Gold Daily and Silver Weekly Charts - Hidden Dragon, Crouching Dollar

China made its long awaited restatement of its official gold reserves, and it was widely received as a 'lowball number.' China was under some pressure from official central bankdom to update its numbers, the last time being in 2009. And since they are trying to play nice, and have their yuan including in the SDR basket of currencies, they had to say something. I am not sure how to take it except with some serious skepticism.

I include two new charts below that compare the performance of gold against the euro/dollar cross and the inverse of the dollar DX index. Clearly at this point gold is running inversely against the strong dollar and with the weaker euro.

This situation in the markets has 'extreme' and 'fragile' written all over it. I am not quite sure if we are at the 2007 level yet, but we are closer to that than we are to any sustainable economic recovery by a long shot.

The ratio of paper claims to physical gold continues to creep higher at over 97:1 as shown below. Rather than allow the price to rise to make more physical gold available the bullion banks keep selling their paper gold, raising and reraising the stakes to shake out the gold longs ahead of the throw down for August expiration on July 28th and more importantly the active months of August and December. If you were fearless about losses, you might choose to play their brand of poker the same way.

I hesitate to call any of this 'capitulation' because it is becoming such an obviously artificial situation. But I suppose at some point someone or something has to stop this, as the collapse of the Bear Stearns hedge funds led to the demise of Lehman, and the collapse of the paper credit bubble in 2007-8.

I suspect that the paper bubble in precious metals will have quite a bit of company this next time around, especially in a narrow group of grossly overpriced stocks and distressed debt.

Have a pleasant weekend.

 

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - New Era Tech Leads the Way Up Bubble Boulevard

The bubble is here.  Huzzah!

 

Look at the yawning divergence between a narrow group of new era tech companies and the broader market performance.  And forget about the performance of the real economy, which is terrible.  It is a mile wide and one inch deep.  Fragile does not begin to describe it. 

 

Between Fed policy errors and governmental reckless disregard we are seeing a very dangerous bubble having formed right now in a relatively narrow group of US stocks in particular and bonds in general, especially 'distressed debt.'

Every time I think that you can't overestimate the shamelessness of the 'ruling class' in the US I am left open mouthed. They really think that they are above the law and do not seem to care who knows it, because they are winning...

 

There was a big to-do about the housing numbers today, but those numbers were heavily skewed to starts for multi-family dwellings.  The fortunate are setting up their future income streams through rents.

 

People tend to pile hyperbole on hyperbole of dire warnings these days, and I don't want to get in the game of 'top this.'  I think we will see a market dislocation. Oh I see a crash.  Nope you are all wrong we are going to be reduced to small groups of survivors like 'The Walking Dead.'  I mean come on.

But we have now baked another financial crisis into the numbers, and it is just a matter of time before it arrives.

 

I don't know if they can keep muddling through this failure of public stewardship until Barack Obubble and friends can take their retirement and start cashing in, handing off the moneymachine over to the next representative of the oligarchs and perhaps some other crime family or not.  What a bunch of fakes and frauds.

They will never learn, and they will never be able to reform themselves or this rotten system. Someone has to take the car keys away from these serial bubbleholics.

Have a pleasant weekend.

 

 

 

Gold Daily and Silver Weekly Charts - An Extreme In Sentiment Ahead of Key Month

"Such is the rule of our warfare. We advance by yielding; we rise by falling; we conquer by suffering; we persuade by silence; we become rich by bountifulness; we inherit the earth through meekness; we gain comfort through mourning; we earn glory by penitence and prayer. Heaven and earth shall sooner fall than this rule be reversed."

John Henry Newman

Someone passed along some comments found on the web, that Bill Fleckenstein characterized as demonstrating 'an epic extreme in [negative] sentiment' for the precious metals, or something to that effect.

And those of us who watch these things are scratching our heads, because as we see this extreme negativity in sentiment, with the 'open interest' for gold on the Comex rising at the same time to very high levels, ahead of the active month of August. I have included the latest 'claims per ounce' chart below.

Things do make sense. There is a reason why the price of gold and silver are getting pounded against strong buying in paper here, and especially in physical bullion overseas.

But it does take some willingness to look at the facts of the whole matter, rather than failing theories that lead us from bubble to crisis, one after another, or the group think of the thug class.  That is worth shining all the light on it that is possible because frauds and deceptions love darkness and secrecy.

 

There is always the schadenfreude of the internet and those who cannot resist the temptation of a cheap remark to make themselves seem more serious.  Those things are not worth bothering about.

 

I hope that both those who yearn for meaningful financial reform and those who seek an end to the manipulation of precious metal markets have no illusions about how formidable a power is allied against them.  If they wish to see their future if things are allowed to progress as they are, look to Greece.

 

It is a shame that these different reform groups cannot see how much they have in common cause, despite their ideological and political differences.

This is the nature of our warfare.  Nec laudibus, nec timor.

Have a pleasant evening.