"As it was in the days of Noah, so shall it be with the coming of the Son of man. In the days before the flood, they were eating and drinking, marrying and being given in marriage, even to that very day in which Noah entered into the ark. They did not know what was happening, even as the flood came and swept them all away." Matthew 24:37-39
Gold took a gratuitous little hit on the NY open/London PM fix this morning. It was held down most of the day.
Silver managed to perk up nicely though, regaining the midpoint to the 15 handle. Next month will be more active for silver, and not so for gold.
Lets see if sparky can carry the day.
Not much ever happens at The Bucket Shop these days, so when Goldman takes 44,200 gold ounces for its house account as they did yesterday it is at least worth of note intraday which you can read about here.
I know, it's not that great, but it's something. We're hard up for any real action here, except for the daily dump of paper to knock the prices lower in the AM with a slight recovery into the PM and then higher prices overnight. Rinse and repeat the next day.
Chart formations for the precious metals have not meant much for, oh I don't know, about a year or so now. Its just a steady knockabout lower, tap tap tap.
It may be dissipating. Way to early to say. But let's watch the chance for a rounding bottom here. No charge for looking. And after all, Summer is almost over.
The revision to 2Q GDP came in higher than expected this morning.
Even more importantly, stocks did not fall out of bed overnight, so that gave the Streeters an opportunity to 'walk the dog' back up to less threatening levels after the decline on Monday got out of hand, compliments of the HFT algos.
Both of the futures I follow, the SP 500 and the NDX, have achieved a fifty percent retracement of the big decline. I have marked it on the charts.
Lets see if the dog walkers can keep the pooches in line for the close into the weekend tomorrow.
I know at least two aficionados of this pooch parade, Jan and Stan, who would like to see stocks recover in time for their big rate soiree in September. Cannot have a paper with the dog messing the rugs.
They might well put down some heavy paper, and then go for it. They may not get a better chance this year.
"In Killing the Host, economist Michael Hudson exposes how finance, insurance, and real estate, also known as the FIRE sector, have seized control of the global economy at the expense of industrial capitalism and governments. The FIRE sector is responsible for today’s extreme economic polarization, the 1% vs. the 99%, via favored tax status that inflates real estate prices while deflating the “real” economy of labor and production.
Hudson shows in vivid detail how the Great 2008 Bailout saved the banks but not the economy, and plunged the U.S., Irish, Latvian and Greek economies into debt deflation and austerity. Killing the Host describes how the phenomenon of debt deflation imposes punishing austerity on the U.S. and European economies, siphoning wealth and income upward to the financial sector while impoverishing the middle class."
I have not yet read Michael Hudson's soon to be released book Killing the Host. However we do have some highlights of his thoughts coming out of his existing body of thought which I have followed, and also in this recent interview with Democracy Now which is included below.
I cannot agree completely with Mike Hudson's take on China in this interview. No surprise, since we are two different people with different viewpoints and perspectives. I think we also are from different economic schools of thought. However I see much merit in most of what he is saying.
There was and is still a very dangerous speculative bubble and misallocation of capital that has been going on in China, that is often due to mismanagement, regulatory weakness, a surfeit of easy money, speculative fervor, and flat out corruption. While China is working to correct many of those problems, their outlook is not all sunshine and rainbows.
And I would not say that they were just 'defending themselves' by building up enormous currency reserves that just happened to come there way. I have not gone into this recently, but China took some very aggressive policy moves, including devaluing their currency against the dollar and then controlling it, and spread quite a bit of money in the right circles with regard to trade policy around Washington, to enable a mercantilist system in which they were able to build up their economy to some degree at the expense of the American middle class. Although vast fortunes were also made by some of their all too willing partners in the West as well as their own emerging class of oligarchs.
But putting that aside, the outsized financial sector in the US, which was also enabled by a big money campaign for deregulation in Washington, marked by the overturn of Glass-Steagall, has certainly spawned a significant systemic problem of corruption and malinvestment, inequality reinforced by policy, and an eroding of democracy itself.
Until steps are taken to correct this, there will be no sustainable recovery. People are fed up, and angry, and reaching for solutions some of which appear to be some rather poor choices made in extremis.
And as for the wealthy, dumb, and distracted classes, busily keeping themselves out of any meaningful discussion with the amusing distractions of the triviata of their professions, while occasionally taking a fat stipend for spewing nonsense while nursing a steady share of the vig, the consequences of all this are going to roll over them like a tsunami at midnight.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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