Gold Daily and Silver Weekly Charts - Negative Interest Rates Have Arrived

"We have been silent witnesses of evil deeds; we have been drenched by many storms; we have learnt the arts of equivocation and pretence; experience has made us suspicious of others and kept us from being truthful and open; intolerable conflicts have worn us down and even made us cynical.

Are we still of any use? What we shall need is not geniuses, or cynics, or misanthropes, or clever tacticians, but plain, honest, and straightforward men. Will our inward power of resistance be strong enough, and our honesty with ourselves remorseless enough, for us to find our way back to simplicity and straightforwardness?”

― Dietrich Bonhoeffer, Letters and Papers from Prison

Negative interest rates are a stealthy confiscation of wealth and of savings from those who are less equipped to protect themselves against it.

The policy makers seek to compel people out of their savings and any safe havens, and into the unreformed paper asset markets of Wall Street, so they can be sheared and then slaughtered.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Breaking Bad

Non-Farm Payrolls came in a tad to the low side, but close enough to be considered 'in-line.'

Stocks continued to romp higher. The Russell 2000 and the broader market continue to lag a bit, but has finally returned to even money for the year. Chart below.

In a quiet market, absent any exogenous events, they can certainly keep whipping the market higher led by the SP 500 and NDX futures tag team.

The economic news is relatively lightweight next week with a few of the more important items near week's end.

It feels exactly as though we are already in the dog days of Summer.  Since Alibaba is coming out on August 8th, we might well expect the market to muddle through until that beast can come forth, all things being equal.

It's not about the money; it's about the power.  We make a desert, and call it peace.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Pop Go the Weasels

Gold and silver liked Marvelous Mario's new negative interest rate policy for the ECB this morning. There is not a lot of doubt in my mind that they took a hit the past couple of days after option expiration to dampen any rally possibilities over what should surely be a big positive for the precious metals. Such are the ways of a currency manipulation.

So what next? Non-Farm Payrolls tomorrow, and Wall Street has set up what ought to be a real softball number of 215,000 headline jobs added, at least in the SIXTH year of The Recovery™.

If there are any more bad numbers to get out of the way, now would be the time to do it, because the midterm elections are drawing closer and closer, and the comps don't need to be increased for the months before an important event. That is certainly something that Wall Street and Pennsylvania Avenue have in common.

I am not so concerned with the short term movements in markets these days. Things will play out as they play out. Draghi's plan to institute negative interest rates on cash is significant, and don't let anyone make you think that is not. 

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Wages, Wages, Wages

The ECB initiated its negative interest rate policy today, and despite a brief slump the equity market took off and set new highs, squeezing the bears. Gold and silver liked this policy, which is probably why they were beaten down further post-option expiry. Can't frighten the herd you know.

Tomorrow is Non-Farm Payrolls, and Wall St has us set up for a softball number of about 215,000 headline jobs.

Its a tough call but I would like to think that similarly to GDP if Washington has any bad news to get out they are going to do it now, rather than closer to the mid-term elections.

Mary Jo White once again denied that the market is rigged, but waved her royal hand towards those who have been calling out the blatant front running hypocrisy, and initiated a few token reforms.

Tomorrow I would watch the hours worked and the wages paid. The jobs being added are inferior, and certainly will not be supporting an increase in aggregate demand which is what this economy needs to become sustainable, without adding a substantial number captive customers in new colonies, that is.

Have a pleasant evening.