16 June 2015

Gold / SP 500 Ratio and the Short Term Trading Range In Gold


“And next time we hear someone saying something like, 'We are pursuing this strategy because other strategies, when we had considered them, we concluded that, in terms of overall effectiveness, they were not sound strategies, which is why we enacted the one we are now embarked upon, which our enemies would like to see us fail, because they hate freedom,' we will wait to see if the anchorperson cracks up, or chokes back a sob of disgust, and if he or she does not, we'll feel a bit insane, and therefore less confident, and therefore more passive.”

George Saunders, The Braindead Megaphone


“It’s almost been worth this Depression to find out how little our Big Men knew.”

Will Rogers

When privileged people repeatedly fail at a task, they quite often turn to harshness and even cruelty towards those whom they were purported to be helping, in a revulsion against their failed obligations.

Since they are geniuses, incapable of fault while maintaining their credibility which is founded upon their reputations and personal prestige, the people enduring their many plans themselves must have failed.  And so the people must be made to change, to improve,  and often to be chastised for their shortcomings.

And the financial masters will do this, almost piously, in the name of saving a system which in fact has become an extension of themselves, and which finally serves no one well but them.  

So no real reform can come, and little progress can be made, because the 'managers' are incapable of even admitting to their repeated failures out of self-preservation.   And they will excuse this in the name of preserving 'confidence.'

This is the credibility trap.





Gold Daily and Silver Weekly Charts - FOMC Rate Decision Tomorrow - Credibility Trap


"They took up several obviously wrong people, and they ran their heads very hard against wrong ideas, and persisted in trying to fit the circumstances to the ideas, instead of trying to extract ideas from the circumstances."

Charles Dickens, Great Expectations


"Oh what a tangled web we weave
When first we practice to deceive."

Sir Walter Scott, Marmion


“Reality denied comes back to haunt.”

Philip K. Dick

As you know from the economic calendar there will be the Fed's June Rate Decision tomorrow afternoon.

I doubt very much whether the Fed will actually do anything.

They *might* say something that will bring the 'will they or won't the raise' in September talk back to the forefront. But that is very premature until we see some signs of stabilization in Europe and Asia, and anything resembling a sustainable rebound in the States.

I never ceased to be amazed how little elite economists and the pampered Princes of Wall Street and the Beltway understand the working people of the country, in terms of what they do and how they think.

There should be little doubt that they consider the average person to be an apathetic, hapless fool, and they act accordingly.

And like the last two financial crises, there is not much doubt that they will be surprised once again.

Have a pleasant evening.


 
 
 


SP 500 and NDX Futures Daily Charts - Thermopylae


Stocks bounced a bit today, for largely technical reasons, ahead of the FOMC rate decision tomorrow.

The risks in equities remain pronounced and, in my own estimation, mispriced.
 
The risks of a craven demagogue or a pliant fool in the service of Big Money becoming the next President of the United States have gone exponential.

Have a pleasant evening.