SP 500 and NDX Futures Daily Charts - They Broke Out the Pom Poms Today

Someone describes this as 'the rally that everyone loves to hate.'

I think that is a euphemism for a cynically led rally with a very narrow participation that will head for the exits at the first whiff of trouble and take it down ten percent in a Manhattan minute.

And in the meantime, the cheerleaders are out on the financial networks, urging mom and pop to get in on their good thing.   Some of them fill out their outfits better than others.

Don't get in front of it. But the steadily rising prices are leaving many incredulous for a very good reason. 

This reminds me quite a bit of 2006.  The economics blogs have all retreated into inane details and are missing what is going on as they 'missed' the housing bubble.  It's almost funny.

Fraud is pervasive.  And when the next financial crisis comes, the same jokers will say 'Wow how did we miss that? But our models are still right.'

Divergence: HUI/GOLD Ratio Nearing 2001 Lows

As you know HUI is the 'gold bugs index' of mining companies.

As a sector the miners have been hammered.

This is quite a divergence. 

The Gold/Silver Ratio is also at rather high levels.

 

A Rather Large Long Bet on Silver Made As the Futures Took the Price of the Metal Lower

About the time that spot silver was smacked lower by the action in the futures markets, some punter placed a rather hefty bet on a near term 'out-of-the-money' May 18 calls on AGQ, the ultra silver long ETF.

It was trading around 25.50 at the time.

It *could* be a hedge on some silver short, but it is a rather hefty one given the strike and the timeframe.

Of course this is a pittance compared to the bets being made in the barely regulated and highly opaque derivatives markets.

Gold Daily and Silver Weekly Charts - 'They Make a Desert, and Call It Peace'

"When in any country the small-farmer class is being squeezed off the land; when its labourers are slaves or serfs; when huge tracts are kept waste to minister to pleasure; when the shibboleth of art is on every man's lips, but ideas of true beauty in very few men's souls; when the business-sharper is the greatest man in the city, and lords it even in the law courts; when class-magistrates, bidding for high office, deal out justice according to the rank of the criminal; when exchanges are turned into great gambling-houses, and senators and men of title are the chief gamblers; when, in short, 'corruption is universal, when there is increasing audacity, increasing greed, increasing fraud, increasing impurity, and these are fed by increasing indulgence and ostentation; when a considerable number of trials in the courts of law bring out the fact that the country in general is now regarded as a prey, upon which any number of vultures, scenting it from afar, may safely light and securely gorge themselves; when the foul tribe is amply replenished by its congeners at home, and foreign invaders find any number of men, bearing good names, ready to assist them in robberies far more cruel and sweeping than those of the footpad or burglar'--when such is the tone of society, and such the idols before which it bends, a nation must be fast going down hill.

A more repulsive picture can hardly be imagined. A mob, a moneyed class, and an aristocracy almost equally worthless, hating each other, and hated by the rest of the world; Italians bitterly jealous of Romans, and only in better plight than the provinces beyond the sea;  more miserable than either, swarms of slaves beginning to brood over revenge as a solace to their sufferings; the land going out of cultivation; native industry swamped by slave-grown imports; the population decreasing; the army degenerating; wars waged as a speculation, but only against the weak; provinces subjected to organized pillage; in the metropolis childish superstition, whole sale luxury, and monstrous vice.

The hour for reform was surely come. Who was to be the man?"

A.H. Beesley, The Gracchi Marius and Sulla, 1921

The mouthpieces in the media are maintaining a steady drumbeat against gold and silver.  The real economy wallows in official and financial corruption.

From discussion with friends in Japan, it seems that a version of a striking financial recovery in the US is being painted by the government and the media there, that seems to be at odds with the reality which the common American is facing. I am informed that a similar situation exists in the UK,  but with much less effect.   Who dares to question the sanctification of such success, and the power of an Empire?

"By dulling the blade of tyranny, I reconciled Rome to the monarchy."

Emperor Tiberius Claudius Augustus, I Claudius