Stocks and Precious Metals Charts - The Fruits of Graft - Costco Selling One Ounce Gold Bars

 

“Trickle-down theory represents the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

John Kenneth Galbraith

"You should thank God the government saved the big banks and their investors. Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies. Suck it in and cope."

Charlie Munger, Christian Science Monitor, September 30, 2010

"Inequality is a euphemism for all the things that have gone to make the lives of the rich so much more delicious for the last three decades. And for the things that have made the lives of working people so wretched and so precarious.  You catch a glimpse of inequality every time you hear about someone that had to declare bankruptcy because a child got sick.  Inequality is about the way in which speculators, and even criminals, get a helping hand from Uncle Sam, while the Vietnam Vet down the street loses his house."

Thomas Frank, Listen Liberal

“Sin is not a distance, it is a turning of our gaze in the wrong direction.  Evil when we are in its power is not felt as evil, but as a necessity, or even a duty."

Simone Weil

Today we had the expected 'gut punch' follow up to the recent precious metals option expiration on the Comex.

I would normally expect this to be about it, but since we are approaching the end of the third quarter we will have to wait and see if the big metal and miner shorts have used this opportunity to square up their books for quarter end.

The Dollar rallied and took the 106 handle and then some.

Stocks were punched down hard, but managed to rally into the close and finish unchanged to green.

What a surprise.

The government shutdown looms as the House continues in disarray.

But this reaction in the equity markets so far is mostly the usual end of quarter shenanigans.

And as a surprise in the news, national retailer Costco is now selling one ounce gold bars.   And they are selling out as fast as they can stock them.    Physical gold to go and a free lunch of tasty samples.   What will they think of next. 

There may be a flight to safety of sorts in the air.  Let's see what happens. 

As Cicero is said to have famously observed in his first oration against Cataline, 'O tempora, O mores.'

When he spoke in 63 BC his republic was failing as well.

Have a pleasant evening.

Stocks and Precious Metals Charts - The Foolish and the Shameless - Comex Option Expiration

 

"The most urgent problem facing the US and the Western nations is not a [debt limit] 'fiscal cliff.'  It is the pernicious corruption in the financial system that has captured the politicians of both parties, and distorted the public conversation through influence in the media and directing the opinions and buying the research of 'experts' through the power of big money."

Jesse, New Twists In MF Global Scandal, 21 November 2012

"The [gold] exchange is a fractional reserve exchange, and they think that price will solve everything."

Kyle Bass

"If JP Morgan leases gold from the US Treasury it does not mean that they back up a truck in Fort Knox and drive the gold away.  There is no need for that.  It is just a paper transaction.  The gold can sit in Fort Knox. JP Morgan can take a hypothecatable title. Now once JP Morgan has the gold what they do is they sell it at times 100 to gold investors [100:1 leverage] who think they have gold but what they really have is what is called unallocated gold.

Unallocated gold is a euphemism for no gold.  If I call up JP Morgan and I say, 'You know I wanna buy a million dollars worth of gold,' they will say, 'Fine.  Here is our contract.  Send us the million dollars.'  I sign the contract.  I send the million dollars.  They send me a confirmation and it says I own a million dollars worth of gold subject to the contract.

Well, read the fine print in the contract.  What it says is your gold is unallocated which means that they do not claim to have any specific bar with a serial number or your name on it.  In reality they have taken the same bar of gold and sold it to a hundred different investors.

Now that is fine if we are happy with the paper contract, but if all 100 of us show up at JP Morgan and they have only got one bar of gold, the first person may get the gold.  The other 99 people, they are going get their contracts terminated.  They are going to get a check for the value of gold at the close of business yesterday, but they are not going to get today's price movement or tomorrow's price movement when super spiking going up to $2,000, $3,000, $4,000 an ounce.  That is when you want your gold for the price protection when everything else is falling apart.  That is when you are going to discover that you do not have gold."

Jim Rickards, The New Case for Gold, Seeking Alpha, April 3, 2016


Seems like we had another precious metals option expiration on the Comex. 

I was warning that this was the quarterly expiration for an active contract month, and the wiseguys in their shamelessness certainly did not disappoint.

Gold and silver were sold hard, going out near the lows of the day.

The Dollar was marginally higher.   This was not a dollar cross trade. 

VIX rose sharply.

Stocks were sold, driven by the usual bipolar interest rate wash and rinse memes.

There are also concerns that the self-centered brats in the Congressional Freedom Caucus,enabled by the clueless and spineless are going to keep acting out until they finally break something important.

The lesser of two evils is still evil.   And nothing will improve until we demand something better.

The low in the VIX and the nonsensical utterances of the spokesmodels and the Wall Street pigmen auxiliary last week seemed to indicate a major wash and rinse was in the works.   The rationales for a further rally in the equity markets and a stealth economic recovery were laughable.

Remember when we used to pass the time arguing about whether deflation was inevitable (it is not) or if the precious metals and other markets are manipulated? (they are)  Or whether Elliott waves and other charting gimmicks were prescient? (they were not)  

Now we seem to have become resigned to life in an empire of fruitless anger and lawlessness.  The occasional hit on the outrage button makes many feel like they are alive.  Cynicism and selfishness reigns, and the love in their hearts has grown cold.

What is your responsibility?  It is to walk with the Lord, and be His hands and feet in the world, no matter what else the foolish and the headstrong and the unrighteous around you may be doing. 

It is never between you and them.  It is always between you and your God.  This is what it is all about.

My eyesight is slowly but steadily improving.  It requires determination and patience.

And so it may be, with the cure of one's soul.  Everyone carries this burden.

Have a pleasant evening.

 

Stocks and Precious Metals Charts - The Empire of Lawlessness

 

"Gold has worked down from Alexander's time.  When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory."

Bernard Baruch

"We looked into the abyss if the gold price rose further.  A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake.  Therefore at any price, at any cost, the central banks had to quell the gold price, manage it."

Eddie George, Governor Bank of England, conversation with CEO of Lonmin plc citred in Reg Howe v. BIS, JPM et al. September 1999

"What we see at present is a battle between the central banks and the collapse of the financial system fought on two fronts.  On one front, the central banks preside over the creation of additional liquidity for the financial system in order to hold back the tide of debt defaults that would otherwise occur.  On the other, they incite investment banks and other willing parties to bet against a rise in the prices of gold, oil, base metals, soft commodities, or anything else that might be deemed an indicator of inherent value."

Peter Warburton, The Debasement of World Currency, April 9, 2001 [gold at $259 per oz.]

"Synthetic gold, sourced in pyramids of credit extended to bullion bankers by central banks with little or no claim on physical substance, have provided a more efficient, better-camouflaged form of intervention.  COMEX synthetic gold and related over-the-counter derivatives are traded in macro strategies implemented by hedge funds, high-frequency trades, and commodity funds.  The volumes traded are huge, and bear little resemblance to actual flows of physical metal.  Above-ground 400-ounce .995-gold bars located in London, New York, and other financial capitals have steadily dwindled and disappeared into Asian financial centers, reformulated as .9999 kilo bars."

John Hathaway, Tocqueville Gold Newsletter 2Q 2015

"Time is coming when markets search frantically for physical collateral to find that paper far exceeds underlying collateral for several metals and other resources. I am warning that when markets fall in sustained negative response to bursting bubbles, widespread deleveraging will reveal insufficient hard collateral underlying traded asset-backed securities. The words rehypothecation and hyper-rehypothecation may be rediscovered or remembered again."

Harald Malmgren, 2019

Stocks dipped today, but managed to find a bottom and turn around finishing green into the close.

Gold and silver slumped, ahead of the Comex futures options expiration tomorrow.

The US may be approaching another debt limit standoff.  The deadline for this latest dark comedy is this Saturday.   

The political landscape is discouraging.

 "It can't happen here."

Some lessons of history need to be relearned again. 

"God has a way of standing before the nations with judgement, and it seems that I can hear God saying to America 'You are too arrogant!   If you don't change your ways, I will rise up and break the backbone of your power!  And I will place it in the hands of a nation that doesn't even know my name.   Be still, and know that I am God.'"

Martin Luther King, 1967

The madness serves none but itself.   

Nuts.

Have a pleasant evening.