Gold Daily and Silver Weekly Charts - Not Much of a Pullback Yet

Not much of a pullback but still stuck at resistance.

It appears that September has come and gone without the CFTC saying 'peep' about the manipulation in the silver markets.

Let's see how next week goes.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - HFT Is Strangling the Markets

I was a bit surprised to see the paint slipping off the tape today, in the face of slack domestic US economic news. People cannot spend what they do not have.

High Frequency Trading, as it now stands, is institutionalized corruption of the markets, and it is killing them. The SEC is looking at it, but it is hard to imagine that they will do anything meaningful in the way of reform.

Those who 'own' the exchanges are operating them as their personal casinos, front running and skimming customers at every turn, and they generally get their way with these regulators in the States.

The market was sluggish today. Let's see if the bulls can whistle up a rally next week on these light volumes.

A Financial Coup d'Etat and a Credibility Trap - What Must Be Done

These two statements on the credibility trap and reform are from the bottom of my blog, and a permanent fixture to the layout of the site.

I wanted to take a moment to remind you of them, because they can be so easily overlooked. And they often are.

What I say in quite a few words, Chris Hedges says in a fairly pithy manner in the video below. And I think he is right. And this applies as much to Europe and the UK and the Mideast, including Israel, as it does to the US and the rest of the Americas.  Of course one could name many other countries, such as Russia and China, but unfortunately they cannot fall from freedom, because despite the changes in names and slogans and the self-serving advertising campaigns of nationless corporate predators, they already have little or none.

The progressive movement lacks a spine for the moment, and is badly divided over a number of difficult issues which diffuse them, instilling hatred and fear in their hearts, driving out love, and leaving room only for a destructive pride and selfishness.  And the timid thinkers, the so-called intelligentsia, hide in their studies and in their cellars, and in their work, waiting for someone else to do something.

Eventually progressive people will come together or, as Edmund Burke observed, "...they will fall, one by one, an unpitied sacrifice in a contemptible struggle."

To those who say to hell with it, to hell with thinking, to hell with complexity, to hell with others, I say, be careful of the madness which you seek to unleash, because it will come back to consume you and your children, as it has done so many times before, and will do so inevitably again.

This is what I believe is happening now based on a careful reading of history. 

This is not a prediction.  This is a warning for a generation that is being prepared to accept the unthinkable on a much wider scale than they might imagine in their worst nightmares: torture, murder, ethnic cleansing, and repression.  And what is most frightening of all is that they think they are immune to it, because they are so different, so special, so exceptional.  And so they become willfully blind, and in their blindness, may become beasts.

A credibility trap is when the regulatory, political and/or informational functions of a society have been compromised by a corrupting influence and a fraud, so that they cannot address the situation without implicating, at least incidentally, a broad swath of the power structure including themselves.

The status quo has at least tolerated the corruption and the fraud, if not profited directly from it, and most likely continues to do so. The power brokers have become susceptible to various forms of blackmail. And so a failed policy can become almost self-sustaining long after it is seen to have failed, and even become counterproductive, because admitting failure is not an option for those in power.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

Gold Daily and Silver Weekly Charts - Negative Returns on Money Market Funds

Gold and silver had sharp rallies today as the selling going in to the end of quarter and the gold option expiry dissipated and a sharp short squeeze ensued.

Gold hit a new high in euros today on the back of fresh uncertainties in Europe, particularly in Spain.

As you know money market funds are savings vehicles with a fixed unit price that pay dividends, like a savings account. They arose as alternatives to bank deposit accounts because they were able to present higher returns than the regulated banks.

The Banks, and their regulatory friends who have been mostly among the Republicans want the money markets to have a floating price like a stock, opening the possibility for negative returns on savings. Turbo Timmy G. came out today calling for reforms in the money market funds, and a 'floating price' for the money market fund.

Et tu Timmy? All day long. The young man is getting ready to leave Washington after the election and take a lucrative trip through the crony capitalist revolving door, and probably into the banking sector.

The increased uncertainty, the chance of negative returns on your savings if the funds are allowed to fluctuate below one dollar per unit, is sure to drive quite a bit of risk adverse money out of the money market funds. And it opens the door to price manipulation and fraud, doing nothing to help promote transparency and confidence.

The Banks have always hated the money market funds, and are hoping capital will move out of the funds to them in the form of cheap, insured deposits.

I think quite a bit will go into gold and silver as people sicken of the financial repression of the Banks and their friends.