Gold Daily and Silver Weekly Charts

Another day of capping with some notable movement in some of the mining companies like AEM which soared nine percent today.

SP 500 and NDX Daily Charts

The selling is starting to look a bit overdone to the downside, but GDP on Friday may have some influence on the future direction.

Wall Street Back In Business, Largely Unreformed

“I have seen them, and they are a stiff-necked people. Now leave me alone so that my wrath may burn against them, that I may destroy them. Then I will make you into a great nation.” Ex 32

This brief video below is notable for an appearance by Yves Smith from Naked Capitalism. 

A credibility trap exists 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 hindering and 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 financiers will attempt to make the people an 'offer which they cannot refuse' again, as they did on the occasion of TARP, when they threatened to crash the economy.

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.

I do not see meaningful reform happening easily, given the intractable hysteria which is gripping those wealthy few who are eager to seize and hold power.  There is a portion of the public who think that whatever they believe must be true, whether the facts support it or not.   And this is a great heresy against reason, and an abuse of faith.  There will be no rapturous escape from judgement for this apostasy and lawlessness, except perhaps into madness.

There is an almost unbelievable tolerance of brazen bullying and deception, a sneering cyncism and disregard of any truth in people who say a thing one day, and then deny it and say a totally different thing on the next, without shame.  Love grows cold even among the faithful, and lies abound. 

This is the very epitome of the will to power. The western world and its leadership are at a crossroads. And the path ahead, if taken, means hardship, sorrow, and blood.

As for Germany's Gold, Things Are What We Say They Are

"Why wasn't the gold counted before this ?

Because it's very complicated and requires a big effort (so the americans say).   In fact the bars are lying around chaotically in the vaults of the US Fed, some of them at the far end of the walls."

Bild.de, Schützen Soldaten den Gold-Transport?


"In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank’s gold, or whether the gold is pure.

As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not."

John Carney, CNBC, The Germans Are Coming For Their Gold


"'When I use a word,' Humpty Dumpty said, in rather a scornful tone, `it means just what I choose it to mean -- neither more nor less.'

`The question is,' said Alice, `whether you can make words mean so many different things.'

`The question is,' said Humpty Dumpty, `to be master -- that's all.'"

Lewis Carroll, Through the Looking Glass

The American response is to arrogantly dismiss any concerns that the German people may have for the integrity, and even the existence, of a large portion of their national bullion reserves.

They believe that the German people will forget about this, and turn their minds to something else, and the audit can be explained away, delayed, and never done. It is too difficult, it is too expensive.

And these days, that is all the American financiers have to say to their own people to get anything they wish, to make any sacrifice that they may require of them. 

Oh, you wish to have decent preventitive medicial care?  You wish to have safe banks?  You wish to know what the M3 level of your own money supply may be?   I am sorry, it is too expensive.  Now run along and leave these complicated things to your betters.

If there was an audit done, as some might say, thirty years ago perhaps, then it ought to be easy to do another, if the gold has remained untouched. All one has to do is to verify what has been done.

And if it has not been done, then it is about time one should do it, given the value of the possessions which you are holding in trust for another. Unless of course you follow the modern financial management practices of MFGlobal and PFGBest.

Madness always makes sense,  to the mad.

I do not think that this will go away. When it comes to money, the German people are no fools.

"For decades, the Bundesbank has relied on written confirmation of its gold holdings in London, Paris and New York. According to the report from the German audit court, the last time Bundesbank officials physically inspected the central banks gold holdings was, well, never.

(It should be stated that the folks at FT Alphaville quote a report saying an inspection took place in 1979/1980.)

Interestingly enough, the Bundesbank is apparently quite happy with taking the word of other central bankers about the existence, location and size of its gold reserves. It put out the word that it disagrees with the Audit Court, which only has advisory power and cannot force the Bundesbank to follow its recommendations, about the need for inspections. Nonetheless, the Bundesbank is actually going to follow the recommendation that it verify the gold stocks. It also has plans to ship some 150 tons of gold back to Germany for a more “thorough examination.”

The Bundesbank is, of course, quite right in its opinion of the value of the examinations. In reality, it does not matter one bit whether the Federal Reserve Bank of New York actually has the German central bank’s gold or whether the gold is pure. As long as the Fed says it is there, it is as good as there for all practical purposes to which it might be put. It can be sold, leased out, used as collateral, employed to extinguish liabilities and counted as bank capital just the same whether it exists or not."

John Carney, CNBC, The Germans Are Coming For Their Gold