Jesse's Café Américain

13 May 2015

Gold Daily and Silver Weekly Charts - The Coiled Spring - To Say 'No'

Gold and silver spiked higher today on the rather poor economic news that showed little monetary inflation in broad exports and imports, and also showed a slumping retail sales number that could not be blamed on the weather or a port strike.

So the dollar slumped, because the reality is that the US is not exceptional, and is certainly in no recovery. The Atlanta Fed's forward projection of US GDP for the 2Q is only marginally positive at 0.7 percent, after a likely negative number on a more realistic revision for 1Q.

There was intraday commentary on the lack of sustainable recovery and the harvest of corruption because of the lack of meaningful reform here.

As the dollar slumped, the bonds also continued to slump, which is starting to frighten quite a few traders, analysts, and economists who actually watch the markets in addition to their artificial models. Something has the financial class uneasy, and given the proportions of the latest in a series of asset bubbles created by the Fed, that is what is known as 'bad news.'

Gold and silver therefore found purchase as 'safe havens.' They were allowed to run back up to the top of their recent trading ranges, which are still in force, most likely backed by the Western banks and their agents of fortune in the financial sector.

Let's see if the metals can finally break out, or if we will have to go around another wash and rinse cycle again. It doesn't bother me all that much if we do, since this is just the sort of thing that sets up a move higher that will be of epic proportion when the metals pricing pool finally breaks down.

What should concern any thoughtful person is the inestimable damage being done to our society by these caustic and malicious policies of market rigging and wealth transfer that have been undermining the strength and the moral integrity of our nation for far too long.

And even worse is the allure of violence and oppression from opportunists who are only interested in plunder, an endless cycle of greed, bubble and bust, that leads only to spiritual death and madness.

Now is the time and the place to say 'no.'

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - History Repeats - Grapes of Wrath

Export-Import prices this morning came in weakly, showing little upward pressure on monetary inflation.

Retail sales however came in badly and that gave the markets the shakes.

The Atlanta Fed's model of forward GDP is showing 2Q at about 0.7 percent. Hardly the kind of number favoring a policy of tightening.

And so the dollar slumped and stocks initially soared along with gold and silver, because although the Fed would still like to throw a token rate increase our way, the fundamentals of the economy are starting to not only deny the recovery story, but are starting to signal a recession.

In addition to the consternation about where to invest, the leadership elite of the West needs to start considering why their policy of the last twenty years or so has been such an abysmal failure.

I think they know why, in the odd moments when they actually care about such things since the public good is such a low priority in their busy day.

They just do not wish to acknowledge it, because they are culpable, and not in a convenient position to do anything about it, because it would interfere with the flows of private plunder that are now some of the most significant economic trend in the economy.

I doubt anything will change unless we see a major economic dislocation that causes a large number of people in their desperation to march on Washington and demand the political class finally decide to do the right things for the people.

The last time that happened was the Bonus Army, and the military burned them out, and chased them with horses, tanks, and machineguns.

The final change came when the people, in a major revulsion against the status quo, voted in a genuine reformer who had actions and experience, more than just well spoken words. He could not be bought because he was already wealthy, and yet understood the notion of suffering and compassion because of a long time personal disability.

American history: to most Americans it's a mystery.

Have a pleasant evening.

Why There Has Been No Recovery In One Simple Chart - A Harvest of Corruption

"The money was all appropriated for the top in the hopes that it would trickle down to the needy."

Will Rogers, Nov 26, 1932

“Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”

John Kenneth Galbraith

"It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud."

Charles H. Ferguson

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

Upton Sinclair

"In regards to the price of commodities, the rise of wages operates as simple interest does, the rise of profit operates like compound interest. Our merchants and masters complain much of the bad effects of high wages in raising the price and lessening the sale of goods. They say nothing concerning the bad effects of high profits. They are silent with regard to the pernicious effects of their own gains. They complain only of those of other people.”

Adam Smith, The Wealth of Nations

"What we have are asset PRICES being whipped up as median real wages deflate."

Anthony Sanders, Whip It! Real Median Wages Down 3.4% Since Q1 2010

"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker

If the people have no money, they may buy no goods, even essentials, without falling ever more deeply into debt.

That is not so difficult to understand. Unless your paycheck demands that you not only cannot understand it, but not even see it, or talk publicly about it.

And so we have this sad spectacle of Our Great Reformer desperately trying to ram two trade deals through the Congress, without a real examination and debate, in the waning days of his office.

And we see the continuing attempts by the Congress itself to thwart and undo financial reform under cover of rhetoric and canards, so that they too might get paid by the moneyed interests.

The harlots of finance and economics will say, 'You laymen simply do not understand the mysteries of our science. Wages always lag in a recovery.'

Seven years is some lag. Unfortunately economics these days has less in common with a natural science than it has with marketing. And at its worst, it has become a carney sideshow.

But we might feel better about all this uncertainty if the corruption and distortion that have become embedded in our laws and economic theories, that preceded this and led to a long term secular stagnation in median incomes, had been changed in any meaningful way since the financial crisis.

And they have not. But yet we marvel that our condition seems intractable, unsolvable.

This is the root of our problem. It is old as Babylon, and evil as sin. If we sow greed to the worst of our desires, we will reap a harvest of corruption.