Stocks and Precious Metals Charts - Malice Domestic and Endless Foreign Wars

“Several centuries ago the greatest writer in history described the two most menacing clouds that hang over human government and human society as 'malice domestic and fierce foreign war.'  We are not rid of these dangers, but we can summon our intelligence to meet them.

Never was there more genuine reason for Americans to face down these two causes of fear.  'Malice domestic' from time to time will come to you in the shape of those who would raise false issues, pervert facts, preach the gospel of hate, and minimize the importance of public action to secure human rights or spiritual ideals.

There are those today who would sow these seeds, but your answer to them is in the possession of the plain facts of our present condition.”

Franklin D. Roosevelt, Address at the San Diego Exposition, October 2, 1935

The financial asset bubbles since the turn of the 21st century have been enabled by four basic instruments of monetary policy error: Greenspan, Bernanke, Yellen, and Powell.

Whether we will have a third major collapse and crash to follow this latest asset bubble, as a consequence of misguided monetary policy, economic priorities, and bank regulation is not the issue. The question is, shall we have a system that holds together long enough to have a fourth?

Certainly the Fed is not alone in this.  But in addition to their power to set short term interest rate targets and engage in open market operations, they are also a singularly powerful banking regulator, wield through this office tremendous power in all the financial asset markets, right down to reserve and margin requirements, and the activities in them of the Banks.

Stocks rebounded somewhat today. Whether this bounce will stick, and increase to allow yet another top in equities is certainly an open question.

It seems probable that the Fed will keep raising their benchmark rate as long as the fig leaf of recovery permits, as they recoil in horror from ZIRP.  For they maintain as their highest priority the process itself, and the banking system to which they are beholden.

This is the great challenge of our day.  The system has been co=opted by and for the benefit of the few, and the people as a whole are suffering for it.

Gold and silver bounced a little today, as the Dollar shows continued weakness.

Tomorrow we will have the decision of the FOMC.

On Friday we shall be treated to the Non-Farm Payrolls Report.

As an aside, does anyone else know who FDR is describing as 'the greatest writer in history' in the quote above, the person who wrote several centuries ago about 'malice domestic and fierce foreign wars?' I have not been able to find out, and seem to be the only person who uses this quote who even wonders. Let me know if you can discover this person's identity.

Answer: Thanks to astute readership, the author is Shakespeare as one might expect, from Macbeth, Act III, Scene 2.

"...better be with the dead,
Whom we, to gain our peace, have sent to peace,
Than on the torture of the mind to lie
In restless ecstasy. Duncan is in his grave;
After life's fitful fever he sleeps well;
Treason has done his worst: nor steel, nor poison,
Malice domestic, foreign levy, nothing,
Can touch him further."

And even further, as the definitive answer, we have the admission of an advisor to FDR, Raymond Moley, that the phrase was a conflation that he created in error.  As recounted in his book Seven Years:

This reference sent the literati to their Shakespeares, and elicited no small amount of good-natured chaffing. It was, I regret to say, a garbled one, and 1 was responsible for the garbling. Somehow or other, the phrase "Malice domestic, foreign levy"-levy meaning armed force-from Act 3, Scene 2 of Macbeth got mixed up in my mind with the phrase, "Domestic fury and fierce civil strife," from Act III, Scene 1 of Julius Caesar..

Need little, want less, love more.   For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Stocks and Precious Metals Charts - Economic Theology - Data Heavy, Knowledge Weak

“To love. To be loved. To never forget your own insignificance. To never get used to the unspeakable violence and the vulgar disparity of life around you. To seek joy in the saddest places. To pursue beauty to its lair. To never simplify what is complicated or complicate what is simple. To respect strength, never power.

Above all, to watch. To try and understand. To never look away. And never, never to forget.”

Arundhati Roy

Stocks continued to show weakness today, led lower by the big sled dogs in the Trumpolini Rally, which is big cap tech.

Gold and silver finished largely unchanged despite a weaker dollar.

We will be getting quite a bit of economic data this week in addition to earnings reports.

FOMC on Wednesday, and Non-Farm Payrolls on Friday.

Trumpolini wants to give an extra $100 Billion to the wealthy by unilaterally changing the capital gains tax without involving Congress.  What a swell guy.  Always thinking about the other guy.

The billionaire class could use a little extra walking around money.  And we can always cut meals to the infirm, elderly, and school kids to pay for it.  It's a win-win.  Enriching the pigmen and culling the herd.

We will be getting rain almost every day this week, and so I spent the morning in the pleasantly less humid prelude finishing up some yardwork and outdoors chores.

Dolly maintained her vigilant watch, and made sure no one bothered the reclining chair while I was otherwise engaged outside.   It is what she does best.

There was commentary today titled Economic Theology.

Need little, want less, love more.  For those who abide in love abide in God, and God in them.

Have a pleasant evening.

Economic Theology - Obama and the Rise of the New International Elite

"Do we need weapons to fight wars?  Or do we need wars to create markets for weapons? ...In the privatization of everything, these companies have made the Indian economy one of the fastest growing in the world.   There’s only one problem – they exploit everything and everyone in its wake.  It’s a dream come true for businessmen – to be able to sell what they don’t have to buy.”

Arundhati Roy, The Ghost of Capitalism

Thurman Arnold wrote in The Folklore of Capitalism that  'Economic theology is the opiate of the middle class...Law, morals, and economics are always arrayed against new groups which are struggling to secure a place in an institutional hierarchy of prestige."

Arnold goes on to say in an essay in reply to a review of his book that "Philosophies, legal, ethical, and economic appear very different from the outside looking in than from the inside looking out. The inside point of view assumes that if reasoning men get their heads together, they can make the concept of a good life a workable tool.  From the outside it is obvious that reasoning men never agree. Their conflicts only create more literature."

What Arnold is going after is the very notion of the meritocracy, and the mythology of philosopher-kings. In the abstract reality is not captured, and therfore cannot be made workable.  There is no such thing as a perfect system, one that will solve all problems if you can only tweak it here and there.

A workable system requires practical and talented people, not necessarily the most credentialed and pedigreed, that are working with a genuine dedication  and focus to a set of first principles and priorities. 

It is a project doomed to failure to allow process to stand over priority,  the realization of the perfectly designed system for its own sake, because such a system does not exist, and is almost always a canard to promote some powerful interests for their own sake.

He means ideologically based systems like 'supply side economics.'.  It may have failed, miserably and spectacularly at every turn, but it still sounds pretty good on paper.  And so here we go again.

Or globalization, free markets and free trade—  these are all good examples of a misbegotten first principles,  tenets of economic theology that form the foundation of a system designed for process, rather than results.

If you wish to understand Obama, Clinton and the modern Democratic and Republican parties, which are both parties representing different segments of the affluent and the powerful,  I urge you to spend the time to watch the latter half of the second video.  The Democrats may speak the cause of the dispossessed and the weak, but tend to treat and view them not as constituents but as charges, with the kind of condescension and utility of neo-colonialism and 'the meritocracy's burden.'

Obama is every bit the narcissist as is Trump.  The difference is that Obama is more articulate in his expressions of it, in his appeals to those things that will provide him more of what he thinks that he deserves.

It is an analysis of our current situation by Thomas Frank. You may have seen it before, but I urge you to watch it through in light of everything that has occurred. Watch the entire video with the Q&A if you have the time.   There are some practical solutions discussed therein.  Basically the system is going to be changed from the bottom up, or not at all.