An Uninvited Guest At the UK Arms Dealers Annual Dinner This Week

This was the scene at this year's annual dinner for the UK ADS Society:  Advancing Aerospace, Defense, and Security.

 

Who is in charge of their security, Inspector Clouseau?

 

Well said, nonetheless.

 

I wonder how good the vetting is at the Fed's conferences?  

 

At least the UK Arms Dealers were more gracious in removing their protester, than was Senator John McCain who reacted to his own anti-war protesters from Code Pink: Women For Peace this way last week.  Class!

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Tomorrow - The Fed's Serial Policy Errors

 

Gold and silver took the usual early hits and then came back a bit intraday.  As you can see, gold is pinned to support.

 

Speaking of jobs, the Cleveland Fed head Loretta Mester says that interest rates should be rising soon because of the solid labor gains.   And this from Cleveland? 

"There are accumulating signs that the economy is building momentum and that, this time, a pick-up in speed will be sustained because the underlying fundamentals have improved," Mester told a bankers' group in Columbus, Ohio.

Is this another 'green shoots' sighting?  Or a familiar phase in bubblenomics?  Victory, huzzah!  Because we say so.

 

I think maybe Fed President Mester needs to get out more often, and to more varied different venues than bankers' luncheons.   Youngstown would be a good place to stop for a Jib Jab hot dog.  Maybe not as good as the PO Lunch in Newcastle Pa., but certainly on a par with Yocco's in Allentown (or Easton if you want a beer with that dog).   And don't forget about Corporal Klinger's favorite, Tony Packos in Toledo. 

 

The working poor in her areas may not be able to afford McDonalds as much, but they still like their hot dogs when they can afford them.  Maybe while she is there, she can talk to some people about their wonderful lives in The Recovery™, compliments of the Fed's propeller heads and their serial policy errors.  

 

And while she is there, she can ask about what is going on in Europe, and factor that into her equations.   And about what the Gallup CEO recently said about the booshwa nature of the unemployment numbers.   Does she wish to make public policy based on that?    Maybe, until the real economy bleeds out.

 

God save us from the propeller heads, and the generals who are far from the field, and fighting the last war.  The carnage they inflicted in the first World War was epic.  And so was the carnage of their political peers in the terms of the peace.

 

I will try not to take what she says too seriously because the Fed has an itch to raise rates at least once, so they have room to cut them again when their latest bubble bursts.

 

Tomorrow is Non-Farm Payrolls.  I suppose they will create a good report to make us feel better.  They might even say something nice for a change about wages and labor participation. 

 

I have included a delivery report on gold below, which has sparked some real interest for the first time this month.

 

There was some intraday commentary regarding gold and the dore of war here.

I am not a 'gold bug' whatever the heck that means.  But I do think that gold and silver are important components of a solid portfolio, particularly in these times of currency wars.  I had a penchant for collecting coins from a young age, but never became interested in gold whatsoever until after 2000, when I became intensely interested in currencies. 

 

Anyone who studies currencies without appreciating the history and qualities of gold as a natural currency is ill-educated.  And people who 'hate' gold are probably the real goldbugs if I understand what they mean by it as a pejorative term, because they say the buggiest, most obsessively absurd things imaginable about it.

 

But to heck with them.  Their folly will be sifted by time.  Despite the antics which we may be in for tomorrow.

 

Tick tock.

 

Have pleasant evening.

 

 

Related: 

The Big Lie: 5.6 Percent Unemployment 

Greek economic austerity measures tied to 30 Year high in Suicides

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Let It Bleed

Non-Farm Payrolls tomorrow.

This stock market is priced for fantasy, and a bubble. 

 

Kudos, I imagine are in order, for the cynical pigtocrats who rode it all the up, talking it higher as they handed off to mom and pop and the managers of other people's money. 

And so we dream on.

Have a pleasant evening.

 

 

 

Ray Dalio's All Weather Fund Holding $6 Billion In Gold - The Doré of War

 

If this longer term investment allocation model became more general accepted by funds and the wealthy for their portfolios, and I believe that some day it will, then gold would have to undergo a significant price reset higher.  

 

Paper claims on gold will be redeemed in a run on the funds as the leverage unwinds, and the new demand for gold bullion far outstrips the crippled mining industry and the rehypothecated physical supply.

 

The current allocation of gold in most portfolios is minimal to none.  And when disinterest in holding that historical safe haven turns to fear and then greed, which it has done many, many times in the past, the result will be impressive given the over-leveraged and under-supplied structure of the market today.

 

Can this happen?  Are you kidding me?  What has NOT happened that the thought leaders and their financiers have assured us could not happen.  

 

But there is so much anti-gold nonsense presented by our sophisticates so often that the average person does not know what to think.  The flow of gold from West to East is little remarked upon phenomenon of historic significance.  And yet it is little remarked upon outside certain 'circles' on the periphery of the major media. 

 

Why is that?  I suggest it is the doré of currency war, both in terms of economic thought, historical knowledge, and the quality of their bullion.  And it will all be sharply refined out in the next financial crisis, as the tide of paper recedes once again.  As for proper pronunciation, who could pass up such a nice triple pun so easily.  See the orthographic note at the bottom below the video.

 

As a fiduciary Kyle Bass seems to think so, and so does one of the world's greatest fund managers Ray Dalio.  But then again, they are not very serous and famous people who regularly appear on bubblevision.   And so what do they know.

CEO.CA

This Hedge Fund Heavyweight Could Be Holding US$6 Billion In Gold

By Travis McPherson

5 February 2015

Ray Dalio is the founder of Bridgewater Associates, the world’s largest hedge fund firm and is one of the most iconic money managers on Wall Street.

The Harvard graduate created the All Weather fund in 1996 and revolutionized traditional optimal strategic asset allocation models. Instead of balancing portfolios based on total weightings only, he included risk, inflation and growth (now referred to as ‘risk parity’) in order to match weightings with risk exposure given certain inflation and growth scenarios.

The new spin on portfolio theory helped the All Weather fund return some of the most consistent numbers in the hedge fund business and allowed Bridgewater to grow assets under management to over US$160 billion (his personal net worth grew as well, now over US$15 billion). The All Weather fund holds roughly 50% of Bridgewater’s total AUM.

Mr. Dalio is a big believer in gold as a hedge against inflation and believes every portfolio needs a gold allocation.

The All Weather fund calls for a 30% weighting in stocks, 15% intermediate term Treasuries, 40% long-term Treasuries, 7.5% gold and 7.5% commodities. This means, the All Weather fund is holding up to US$6 billion in gold or roughly 4.7 million ounces (at $1,270/oz gold price)...

Read the entire article from CEO.CA here.

 

Cultural Aside

 

Before the better educated critics and the urbane write in, I am well aware that doré is properly pronounced as 'doreh or dory' and not as 'door.'  My French has grown feeble with years of disuse, but I am not yet a complete barbarian for the world's most beautiful language (with an honorable mention to Italian).  I freely admit to a bias in this.

 

However if English orthography famously permits Lord Byron to get away with pronunciation like this for Don Juan (as Don Joo Wun) in his epic satirical poem, then I am quite comfortable talking about the dore of war as a rhyme to make my own satirical point about the quality of the current stocks of 'gold bullion' held in places like the Comex and the Fed.  lol. 

 

And thanks to my long time reader from Delray Beach Florida for suggesting it.  It is truly the little things that make life, if not worth living alone, then surely at least interesting while looking for things that do.

 

Till, after cloying the gazettes with cant,

The age discovers he is not the true one;

Of such as these I should not care to vaunt,

I'll therefore take our ancient friend Don Juan.