Chris Hedges On the Real News

The Real News is featuring Chris Hedges to inaugurate a new series called Reality Asserts Itself.

Here is part two of a seven part series. Part one is an introduction to Hedges himself.

I don't always agree with Chris Hedges of course. If we did, one of us would probably be superfluous.

I find his ideas and observations to be thought provoking, even where I might not agree because I prefer different approaches or methods of achieving what could be similar objectives.

There is nothing wrong with that sort of divergence. Indeed, I find a diversity of thought and methods, within some fairly well established historical bounds of human decency, albeit too often violated for the sake of a false necessity or expediency, to be the most successful ways of achieving significant results in the real world.

But difference is anathema to the minds of the ideologues and true believers of whatever position on the political and social spectrum, left or right.    And this is why they almost always resort to involuntary conformity of thought, and become increasingly intolerant of the other.

COMEX Registered Gold Falls To Another New Low Ahead of Option Expiration and August Delivery

Registered gold on the COMEX falls to another new low for this bull market, to below 30 tonnes.

I enjoyed the perspective Harvey Organ put on it this evening.

"Tonight, the Comex registered or dealer inventory of gold lowers again and remaining below the 1 million oz mark to 950,441.152 oz or 29.56 tonnes.

This is dangerously low especially when we are coming up to the August delivery month.  Remember in June we had almost 31 tonnes of gold stand for delivery."

Perhaps I am missing something but one has to wonder what goes through someone's mind who is short into a market structure such as this, wherein the ability to deliver into demand appears to be increasingly impractical. Do they think that they are operating on insider information? Are they?

Or is this just another example of reckless disregard, fostered by large bonuses playing with other people's money?

If gold starts to run, the ensuing rush to the exits could be rather impressive.

Nick of Sharelynx.com does a rough calculation of the open interest/registered or dealer's gold. The number of owners per ounce is up to a bull market high of 46 claims for every ounce registered as deliverable.  There is a chart of this below.

Granted that this is not a realistic expectation, that everyone would stand for delivery, but it is an interesting metric that shows the relative balance between paper claims and physical reality.  No wonder the Gold Forwards have been negative for the past nine days. 

Let's see what happens. Confidence in the US commodities business has been racked by scandal after scandal, from price fixing to the theft of customer accounts. Little enough effort seems to have been made to reform it, to make it more transparent and efficient in price discovery.  The attitude seems to be that if you don't trust the markets, so what?

I am not saying that they will not be able to finesse their way through August.  There are plenty of ways to do it, higher prices being the text book example.  But one has to wonder how long they can keep this up, especially if the storms in the currency markets start blowing come November.

Stand and deliver.

Gold Daily and Silver Weekly Charts - The Gold Yuan Peg - Detroit Files For Bankruptcy

Intraday commentary on the reported desire of China to back the yuan with gold here.

I have not heard anything about this in the US media yet.  How remarkable.  Not.

After the bell the city of Detroit, Michigan filed for bankruptcy.  There are a few more cards like this ready to fall.  Main street is suffering while Wall Street and Pennsylvania Avenue are coming up roses.   And what's trickling down is not prosperity.

Europe and Asia should have no fear. Jack Lew, US Treasury Secretary, informs us on his way to the G20 finance ministers meeting in Moscow that he has the answers for them on how to fix their economies, as the US has already fixed theirs.   He is coming over on the Hubris Express.

Next week is an option expiration on the COMEX for gold and silver on the 25th.

The week after the August gold contracts start coming home to roost.

I see where 'the good bank,' that paragon of natural market rationality and efficiency, JPM Chase, is about to pay another massive settlement, this time for rigging the energy markets, in the manner of Enron according to Matt Taibbi.   I hear it implicates Blythe Masters who is recently risen to their office of regulatory compliance.

Where is that silver market manipulation study that has been five years in the making anyway? 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Marked Divergence - Welcome to Hooverville

Even Ben's second day of testimony could not shake the equity markets out of their dog days lull.

Philly Fed came in better than expected as did unemployment claims.

There was a marked divergence as the SP 500 finished higher while the tech heavy NDX dropped almost 30 points.

Things are looking so good that Jack Lew, the new US Treasury Secretary, during an interview on his way to the G20 finance ministers meeting in Moscow, shared his plans to tell the Europeans and Asians how to fix their economic problems by following the US example. China must reform, and Europe must stimulate growth.

GOOG and Microsoft both missed after the bell and the tech sector is slumping in sympathy.  

The City of Detroit filed for bankruptcy.  There are more cities and states that will not be far behind.

But Jack Lew is quite convinced the worst is over, and that the field is won.    Welcome to Hooverville.