Gold Daily and Silver Weekly Charts

"The voice of protest, of warning, of appeal is never more needed than when the clamor of fife and drum, echoed by the press and too often by the pulpit, is bidding all men fall in and keep step and obey in silence the tyrannous word of command. Then, more than ever, it is the duty of the good citizen not to be silent."

Charles Eliot Norton

In my opinion the bulk of the market action is being driven by tax selling, the taking of profits this year before the expected tax changes which will occur next year either with 'the fiscal cliff' or 'the grand bargain.'

The negotiations around this 'fiscal cliff' are fascinating. I am still wondering how Obama managed to box the Republicans in so thoroughly. Was the GOP just that confident of a big win in the election, or is Boehner playing hardball with the Tea Party wing of the House? One can only wonder.

Gold and silver continue to coil for a move.

Genuine reform remains a distant goal.

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.