Gold Daily and Silver Weekly Charts - Gold Pops Back, Economy Falters

"True bravery is always an act of love, of family and friends, of truth, duty, and honor. To stand and face the unknown requires that we care for something more than ourselves. There is no greater act than to move forward with our heart while our mind tells us to flee."

Much as I would like to serve up some legendary comments about the intense action in the precious metals markets today, the fact of the matter is that not much happened. Well, at least as far as the markets are concerned. I enjoyed working in the yard outside although the heat was a bit oppressive.

The claiming action in the Comex yesterday was minimal, and the warehouses were fairly quiet, although the ins and outs in the CNT silver warehouse still serve to impress a bit.

The metals popped higher led by gold which poked its nose over 1330 for a little while, seemingly off the FOMC minutes which really did not say much of anything new. The Fed will continue to taper until QE ends in October. And the unspoken 'unless' in that is 'unless something happens.'

They can keep rolling the bonds and interest over, and continue to expand their Balance Sheet. I suspect that they have bought so many Treasuries that they risk distorting the repos market, which is one reason why the taper is in place.

But the dollar dropped, and so gold popped.

Let's see how earnings continue to come in. We might see a little more action in mid-July as the BRICs gather, but as noted before, these big changes tend to happen very slowly, and then out of nowhere, all in a rush.

There are plenty of jobs, crap jobs at minimal wages. Political soft corruption prevails, and the lack of direction in the country towards big infrastructure projects is appalling. The US should be building major hubs of renewable power generation distributed by an upgraded and resilient power grid. New bridges and railways, harbor improvements and productivity enhancements spurring employment and demand would be a welcome development.

But this is not to be. The government is in the hands of the monied interests, and the printing being done by the Fed is directed into the unreformed private financial machine that strips assets, and builds little or nothing. Wall Street is truly a crooked casino, largely consumed with taxing the real economy with rigged speculation.

These are the dog days of Summer.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Bow Wow

Today was another dull day, with a dead cat bounce off the lows of the past couple of days.

Tomorrow will tell us if this is a real rally back, or just reflexive dip buying.

The FOMC minutes were the big tickle today, showing that the Fed will stay on a steady taper pace to end QE in October.

Some of the Fed members noticed that the markets seem 'complacent.'

Wow. What a surprise. Floating higher on a bubble of easy money, hand delivered to some.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - The 'Independent Fed' - Deutschland vs Brasilien

Gold and silver were hit by a trailing stop boogie woogie this morning, a half feeble effort to shake out the long who are running their stop loss orders a bit close.  These sorts of things do not bother us because we have an intermediate to longer term investment horizon, right?  lol.

Otherwise gold and silver finished largely unchanged on the day.

Much more interesting than this lazy Summer trade is the World Cup game in progress, with Germany dominating Brazil, 5-0.   The Germans unleashed a four goal torrent in a six minute period of the first half.  I thought one of the goals was a replay.   Brazil has not allowed five goals in an entire World Cup series since 1998. 

Well you know what they say, lucky in the World Cup, unlucky in holding on to your gold reserves.

We *might* see some precious metals action in the latter part of July in the metals, based on some things the BRICs may be doing and some derivatives related events, but I am not overly excited about it yet.  The Fed has the markets in hand it appears. 

In response to a couple of emails I would like to take a minute to remind you all again that the Federal Reserve system is owned by their member banks, who receive a 6% dividend for their shares from the profits that the NY Fed makes on its market operations.

It is not a government entity.  It operates under the license of the law passed in 1913.   The Fed has not always existed, and the central bank in the US has an interesting and sometimes controversial history.

Although the government has some oversight, which the Fed peddles hard on their own websites, and can take measures if they have the will for it,  the Fed is a private institution with a significant amount of its market power concentrated in New York.  The Fed has its own level of 'opaqueness and independence.'   One can debate whether this is a good thing or a bad thing, or just a thing.  But I did want to reiterate that popular misconception.

For now this is the dog days of Summer, and a good time to do work outside, and to spend time with your family if you can.

We had a quick lesson in apartments for rent in Brooklyn, as our number one son will be starting graduate school in the NYC area this Fall. The rents and house prices in the NYC metro area, including Manhattan, Brooklyn, Queens, and the Jersey area around Hoboken and Jersey City, are in a barking mad real estate bubble related to the rebound in the financial sector jobs and profits.

I am hearing of many places being purchased and then left vacant as 'stores of wealth' by overseas investment money.  And this is not even as intense as the things I am hearing from friends in London.   House prices in the NYC are back to pre-financial collapse levels and beyond in many areas according to Zillow. 

Have a pleasant evening.

 

SP 500 and NDX Futures Daily Charts - Alcoa Kicks Off the 2Q Earnings Season

After the bell Alcoa beat earnings and revenues to kick off the second quarter earnings season.

It was interesting to hear Matt Miller and Barry Ritholtz on Bloomberg TV extrapolating a strong year for the SP 500 stocks off this one result.  And it was funny to see Julie Hyman correct Barry's mistake about the increase in Alcoa's revenues, which were flat year over year.  She is often a breath of fresh air in the fog of endless jawboning.

I did take off the short position I had put on US equities on Thursday. It was a fairly cynical bet on a standard 'wash and rinse.' Now we can see if anything more significant develops, but for now its the same old, same old.

Have a pleasant evening.