SP 500 and NDX Futures Daily Charts - VIX Finally Rises

One of the things that has been puzzling about this decline is the relatively low number on the VIX.

That means that this entire decline has been accompanied by much less 'fear' than one would expect. This is consistent with my prediction that an Obama election win would result in a fairly stiff selloff as profits are taken this year in anticipation of a tax increase for those making over $250,000 per year beginning in January.

Let's see how the VIX goes from here. The selling is very orderly and if it is tax related at some point the selling becomes self defeating, which is when the small speculators will be joining in by design, selling out of fear at the bottom.

IF this is true, and nothing develops in the Middle East for example, I would expect to see prices stabilize and even rally in December.

I do think the fiscal cliff is bollocks. I could be wrong, but I do not think so.

Bart Chilton On Silver Manipulation - Gold and Silver Coiling For a Major Move - The Next Disaster

In discussing the government's lack of reaction in reforming the high frequency trading developments in the market, the CFTC's Bart Chilton remarks in the video below about the unfortunate tendency of regulators not to act until something unfortunate happens as being a:

"...tombstone mentality, when you wait for a disaster before you put something in place."

The CFTC is hampered and opposed at every step of the way by the financial powers and their exchanges, who unfortunately wield a powerful and well-funded lobbying effort that tends to lead the political element in Washington by the nose, or their wallets, as you prefer.

I have come to believe that the US government will do nothing effective to reform the gold and silver markets and the equity exchanges until there is a MAJOR dislocation in the markets, and a virtual 'run on the exchange.'

Change will come after the US financial system is threatened by a major solvency or liquidity event.

Whether it originates from a failure to deliver in gold and silver markets that exposes them as a highly artificial and overleveraged house of cards, or another 'flash crash' that brings down a major exchange or trading house through counter party failures, I now believe that this sort of failure and scandal is what it will take to bring meaningful reform to this highly unstable Anglo-American financial system.

Change will be not voluntary with these greedy, self-destructive jackals, especially after the moral hazard that was introduced by the unfortunate policy error of 'no-strings' bailouts from the last financial crisis.   And the lack of regulation and accountability that has ensued is corrosive.

Reform will be accomplished, but only under the duress of the next financial disaster.  

Gold Daily and Silver Weekly Charts - Eric Sprott on Gold - JPM Backstops NJ Debt Offering

Gold and silver moved sideways today, as stocks remained weak and treasuries gained.

Trading remained quiet. There is an intraday post on the sort of commentary about gold that was 'popular' in 1999.

In the monetization of official debt department, JPM Agrees to Fully Backstop NJ $2.6 Billion Debt Offering. Just in case you were wondering who the 'house bank' is and why they keep it around.

All the Fed and Treasury need are a few cooperative intermediaries in the private sector willing to take the vig, and they can run the money machine day and night through the wonderful price discovery mechanism of market 'auctions.'

I wonder if they will have an open bar and jumbo shrimp at this prix fixe bond event? Maybe a nice ice sculpture of the queen of the silver market?

Have a pleasant evening.