34.53 Tonnes of Gold Withdrawn from the Shanghai Gold Exchange In Latest Week

The Comex is a rounding error compared to the global physical market for precious metals.

Shanghai saw 34 tonnes of gold withdrawn last week. 

There are less than 18 tonnes of registered (for sale at these prices) gold in all the Comex warehouses, and very little of it sees even a changing of hands, much less withdrawn.

This is why I call it a bucket shop. It has stopped being a major price setting mechanism for actual buyers and sellers of the physical metals, devolving into a speculative pricing platform.

This mispricing of risk and investment will have the usual consequences.

Gold and silver are natural currencies. And it is their physical nature that makes them resistant to long term manipulation.

Gold Daily and Silver Weekly Charts - The New York - London Gold Pool

Gold and silver ended the week pretty much revolving around the same trading ranges.

I might say that gold is coiling for a move, but I really don't quite feel it in the charts or the action on the tape.

The pricing on the Comex is being run like a bucket shop, so using finely tuned technical indicators is probably fruitless.

At some point this gold pool will break down. When that will be I cannot say.

Next week will be light for US macro news, so we will probably see more influence from China and their wrestling with their financial asset bubble, and Greece.

Have a pleasant weekend.

 

 

SP 500 and NDX Futures Daily Charts - China Bubble and the Canard That Is 'Say's Law'

Stocks gave up about half of the drifting higher advance of the prior nine days.

China took actions to dampen the very obvious equity bubble in their markets. Their dilemma is the same as most areas: they wish to stimulate growth, without creating dangerous asset bubbles.

Almost everyone is failing at this, because the plutocrats and oligarchs keep stimulating through the top down financial sectors, which are still fairly corrupt and predatory, and then cannot understand why growth isn't feed through to the masses in order to create more aggregate demand.

You might have heard of something called Say's Law from classical economics. It states that increased production is the source of growth in demand. According to Say's Law, when an individual produces a product or service, he or she gets paid for that work, and is then able to use that pay to demand other goods and services.

A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value.

As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase.

This is the typical kind of theoretically compact, model bound, hair-splitting nonsense that economists like to put forward, and is related to memes like the wealthy few are the job creators. This a more elegant way of saying 'build it and they will come to buy.' And they will buy because you have paid them equitable wages, and they will want what you happen to build.

It makes no allowance for fraud, theft, financial oppression, slavery, and all the panoply of human vagaries that do not fit into perfectly rational models that propellers heads can dream up.

I don't suppose Monsieur Say every considered labor arbitrage, predatory management, and global arbitrage in his fantasy, or the propensity of producers to pay as little as they dare by some fairly untoward means and methods.  I don't want to bet much on the rational benevolence of those who are motivated primarily by greed.

Given the stagnation of real wages for the past thirty years, I would suggest that anyone who still puts this forward should be shamed out of the room. See the utopian assumption in there? Whoever builds things will pay a living wage and increase those wages as productivity increases.

It had its latest incarnation as 'supply side economics.' Which is a load of rubbish especially in a global economy.

Economics is so often such a carney game.

Here is Jesse's Law.

Unregulated greed will rise to exceed and overwhelm all rational expectations of theoretical market behavior over time, always and everywhere, because men are no angels.   And since money is power, the greater the concentration of money in a society, the less free it will become, and the less reliable all decision based market-based models of it will be.  Rational expectations, and therefore market forces, will fail when undermined by the unbridled greed for money and power.  Passion and obsession will trump reason, unless reason arms itself against the excesses of human nature.   History proves this.

Have a pleasant evening.

 

 

 

Elizabeth Warren: The Unfinished Business of Financial Reform

If Elizabeth Warren were running for President, serious financial reform would be a key part of the national debate and her agenda.  The same can be said of Bernie Sanders.

Hillary may talk the talk but I am afraid that she, like the Republicans, are bought and paid for by the moneyed interests.   They are creatures of the system, caught in a credibility trap of deep capture by financial corruption.

 

Matt Taibbi:  Hillary's Fake Populism

 

We could be surprised. There is always that possibility.  We were certainly surprised by hope and change, in the wrong way. 

But I am not very optimistic.   The next President will most likely be from the same lineage of the last five as shown below.   They will most likely preside over the general trend in Western governments that, by distraction and deception, will continue to burn down the poor, the weak, the young, the aged, and eventually the middle class, to make room for the temple of Mammon.   And the love of many will grow cold.

The text of Senator Warren's speech may be downloaded in PDF form here.