Gold Daily and Silver Weekly Charts - Big Deliveries at Big Price Resistance

"What is at stake is a rather heroic rebellion by a very beleaguered people against a doctrine which has been destroying their lives— the austerity doctrine and the whole neoliberal project."

James K. Galbraith

Although Jamie was speaking about Greece, this can be applied across the developed nations.

There was another big delivery day for NY gold yesterday, at least by Comex historical measures, as HSBC led the delivery of over 100,000 ounces of gold at 1,249, with the house account and mystery customer at JPM as the big stoppers.

Silver is not so active this month, due to the nature of its June contract, but bullion keeps trickling out of the warehouses. Denver Dave has suggested that this might be an arbitrage play between NY and Asia.

Gold is banging its head against the big resistance at 1,270.  If it takes out that level then the next battleground will be for the breakout around 1300.

As a reminder there will be a highly watched FOMC meeting next Tuesday and Wednesday.

President Obama endorsed Her Royal Hillary Clinton today.  What a surprise.  Her campaign slogan could be 'more of the same, but with a corporate servility even more brazen and tawdry.'

I am not sure which of the two candidates is more fraught with risk. As you may have gathered I do not care for either of them. Well, that is just me perhaps.

I am expecting it to be a rough four years no matter which of these two chuckleheads are elected.  The 'establishment' is not going to give up its good thing easily, and we seem to be nearing a 'break point.' As John K. Galbraith put it so well:

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason. But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right."

John Kenneth Galbraith

Let's see what happens.  Whatever may come, it may be a good idea to hang on tightly to one's integrity, as well as their wallet.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Buoyant On Light Volume

What is making the Fed's interest rate waffling is not the impact of 25 or 50 or even 100 basis points on the real economy.

Rather, the impact is coming from the highly leveraged risk assets like bonds and stocks.  A little movement by the Fed is swinging a big stick in the speculatively mispriced markets, creating quite a bit more tail risk than most would be assuming.

Let's see how this all works out.

Have a pleasant evening.

Some Charts at 9 AM EDT - Disordered Economic Thinking

"For in that universal call,
Few bankers will to Heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'

When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weigh'd in the balance, and found light!'

Jonathan Swift, The Run Upon the Bankers

Gold and silver have come back sharply to the levels that they had occupied before the smackdown related to options expiration and perception modifying in preparation for the Jobs Report.

I suspect that the Fed will try to squeeze in at least one rate increase before the Presidential elections.  I don't think they can do 50 bp but a 25 bp increase might be feasible with the right wording.

June seems a bit of a stretch, but it does leave the door open for another increase should they find a favorable set of data to smooth their way.

In a very real sense the slight movement of interest rates do not matter all that much at this point to the real economy.  They are a blunt instrument, more symbolic than effective.  But they are almost hypersensitive to unbalanced financial markets made tipsy by excess.

Most of the cheap money is flowing into speculative activities of the same jokers who overturned the financial markets and tanked the real economy in the first place.  And despite their denials, the Fed has their hand on the tiller of regulatory persuasion and power that could change that if it had the will to do it.  But as career minded timeservers, they do not.  They follow power, and the power is in the hands of Big Money and the Banks.

This is the price of a failure to reform.  This is the outcome when one tries to serve two masters.  This is the last stand of a failed ideology and a broken system foundering in the face of hard reality.

This is not policy, it is the hypocritical nicety that excuses mere looting by the powerful in the aftermath of a crisis.

Negative interest rates are the product of disordered economic thinking.  They are the result of an inability to confront the real, more serious problems in the banking system.  And so like so many compromises they are producing unintended effects that are actually counter-productive.

And this is why gold and silver are so attractive as a safe haven refuge, and why disordered minds despise them.