Gold Daily and Silver Weekly Charts

Intraday commentary on the German gold situation here.

There was some cross current discussion between Fed heads today, with regard to the future of quantitative easing and the state of the real economy.

It is good to note that the Banks have just slashed their estimates for US GDP for this quarter. The recovery is illusory, unless you restrict yourself to the gated communities and lofty towers of the pampered elite and ignore the state of the great bulk of your people.

Something must be done, of course, but the credibility trap is an obstacle to genuine progress. So until then, it is extend and pretend.

I see that Larry Summers is making a strong push to be the new Chairman of the Federal Reserve. It is hard to tell what is true and what has been planted by the financiers in the news, but Obama is said to view this favorably.

Proverbs 26:11 comes to mind.    'As a dog returns to its vomit, so a fool repeats his folly.'

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Another Record Close on the SP 500

Despite the faux exuberance from Wells Fargo and JPM earnings reports, the market action seemed 'heavy' even with the light volumes.

I thought it was notable that JPM made most of its profit from investment banking and 'trading.'

The market looks tired after a remarkably parabolic run.

NAV Premiums of Certain Precious Metal Trusts and Funds - A Rose By Any Other Name

"People always overdo the matter when they attempt deception."

Charles Dudley Warner

Just watching, and waiting.

Speaking of overdoing the matter, a reader informs me that the Fed has changed some names in their Monetary Base Report H3.

Excess Reserves are now called Balances maintained that exceed the top of the penalty-free band

Now, is that just a new bureaucratic euphemism, or is the Fed tipping its intention to start penalizing certain reserve categories held by the Banks with negative interest rates? And if penalties on reserves are enacted, what if anything does that imply for interest paid on savings deposit accounts and other savings vehicles?

Is that a calculator in Ben's pocket, or is he just glad to see us?

More On the German Gold Situation: Some Light from Deutschland and Canada

Journalist Lars Schall was kind enough to forward this excerpt from one of his articles that is printed below.

I think it 'frames up' the situation with regard to the repatriation of Germany's gold from the US very nicely.

How sovereign is Germany relative to the US? Indeed how sovereign are a number of the western nations vis-à-vis the Anglo-American establishment? The recent search for the elusive Snowden cast some light on the issue of sovereignty.

And as a corollary, how complacent and compliant are the western people to the Banks?  Have the Banks quietly assumed the role of government, without proper accountability to the people?

And secondly, what exactly is the problem with the gold? Is it there or gone? And if it is there, is it already spoken for, in the manner of modern banking rehypothecation? And if so, why?

Jeff Nielson casts some light on that subject of central bank leasing in his recent article here. It is finely reasoned. Short selling is legal, but like many legal things it can become illegal if it is done with an intent to manipulate prices, even with the blessing of entities who, through their association with a sovereign, hold themselves to be above the law and public accountability.

This is the excerpt of Herr Schall's interview. You may make up your own mind as events unfold, but it does seem to parse the subject quite nicely.

Lars Schall: In January this year, the Deutsche Bundesbank announced that it wants to repatriate some of its gold holdings at the NY Fed and all of its gold from the Banque de France. Do you consider it a bit strange that apparently it will take seven years to bring roughly 300 tons of gold from New York City to Frankfurt and five years to bring roughly 370 tons from Paris to Frankfurt? Moreover, the Bundesbank will leave a huge amount of its gold in New York City and London to have in the event of a currency crisis ”the ability to exchange gold for foreign currency […] within a short space of time.” Does this argument convince you?

Norbert Haering: The specifics of the plan for partial repatriation of gold seem to be designed to quash the public discussion about gold storage abroad. For many years to come, the Bundesbank will be able to answer these calls by saying: we are already working on it. And that will work well as a communication strategy. But the truth of the matter is that there is no good reason to store your national gold treasure abroad. The issue and the way in which the Bundesbank got itself tangled up in conflicting statements and justifications during these discussions makes one suspicious that either there is a problem with the gold or that Germany might not be as sovereign a state as we like to think. I do not know which one is true.

Lars Schall, Money Lies Disguise Banking Truths: An Interview with Norbert Haering

I find the refusal of the Federal Reserve to release the national gold of Germany for repatriation for seven years to be one of the most remarkable of recent developments in the world of money. And it is all the more remarkable in that so few are willing to even ask the most fundamental of questions regarding the custodial integrity of the bankers.

It is truly the dog that did not bark.

Stand and deliver. Either the bullion, or the truth.

Note:  You may click on the label 'German Gold' just below to see the other articles I have written about this subject.  In retrospect it seems rather obvious that this smash in gold price is tied to the request for the repatriation of Germany's gold, and the panic that ensued.  Just how depleted or compromised is the custodial bullion held in NY and London?