SP 500 and NDX March Futures Daily Charts

Non-Farm Payrolls tomorrow.

This will end badly, but it is hard to say when.

Le Market c'est moi, says Zimbabwe Ben. And we believe it.

Reform, American Style

Gold Daily and Silver Weekly Charts: JPM Stands for Delivery of Almost a Million Tons of Sugar

"A JPMorgan Chase & Co. unit took delivery of almost 1 million metric tons of raw sugar, the most for the commodity since 2009, to settle the expiring March futures contract in New York. JPMorgan Futures accepted delivery on 18,748 sugar contracts, or the equivalent of 952,398 tons, ICE Futures U.S. said yesterday on its website. That represents 9.2 percent of the current year’s U.S. consumption as estimated by the government. Prices climbed to the highest level in almost three weeks in New York trading today."

J. P. Morgan Takes Delivery of Almost 1 Million Tons of Sugar

I said cream, no sugar, Blythe. And use the silver service next time please. Oh sorry, I forgot you have sold it, and several times over.

Seriously, is this one of those trading positions one occasionally has that turns into an investment? Or is JPM just doing the buying for Krispy Kreme, Coca-Cola, et al. It could have been a legitimate hedging outcome as agent. I would hope it is not hoarding in times of shortage, or even worse, to promote food shortages.

Not so with silver I think, where they sell what they do not have, unless some of the miners have lost their minds, and are likely to be lynched by their shareholders.

Gold and silver were spiking higher today, but managed to get pushed down into the close for modest gains. I think they might be coiling for a move through the overhead resistance that is holding them back a little here.

For as low as the VIX remains, these markets seem to be on a knife edge. Seems like only Benny is holding the line, casting his paper upon troubled waters.

Watch for the action on Friday with Non Farm Payrolls and a potentially shaky weekend in the Middle East, and maybe even in the Midwest.

I was wondering if the some of the commentators on Bloomberg TV today snorting some of that JPM sugar for lunch. Certainly enjoying the high life.

I could be wrong, but this summer looks like it might be shaping up for another rough time in the markets.

SP 500 and NDX March Futures Daily Charts

Excuse me, I am still trying to regain my composure. A fund manager on Bloomberg named Matt just said that high oil prices will be no problem, because the US economy is booming, and everyone will just go out and buy new, more fuel efficient, cars. He said he went to the mall in Chicago and it was packed, and the best deal there was the $6 valet parking at Nordstrom's.

I wonder how many moons revolve around his planet. Maybe he is right. How does that track with your experience? Perhaps I should run a poll for the Yanks.

See, no problem. Buy stocks. Get them while they're hot.

I am a little more of the camp that thinks that unless the Fed can trigger a self-sustaining inflation, as soon as Benny and his Merry Pranksters stop buying through QEn, stocks and bonds will take a dive, because they and their cronies are the only ones buying this market.

But that's just my opinion and I could be wrong.  Let's see if Benny can blow another bubble.  Judging by some of the internet wunderkinds' valuations, he might be on his way. Tweet your magic twanger, Ben.

I am getting a few more emails taking me to task for being 'negative' and 'bitter' and being a spoilsport for the new good times.

I don't get around much anymore. Maybe everything is coming up roses in the US and I just don't see it. But it doesn't appear yet in any metrics that I watch closely and in which I have any confidence.

I have to admit that Benny shook me up a bit today in his lame testimony before the Congress. The less likely outcomes of deflation and hyperinflation just went up several notches in my book, especially on the inflationary side. He seems in denial to me, and kind of nervy.

Gold Daily and Silver Weekly Charts - Emperor Agonistes

Gold and silver surged higher today on the expanding troubles in the Middle East, and the faltering US dollar reserve currency. Buying from Asia remains very strong, particularly in China.

I flattened out my positions and am sitting in cash, waiting for another opportunity to enter a trade. As always, I do not touch my long term positions. That was a big move down in the stock indices and a big move up in the metals. No need to tempt fate when both sides of a pair trade work for you.

"Actually as I said what we are experiencing is an ongoing debasement of the dollar and I don’t mean to bang on the same drum, but this is the reality and it is critical for readers to understand this important fundamental. This is why all risk assets are rising in price. The increase in the S&P 500 in this case is a precursor to a potential hyper-inflationary event. This befalls a country which runs such high expenditure to deficit ratios. All things equal, this will end badly.”

Ben Davies, Hinde Capital

As you know I still believe that stagflation is the most likely outcome for the US, as the result of the policy failure created by a credibility trap that prevents the government from making the necessary reforms to its political and financial systems. Hyperinflation and Deflation are both possibilities, but remain outliers for now.

I could definitely see some improbably lunatic outcomes in the States, given the hubris of wealthy purveyors of propaganda and their shills who are leading their sleep-walking electorates to ruin. The US now has the worst unemployment of the ten major developed countries, depending on which deceptive government statistics you might favor.

If there was a double dip and a major depression there is some sizable minority segment of the US public that would either deny it was happening on ideological grounds, or simply fail to notice it was happening until they either starved to death or were overwhelmed by hordes of crazed zombies, as long as the electricity remained on and the mainstream media was continuing to dish out mindless pap for a diversion and corporatist propaganda for the news.

There is a commonplace saying that most conspiracy theories cannot be true and 'fall apart' because of the many people who would have to be involved,  and who cannot be all that clever and also keep things secret. I think that is wrong. Many conspiracy theories fall apart under skeptical and rational examination and factual inquiry. But some do not. The Madoff Ponzi scheme was certainly a conspiracy. What is not known is its breadth, how many insiders there there, and what happened to all the money.

Conspiracies are possible because too many people can be persuaded to become self-delusional idiots and true believers who allow themselves to be badly used by a very few clever men, who themselves are quite capable of making plans and keeping secrets with an impressively ruthless determination. 

And excepting for the inner circle which often quickly flees the scene or remains completely unknown, after a major conspiracy reaches a bad end and is exposed, the majority of those involved will deny that it ever happened, and that they even did the things that they undeniably did.  Or at least, that they never intended any harm, or ever meant to commit  outrageous acts against decency and common sense. And they will be outraged if you dare to hold them to account for their crimes.  And when they are finally forced to see the enormity of their actions for the first time, they are dumbfounded and seek to either skulk away, shrug it off, or remain in obstinate denial, seeking to punish someone, anyone, excepting themselves.

This is the backstory of the US financial crisis, and the credibility trap in which its government and intellectual elite are caught today.