Stocks and Precious Metals Charts - Elevated Economic Hazards - Comex Option Expiry Thursday

"No amount of observations of white swans can allow the inference that all swans are white, but the observation of a single black swan is sufficient to refute that conclusion."

David Hume


“It has been more profitable for us to bind together in the wrong direction than to be alone in the right one. Those who have followed the assertive idiot rather than the introspective wise person have passed us some of their genes.  This is apparent from a social pathology:  psychopaths rally followers.”

Nassim Nicholas Taleb, The Black Swan


"Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." -

News dispatch from Washington, January 21, 1930


“The narcissist devours people, consumes their output, and casts the empty, writhing shells aside.”

Sam Vaknin

Stocks were soaring higher as Alphabet, the stock formerly known as Google, put in some good results, sending the FANGs soaring.

But tech faded and turned around, just managing to finish unchanged.

There will be a Comex gold option expiration on Thursday the 26^th.

We are in the thick of earnings season now, and individual result are sending some stocks soaring or plunging.

The IMF estimates that the US Dollar is overvalued from 8 to 16 percent.

I think gold expressed in dollars is undervalued by from 60 to 100 percent.

Let's how all the reversions to the mean go.

There was intraday commentary regarding the dangers of the derivatives markets to the Too-Big-To-Fail boys here.

It's probably early days, but now might be the time to start taking precautions against a 2008 class event in the financial markets. I would suggest it might arrive anytime between now and July 2020.

These sorts of things depend on the magnitude of any 'trigger event,' which is why it is so difficult to forecast with regard to specific dates.

As time goes on the required force for a market moving event decreases until it takes very little to set that ball in motion.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Monetary Rapture: The Incredible Disappearing Gold Inventories - Ocean Receding

“I am persuaded that big changes are coming to long standing global currency arrangements.“

Jesse

Gold is flowing from weaker hands to stronger hands, from speculators to central banks and wealthy investors, the multitudes in China and India, and in general from West to East.

Nick Laird of Sharelynx.com does some incredible work tracking and charting almost every aspect of the gold and silver markets. His site is well worth visiting.

I have included some comments from Nick below that touch on some factors that had not yet occurred to me.

Total Ounces In Warehouse Including Both Registered and Eligible

Here is the summation of quite a few repositories/Trusts/ETFs/Funds that list their inventory levels.  

Here is a comment on this from Nick:

Since Dec 31st
Gold holdings have fallen 17.5 %

Yet;
Silver holdings have risen 2.7%
Platinum holdings have risen 0.1%
Palladium holdings have risen 8.2%

I believe that there's a transfer of gold holdings from the publicly visible sector to the private sector where the numbers cannot be followed. Gold holders are taking possession of physical by removing physical from public places, eg. Comex, and selling them from visible accounts, eg. ETFs.

I do believe that there is a lot more to this than meets the eye and that we're seeing the initial transition stages that in a year or two's time we will look back & say 'Aha!' Gold is flowing not just from West to East but also from public to private places, and this I think is solely related to Cyprus and the future implications of a financial meltdown.

I think we're on the verge of the music stopping and a rush to safety.

All we need do is sit back and watch what happens to these public stocks when gold starts rising again. My bet would be that public stocks will continue to dwindle as more people feel unsafe about where their gold is held."

I tend to agree.  I also think that a fear of the 'rehypothecation' of gold, especially in light of the seizure of assets held even with allocated receipts in the failure of MF Global, is driving people to take more care about where they keep their wealth.

As Nick points out, the biggest drawdowns are in gold itself. Ted Butler has recently speculated that some of the bullion banks may be taking inventory on the cheap as GLD disgorges inventory. So something is happening with gold that is not happening in the same way with the other precious metals.

And I am sure that by now you know that I am persuaded that big changes are coming to long standing global currency arrangements.

My first take was that on the whole this remarkable inventory drawdown in public repositories in the West resembles the receding of the ocean after an earthquake. I don't think the bankers realize the signals that they sent to the markets with the manner in which they handled Cyprus. And MF Global and the entire financial crisis for that matter. These things take time to build, and then it seems that suddenly people begin to act.

We will have to wait and see what comes next, and, as Nick points out, what the inventory levels do when the price of gold starts rising again.

CBC: Canada To Adopt the Cyprus Model of Depositor 'Bail-In' In Case of Bank Failure

The smugness of the Canadian politicians is reminiscent of the Bank of New Zealand. 

Perhaps that is what the political do when they are making plans for a gathering storm and they wish for everyone to remain on the beach in the meanwhile.

I could be wrong, but in my judgement nothing in the global banking system is safe if the massive derivative bubble collapses. 

It will not only take down the private banks, but quite a few sovereign countries as well.

I am of the opinion that in the States there will not be the same sort of 'bail in' but a 'print in' in which the Fed will supply as much money as is required, taking value from all who hold Dollars including foreign holders.  So in that sense, the US is 'safe.'  It is all the holders of dollars around the world who are not.

You may wish to take some protective measures if you have not done so already.   When the times comes, there will be no time.

Ottawa weighing plans for bank failures
By Neil MacDonald
April 3, 2013

Buried deep in last month's federal budget is an ambiguously worded section that has roiled parts of the financial world but has so far been largely ignored by the mainstream media.

It boils down to this: Ottawa is contemplating the possibility of a Canadian bank failure — and the same sort of pitiless prescription that was just imposed in Cyprus.

Meaning no bailout by taxpayers, but rather a "bail-in" that would force the bank's creditors to absorb the staggering losses that such an event would inevitably entail.

If that sounds sobering, it should. While officials in Ottawa are playing down the possibility of a raid on the bank accounts of ordinary Canadians, they chose not to include that guarantee in the budget language.

Canadians tend to believe their banks are safer and more backstopped than elsewhere in the world. The federal government enthusiastically promotes the notion, and loves to take credit for it.

It may well be true, even if Canada's six-bank oligopoly isn't terribly competitive, at least in comparison to the far more diverse American banking universe.

But in the ever-more insecure world that has unfolded since the financial meltdown of 2008, it is also increasingly clear that nothing is safe anymore, not even blue-chip bank stocks and bonds or even, in the case of the Cyprus bail-in, private bank accounts.

And now, Canada is making a bail-in official government policy, too...

Read the rest here.

7.6 Magnitude Earthquake In Costa Rica Triggers Pacific Basin Tsunami Warning

The initial tsunami watch for the Caribbean has been cancelled. The earthquake occurred 12 miles under the ocean on the Pacific side of Costa Rica.

Although the initial estimates of 7.9 magnitude were revised to 7.6, the warnings and watch for several countries in the Pacific rim are still in effect.

As always, listen to your official tsunami channels for updates and recommended actions.

NOSARA, Costa Rica (AP) — A powerful, magnitude-7.6 earthquake shook Costa Rica and a wide swath of Central America on Wednesday, collapsing some houses, blocking highways and causing panic, but there were no immediate reports of deaths.

The USGS said the 8:42 a.m. quake struck about 38 miles (60 kilometers) from the town of Liberia. It was centered about 25 miles (41 kilometers) below the surface. The magnitude initially was estimated at 7.9.

In the town of Hojancha near the epicenter, city official Kenia Campos said the quake knocked down some houses and landslides blocked two roads.

"So far, we don't have victims," she said. "People were really scared ... We have had moderate quakes but an earthquake (this strong) hadn't happened in more than 50 years."

There were no initial reports of damage or deaths in the capital of San Jose, said Douglas Salgado, a geographer with Costa Rica's National Commission of Risk Prevention and Emergency Attention.

Salgado said, however, officials were having problem accessing the earthquake zone or reaching people there and were flying over the area to assess damage to highways and other structures.

The earthquake didn't knock out phones or electricity in the capital 88 miles (141 kilometers) from the epicenter, Salgado said by telephone, but communications were down near the epicenter.

"There's chaos in San Jose because it was a strong earthquake of long duration," Salgado said. "It was pretty strong and caused collective chaos."

TSUNAMI BULLETIN NUMBER 002
PACIFIC TSUNAMI WARNING CENTER/NOAA/NWS
ISSUED AT 1525Z 05 SEP 2012

THIS BULLETIN APPLIES TO AREAS WITHIN AND BORDERING THE PACIFIC OCEAN AND ADJACENT SEAS...EXCEPT ALASKA...BRITISH COLUMBIA...WASHINGTON...OREGON AND CALIFORNIA.

THE EARTHQUAKE MAGNITUDE IS REDUCED TO 7.6 THE WARNING AREA IS REDUCED...THE WARNING IS CANCELLED FOR EL SALVADOR...HONDURAS...MEXICO...COLOMBIA...ECUADOR...
GUATEMALA AND PERU.

... A TSUNAMI WARNING IS IN EFFECT ...

A TSUNAMI WARNING IS IN EFFECT FOR

COSTA RICA / PANAMA / NICARAGUA

FOR ALL OTHER AREAS COVERED BY THIS BULLETIN... IT IS FOR INFORMATION ONLY AT THIS TIME.

THIS BULLETIN IS ISSUED AS ADVICE TO GOVERNMENT AGENCIES. ONLY NATIONAL AND LOCAL GOVERNMENT AGENCIES HAVE THE AUTHORITY TO MAKE DECISIONS REGARDING THE OFFICIAL STATE OF ALERT IN THEIR AREA AND ANY ACTIONS TO BE TAKEN IN RESPONSE.

AN EARTHQUAKE HAS OCCURRED WITH THESE PRELIMINARY PARAMETERS

ORIGIN TIME - 1442Z 05 SEP 2012
COORDINATES - 9.9 NORTH 85.5 WEST
DEPTH - 46 KM
LOCATION - OFF COAST OF COSTA RICA
MAGNITUDE - 7.6

Source: tsunami.gov