SP 500 and NDX Futures Daily Charts

After the bell Amazon beat on earnings, but guided lower next quarter. Their profit margin is thin, and getting even thinner.

Stocks remain thinly traded, without substantial underpinnings.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Thin premiums, but positively so.

Reinventing Bretton Woods: Global Finance In Transition - Currency Wars - Exorbitant Privilege

As you may recall, Bretton Woods was the name of the conference, taken from its location, that set up the post World War II international currency arrangement with the US dollar as the reserve currency of the world. It was based on a dollar convertible in gold.

When Nixon arbitrarily shut the 'gold window' in 1971 the world entered a reserve currency system of purely fiat dollars, often called Bretton Woods II.

There are a number of theories that suggest that such a system is not sustainable, for many of the same reasons that the euro is not sustainable. 

And as some have remarked, the control of a currency by a small group of men operating in private is an exorbitant privilege.

But putting that aside, the BRICs in particular are not happy with the existing arrangement which has been slowly falling apart for some time as the Federal Reserve imposes its domestic needs and policy on what is intended to be the rest of the world's currency. It finds itself in much the same position as is Germany in the EU.

I have addressed this many times before, suggesting that the eventual outcome may be a reconstituted SDR-like instrument based upon a broader basket of currencies and the inclusion of gold and perhaps silver as well.

The Anglo-American banking cartel are fighting this at every turn, because as we know to control the world's currency brings remarkable power. I suspect quite of bit of the hysterical antagonism against gold and silver is tied up in this.  And an ardent desire to 'cover up' some of their past shenanigans.  Germany should put pictures of its gold on milk cartons.

It is possible that they will thwart the objectives of this effort and most likely this conference. And what will happen then is a continuing fragmentation of the world into regional trading zones and spheres of influence.

This may be used as a reason to propose a one world government, that will be similar in composition to the European Union and controlled by a few elite politicians and their bureaucrats. 

We are eyewitness to one of the great events of economic history, and if anything it is remarkable how few economists and politicians understand what is happening. They are firmly embedded in their theory, and too often are willfully blind. 

Let us free markets from regulation, the Banks from restraint of law, and the money creation process from the bindings of oversight and transparency, and we will reach new pinnacles of prosperity.

I find that a well educated layman with a grounding in history and the practical side of finance and business has a better understanding of what is going on than the great bulk of theoreticians whose models are heading quickly towards the dustbin. I just read a strikingly good letter from my friend Hugo Salinas-Price, that proposes a basic model for regulating international trade.

And I told him it would get nowhere, even though it was probably directionally correct, and about as good a start as many I have seen. The status quo and their hounds would rise up against it, because they are not ready to accept change.

They will produce many weighty and learned papers that 'prove' that it is wrong. And they will twist and torture the data to serve their ends no matter what the data may actually say.  The Rogoff-Reinhart scandal is not an outlier in what is a generally disgraced profession.  But these are signs of the times, where there is little downside and enormous profits for deceit in the obsessive pursuit of money and power, at least for the exorbitantly privileged.

Money is power, and those who love power above all seek to control any and all changes to its structure, for their own ends.

Global Finance in Transition conference to take place in Istanbul


On May 7-8, 2013, Istanbul (Turkey) will host the Global Finance in Transition conference. The event is organized by the Central Bank of the Republic of Turkey jointly with the Reinventing Bretton Woods Committee and the Russian Ministry of Finance.

Representatives of G20 finance ministries and central banks, international organizations, research institutions and businesses will take part in the conference. Head of Turkey's Central Bank Erdem Basci, Deputy Minister of Finance of Russia Sergei Storchak and Executive Director for the Reinventing Bretton Woods Committee Marc Uzan will give the opening remarks at the conference.

Five panel discussions are planned as part of the event. They will cover the international financial architecture, in particular, changes in the flow of global investments, local bond markets and growth in emerging economies, incentives and determinants of investment and other issues.

In addition it is expected that new instruments and incentives for making the global financial system safer will be suggested during the forum.

You may visit the conference web site by clicking here.

Related:

Currency Wars Part II
Currency Wars
Russia Stockpiling Gold Likely For a New Trading Currency
Devaluing the Dollar, Against What?
What Will the World Reserve Currency Become?

This is the lesser known entry in the private contest that spurred Shelley to write his famous Ozymandias.

"In Egypt's sandy silence, all alone,
Stands a gigantic Leg, which far off throws
The only shadow that the Desert knows:
I am great Ozymandias, saith the stone,
The King of Kings; this mighty City shows
The wonders of my hand. — The City's gone,
Nought but the Leg remaining to disclose
The site of this forgotten Babylon.

We wonder, and some hunter may express
Wonder like ours, when through the wilderness
Where London stood, holding the wolf in chase,
He meets some fragment huge, and stops to guess
What powerful but unrecorded race,
Once dwelt in that annihilated place."

Horace Smith, Ozymandias, 1818

Gold Daily and Silver Weekly Charts - Comex Option Expiration Tomorrow

"If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will knock down everything that stands in its way."

Émile Zola

Tomorrow is Comex Option Expiration for gold and silver.

On Friday the US will release its advance number for Q1 GDP growth. Estimates are around 3 percent with a range of from 2.8 to 3.2.

I would not wish to hazard a guess on the number as they are quite fluffy and it appeals that they will become increasingly so when the addition of 'intangibles' is done a little later this year.

Watch employment and the median wage for a better indication, with and eye to corporate revenues, but not earnings which are often accounting fictions.

The shareholders of Barrick have rejected the Executive Compensation plan in what has been described as a 'tumultuous meeting.'  Good for them.

The rejection, which occurred at Barrick’s annual general meeting on Wednesday, was a direct challenge to a board that last year agreed to pay US$17-million to co-chairman John Thornton, which included a staggering US$11.9-million signing bonus — an unprecedented payout in Corporate Canada.

Barrick founder Peter Munk was defiant during the meeting, defending his company’s decision to bring on Mr. Thornton, who was a former president at Goldman Sachs.

Speaking of hubris, the Republicans in the House of Representatives are attempting to establish priorities in the event of a US sovereign debt default this summer.

Democrats are calling this the 'Pay China First Act' because of the manner in which it prioritizes interest payments to foreign holders of US bonds over veterans, soldiers, students and the military.

I would hope that Congressional salaries and expense reimbursements, perks and allowances are at the very bottom of the list. And I think clawbacks are not a bad idea as well.

This absurd talk about an artificially contrived sovereign US debt default may be one of the areas in which I could certainly find common ground with the Modern Monetary theorists. This is all posturing, reckless economic baby talk.