SP 500 and NDX Futures Daily Price - Audit or End the Fed

"Politics is the loom that weaves and spins the fabric of our democratic social cohesion. The politics of democracy is the social blanket that we all willingly come together under, huddled awkwardly, for our national identity. The interwoven threads of multi-media, technology, financial, and shared social myths bind this political blanket into our national identity as a democratic republic.

When the democratic political process has been stealthy co-opted over many years by financialization, which seamlessly connects the financial industry and the government, we become members of a fascist form of state (inverted totalitarianism), without collectively knowing it yet."

Joe, the Angry Hawaiian

The financial system in its existing form is excessively arbitrary and non-transparent.

An external standard provides a flywheel, which prevents the expansion of the money supply at the discretion of a central authority that also has the power to monetize debt and set interest rates, within some longer term limitations.

In its worst form, short of an overt tyranny, the central banking power has the ability to create money at will, and distribute as they see fit, to their cronies, for whom they are also a powerful friend and regulator governed by a self-defined class that moves freely between government and the financial industry.

This is the precise reason why President Andrew Jackson vetoed the Second Bank of the United States.  The Banks speculated in the goods of the nation, keeping the profits, but using the power of their Central Bank to shift the losses to the public.

And this is the story of the serial bubbles we have been seeing since the 1990s.

Would it be 'better' to merely shift the power to create money at will from the Fed to the Treasury, and eliminate the issuance of debt?  Hardly.  There are other ways to accomplish this that do not count upon men being as selfless and wise as angels, which may exist as a theory, but has proven to be a terrible folly in all real world situations in which it has been tried.

Have a pleasant evening.

 

Gold Daily and Silver Weekly Charts - Short Squeeze

"Oh what a tangled web we weave,

When first we practise to deceive!"

Walter Scott, Marmion, Canto vi, Stanza 17

Watching the trade in gold and silver last night was interesting.

Around midnight gold was smacked down seven dollars to about $1132 in the matter of a few seconds. That is customary since traders have to reset their stops after midnight, and there was a bit of the usual inexplicable 'gamesmanship' one sees in bucket shops, rigged card games, and for some reason the Comex.

But about an hour later the price rebounded back up sharply to the 1144 area and seemed to stick there for most of the trade, with a slight upward bias, until the US announced its Non-Farm Payrolls Report for October, which sucked out loud.

There is no recovery. And as that fantasy wavered, so did the dollar and both gold and silver traded higher throughout the day, as the spec who came for the usual NFP Day smackdown ate their shorts.

So what next. Gold and silver are still in bear markets. This is counterintuitive of course since in the case of gold especially there is a yawning mismatch between actually supply and real demand.

I took a look at the Sprott Physical Gold Trust and there it was, another redemption. I have not yet looked but I suspect we will see more sizable redemptions from the ETFs.

I have offerend some intraday commentary that may shed some light on this phenomenon. I encourage you to read it here.

That there is manipulation in the gold market is, in my mind and in accordance with the evidence at hand, strictly a rhetorical question now, argued by the bully boys and shills of the Banks, and those pit crawlers of the financial demimonde.

That is not to say that 'it is over.'   These things never end when you think they will end, but when the end comes, it tends to come with a vengeance.  So I don't think we will even have to ask the question when the answer is there. 

A good start would be for gold and silver to break these awful, grinding short sales and bear raids lower, and that means breaking the pattern of lower highs and lower lows.  That means taking out $1270 gold and sticking it to the bears, hard.

For now this is a big bounce off a grossly oversold condition.  So it is too soon to break out the balloons.  Even if you are a legend of the legendary legends.  Mere mortals must wait for a more solid confirmation of a sustained change in trend.  The powers that be never give up any shred of power easily, and that is what we are seeing: a shifting landscape of historic proportions. 

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Non-Farm Payroll Flop - FrankenFed

There was intraday commentary on the Non-Farm Payrolls report.

It was fine, if you want less jobs than expected at lower wages that can sustain anything like a recovery.

Things are not going smoothly for those required to live in the real world.

At some point, the pampered princes will have to notice that all is not well, and that the natives are growing restless. 

 

I think what we saw in the midterm elections is some disenchantment with the happy talk, and blowback on the party in power. 

 

The bloom is going to wear off the elephantine rose fairly quickly if the houses of Congress cannot do something a little more imaginative than trickle down, trickle down.

Do you think the powers that be are completely unaware?  Perhaps not.

 

It was common for people in old Russia to say, 'if only Comrade Stalin knew what was going on.'

George Carlin had a rather salty and somewhat pessimistic explanation for the lack of reform and recovery.   Caution language.

Perhaps the one percent and their burgermeisters will have a change of heart-- before the sight of villagers with pitchforks and torches comes cresting over the hill.   It might end up looking like the fall of Saigon.  Oh the bureaucracy!

Have a pleasant evening.