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JPM loves gold, and recommends buying the miners to play it with gusto no less.
I know, it's kind of creepy at first blush, isn't it? Do Bankers blush? Do their algos dream of electronic sheep?
Curiouser and curiouser.
What's next, will Jonny Nads turn bullish on what his people have been selling for years, and many times over it appears? Perhaps that would be just too much, and contrarian indeed.
It must make that other craven crow, Jeffery boy, just flip his wig a hundredfold to hear such heresy from the princes of the metal bashing set.
Well, it could be a nicer look for Blythe. Gold flatters the face, whereas silver makes one pale.
Perhaps it is just a distraction from silver, which their central bank cronies cannot lend to them, having little or none anymore. Or perhaps a central bank chum whispered some words of hidden wisdom into their ear. I have heard faint whisperings as well.
"I have heard the mermaids singing, each to each...
I have seen them riding seaward on the waves
Combing the white hair of the waves blown back
When the wind blows the water white and black.
We have lingered in the chambers of the sea
By sea-girls wreathed with seaweed red and brown
Till human voices wake us, and we drown."
Well perhaps not so much human, as dismal voices, the mumblings from the bearded men of the financial demimonde.
Was that a bear hug they gave it today? Or were they just clearing the decks for their own trades. Hard to tell in all this excitement, who is zooming whom.
But what goes around apparently comes around, and this has been a long time coming. As the founder of their bank, James Pierpont Morgan himself, once said:
"Gold is money. Everything else is credit."
Mirabile dictu. Barbarous is Back.
WSJ
Gold: J.P. Morgan ‘Loves’ It Big Time
By Dave Kansas
August 4, 2011, 9:49 AM ET
As Old Yeller races higher, J.P. Morgan comes out today with a report banging the drum for the barbarous relic.
“We love gold,” J.P. Morgan says. They add: “Many investors may look at the gold price chart with disappointment and assert it’s too late for them to buy. We disagree.”
The bank says that Western governments need to either raise taxes or cut spending or both, and nobody in authority seems ready to take those kinds of tough decisions. As long as everyone’s punting, J.P. Morgan believes gold will keep rising.
J.P. Morgan also points out that South Korea’s central bank recently snapped up 25 tons of gold, joining Mexico, Russia and Thailand as big buyers of the yellow stuff.
In a twist, JPM says gold stocks, which have lagged the surge in gold prices, might be a good vehicle to get into the gold game. They like Goldcorp, Kinross, Newmont and Barrick.
The overnight and early morning rally in the metals was met with heavy liquidation selling around noon in New York. Gold finished down only 14 dollars from yesterday's close, but it was a much larger intraday reversal.
I think the Street and the monied interests are prepping the markets for QE3. The Fed meets next Tuesday.
I took a little time from my 'vacation' today to put some money to work in the market in the latter half of the New York trading day.
There was a major selloff in Europe and the US today as fears of slowing economies and a sovereign debt crisis intensified.
There was a flight to safety in the dollar and Treasuries, and early on in gold. But the price rise in gold and silver was cut short as selling increased and it turned into a general liquidation.
Non-Farm Payrolls will be released tomorrow morning.
The Federal Open Market Committee will be meeting next Tuesday. The cynical part of me suggests that this week is a setup for QE3.
The Bank of New York Mellon will begin paying negative interest rates on very large cash savings deposits, over $50 million, this week.
As an aside, we wonder why the Fed does not similarly reduce the interest they pay on bank reserve deposits with them to zero from the current .25 percent?
It should be noted that Bank of New York Mellon has a current dividend yield of 2.06%. Are those dividends taxable? Will depositors be able to claim a lost on the negative interest they pay to BNY Mellon?
Not a sign of deflation if you understand it, although I am sure some will tease that conclusion out of this. Negative real interest rates are the hallmark of quantitative easing, which are artificially low interest rates and the creation of non-organic money, printing paper if you will. It is just they are nominally positive on the longer end of the curve. When they go nominally negative on the short end for a sustained period, you know we are not in Kansas anymore, Toto.
This is a clear sign of a topsy turvy financial system, of dysfunctional markets, of predatory banking, distorted risks and returns, and a broken economy with negative real interest rates that are likely to become...more negative. The US can get by with this because of who they are, and what the dollar represents to world trade.
There is a major bear raid on gold today, capping the earlier flight to safety. I think this is more indicative of extremes at the short term in the trends of stocks, bonds and dollars. But the Non Farm Payrolls are tomorrow, and the market is watching them and the situation in Europe rather nervously.
Remember this story the next time someone says that the problem with gold bullion is that it pays no interest, and there are costs to store it.
If the Fed can create it, they can also confiscate it, and transfer it to their friends, creating winners and losers, and sometimes almost at will. And that is the problem with fiat money and the banking cartel that surrounds it.
WSJ
BNY Mellon to Charge for Some Deposits Above $50 Million
BY LIZ RAPPAPORT
Bank of New York Mellon Corp. is preparing to charge some large depositors to hold their cash, in the latest sign of the worries roiling global markets.
The biggest U.S. custodial bank said this week in a note to clients that it will begin slapping a fee next week on customers that have vastly increased their deposit balances over the past month.
The bank cited the massive dollar deposits it has received over recent weeks, as investors and corporations retreat from financial markets amid Europe's debt crisis and the recent debate over U.S. government ...
