by the VIX.

So what is going on here?

The central banks of the Western world have declared themselves for low to negative interest rates, which is another form of printing money.

And despite modern theories to the contrary, when governments print money, the wise find forms of refuge for their wealth.

And for now even stocks, and the bubble in financial assets, provides such a refuge.   Only cash is trash.

And the public is being picked clean while being distracted by public circuses and reality show carnival style government.

Well, that certainly is a weighty and expansive manner in which to view things, but it has served well during this period of bubble-nomics.

Let's take this one step at a time.   The manner of any retracements and future short term moves will help to identify the specific nature of this breakout.

It does appear that the years long dampening of the precious metals have been the last great push of the NY-London gold pool, and that a new phase of the currency war has begun.

But it is still the same, crooked system run by insiders for their own benefit, lacking in any meaningful reform.

Repentance, forgiveness, and thankfulness.

Have a pleasant evening.

London Gold Market Imports and Exports - Currency Wars

"Fraud and falsehood only dread examination.  Truth invites it."

Samuel Johnson

Gold is flowing from West to East.

Net central bank purchases of gold in 4Q 2018 were the highest on record.

So few notice—  and even fewer really understand.

Money is power, so do not expect this transition to go smoothly.  Or quietly.  Or honestly.

C'est la guerre des monnaies.

Truly, there is nothing new under the sun.

Shanghai Gold Exchange - A Steady Source of Demand for Physical Gold

"Since 2013 China continues to absorb physical gold from the rest of the world at a staggering pace.  Worth noting is that gold imported into the Chinese domestic market is not allowed to be returned in the foreseeable future. 

Because ownership and the disposition of these volumes of gold likely will be of great importance next time around the international monetary system is under stress, it’s well worth tracking China’s progress of imports – especially because the mainstream media and most consultancy firms are in denial of these events."

Koos Jansen, BullionStar


"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Chief of the Central Bank of Italy, 30 Sept 2013

Related:   The Chinese Gold Market Essentials Guide

The Trend Change In Central Bank Gold Reserves in 2008 That Few Have Noticed And Fewer Acted Upon

This excerpt below is from a blog which I published in 2013.   It is a theme that I have been striking since 2009 specifically.

The turn in central bank gold buying came in 2008, although the bullish case for gold for other reasons became pretty obvious in 2002.

The bottom in the gold price was marked when England sold its remaining physical gold, in the notorious 'Brown's Bottom.'

By 2009 the data made it completely clear that the world's central banks had turned from net sellers of gold bullion in order to control its price and had become net purchasers of physical gold for their own reserves. 

Demand has been led by 'the New Silk Road.'

I suspect this change was a reaction to the currency crisis in the emerging markets in the 1990s.   It was referred to as 'the Currency Wars' popularized in China and given little coverage here.

And of course there was the failure of the Washington Agreement, struck in 1999 to manage the gold price through planned central bank sales in order to support what some called Bretton Woods II and the exorbitant advantage of the perodollar.

Hardly anyone outside of a small community of analysts had noticed, and even fewer understood what it meant.

I include the older charts, and a recent tweet by analyst Luke Gromen that shows where the central banks are in their purchasing today.

Hint, they are still buying gold, physical gold, and in steady to increasing amounts such that the 'free float' of available physical gold for delivery is strikingly low compared to demand.

I suspect that silver will have a role to play, judging by the enormous silver hoard that JP Morgan has established, for customers unknown.

Nothing to see here. Just a bunch of conspiracy theories.  And dirty little secrets that we prefer to keep hidden.  Move along.

"Few people realize that around 2008 central banks turned from being net sellers of gold to net buyers, and began to accumulate gold reserves in a big way for the first time since the 1970's, when Nixon slammed shut the gold window.

This is based on what they report officially to the IMF. There is strong anecdotal evidence that the actual turn in buying occurred quite a few years earlier, and more in line with the rapid appreciation in price as selling declined.

First the selling slowed and the stealth buying began, particularly in Asia and the Mideast.

There was a sea change in the gold market as central banks scaled back on their strategy of supplying official gold to the bullion banks in order to keep the price down.

The bottom in the gold price occurred when Gordon Brown threw England's gold with a pre-announcement into the market in order to bail out any bullion banks that were caught flatfooted 'in the turn' in May of 1999. This was the first clear sign that change was in the wind.

The Big Turn occurred in 2007 when the western central banks capitulated, and realized that they must allow the price of gold to rise, or exhaust their own gold reserves in the process. The central bank change did not cause this, although it certainly reinforces the trend. It is a symptom of the great change and the first unmistakable manifestation of the currency war. Although astute observers could see this coming in the aftermath of the Asian currency crisis in the 1990's and the Russian default on the rouble.

Gold commentators who do not realize this significant dimension of what has occurred and account for it in their thinking have been simply left behind, lost in an outdated frame of reference. They do not see the forest for the trees."

"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Chief of the Central Bank of Italy, 30 Sept 2013