Gold Daily and Silver Weekly Charts - Hidden Dragon, Crouching Dollar

China made its long awaited restatement of its official gold reserves, and it was widely received as a 'lowball number.' China was under some pressure from official central bankdom to update its numbers, the last time being in 2009. And since they are trying to play nice, and have their yuan including in the SDR basket of currencies, they had to say something. I am not sure how to take it except with some serious skepticism.

I include two new charts below that compare the performance of gold against the euro/dollar cross and the inverse of the dollar DX index. Clearly at this point gold is running inversely against the strong dollar and with the weaker euro.

This situation in the markets has 'extreme' and 'fragile' written all over it. I am not quite sure if we are at the 2007 level yet, but we are closer to that than we are to any sustainable economic recovery by a long shot.

The ratio of paper claims to physical gold continues to creep higher at over 97:1 as shown below. Rather than allow the price to rise to make more physical gold available the bullion banks keep selling their paper gold, raising and reraising the stakes to shake out the gold longs ahead of the throw down for August expiration on July 28th and more importantly the active months of August and December. If you were fearless about losses, you might choose to play their brand of poker the same way.

I hesitate to call any of this 'capitulation' because it is becoming such an obviously artificial situation. But I suppose at some point someone or something has to stop this, as the collapse of the Bear Stearns hedge funds led to the demise of Lehman, and the collapse of the paper credit bubble in 2007-8.

I suspect that the paper bubble in precious metals will have quite a bit of company this next time around, especially in a narrow group of grossly overpriced stocks and distressed debt.

Have a pleasant weekend.

 

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - New Era Tech Leads the Way Up Bubble Boulevard

The bubble is here.  Huzzah!

 

Look at the yawning divergence between a narrow group of new era tech companies and the broader market performance.  And forget about the performance of the real economy, which is terrible.  It is a mile wide and one inch deep.  Fragile does not begin to describe it. 

 

Between Fed policy errors and governmental reckless disregard we are seeing a very dangerous bubble having formed right now in a relatively narrow group of US stocks in particular and bonds in general, especially 'distressed debt.'

Every time I think that you can't overestimate the shamelessness of the 'ruling class' in the US I am left open mouthed. They really think that they are above the law and do not seem to care who knows it, because they are winning...

 

There was a big to-do about the housing numbers today, but those numbers were heavily skewed to starts for multi-family dwellings.  The fortunate are setting up their future income streams through rents.

 

People tend to pile hyperbole on hyperbole of dire warnings these days, and I don't want to get in the game of 'top this.'  I think we will see a market dislocation. Oh I see a crash.  Nope you are all wrong we are going to be reduced to small groups of survivors like 'The Walking Dead.'  I mean come on.

But we have now baked another financial crisis into the numbers, and it is just a matter of time before it arrives.

 

I don't know if they can keep muddling through this failure of public stewardship until Barack Obubble and friends can take their retirement and start cashing in, handing off the moneymachine over to the next representative of the oligarchs and perhaps some other crime family or not.  What a bunch of fakes and frauds.

They will never learn, and they will never be able to reform themselves or this rotten system. Someone has to take the car keys away from these serial bubbleholics.

Have a pleasant weekend.

 

 

 

Gold Daily and Silver Weekly Charts - An Extreme In Sentiment Ahead of Key Month

"Such is the rule of our warfare. We advance by yielding; we rise by falling; we conquer by suffering; we persuade by silence; we become rich by bountifulness; we inherit the earth through meekness; we gain comfort through mourning; we earn glory by penitence and prayer. Heaven and earth shall sooner fall than this rule be reversed."

John Henry Newman

Someone passed along some comments found on the web, that Bill Fleckenstein characterized as demonstrating 'an epic extreme in [negative] sentiment' for the precious metals, or something to that effect.

And those of us who watch these things are scratching our heads, because as we see this extreme negativity in sentiment, with the 'open interest' for gold on the Comex rising at the same time to very high levels, ahead of the active month of August. I have included the latest 'claims per ounce' chart below.

Things do make sense. There is a reason why the price of gold and silver are getting pounded against strong buying in paper here, and especially in physical bullion overseas.

But it does take some willingness to look at the facts of the whole matter, rather than failing theories that lead us from bubble to crisis, one after another, or the group think of the thug class.  That is worth shining all the light on it that is possible because frauds and deceptions love darkness and secrecy.

 

There is always the schadenfreude of the internet and those who cannot resist the temptation of a cheap remark to make themselves seem more serious.  Those things are not worth bothering about.

 

I hope that both those who yearn for meaningful financial reform and those who seek an end to the manipulation of precious metal markets have no illusions about how formidable a power is allied against them.  If they wish to see their future if things are allowed to progress as they are, look to Greece.

 

It is a shame that these different reform groups cannot see how much they have in common cause, despite their ideological and political differences.

This is the nature of our warfare.  Nec laudibus, nec timor.

Have a pleasant evening.

 

 

 

 

SP 500 and NDX Futures Daily Charts - No Fear, Little Shame, Lousy Pay 'With Benefits'

"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

A quick peek at the VIX chart below really tells the whole story of this market: no fear.   These sorts of extremes in manipulation and perception management to the point of delusion rarely last long.

We are in a financial asset bubble that is diverging from reality. The economic number from this morning's Philly Fed was abysmal. But the Fed just keeps on keeping on, with compounding policy errors and elite friendly bubbles.

This is going to end, and badly.

By mid-next week I think we will have a better idea of where we are in the wash-rinse-repeat cycle of the mispricing of risks.

 

There should be no doubt that this creation and management of another financial asset bubble is intentional at least in its effects, if not in its consequences.  

 

It is doing a very good job of channeling the vast majority of new money created by the Fed almost directly into the hands of the 'audacious oligarchy'.

Apparently Chairwoman Yellen likes the Employment Cost Index number which is increasing. Right below here is a comparison of the Employment Cost Index and the growth of wages.

 

As you can see, the employee cost index rose sharply while actual wages are flat to declining. What's up with that, besides seasonal adjustments and any other bureaucratic tinkering and the usual statistical suspects?

The index measures changes in the cost of compensation not only for wages and salaries, but also for an extensive list of benefits.

The benefits covered by the ECI include the following:

• Paid leave—vacations, holidays, sick leave, and other leave;

• Other supplemental cash payments—premium pay for work in addition to the regular work schedule (for example, overtime pay and pay for working weekends and holidays),

• Insurance benefits—life, health, short-term disability, and long-term disability insurance;

• Retirement and savings benefits—employers’ payments into defined-benefit and defined-contribution plans, including Employee Stock Ownership Plans (ESOP’s);

• Legally required benefits—Social Security, Federal and State unemployment insurance, workers’ compensation insurance, and Medicare;

• Other benefits—severance pay and payment into supplemental unemployment plans.

The grift is certainly working, and there is a recovery for some. 

But not for the 'working classes'.  That much is painfully obvious.  Let us not forget that most of the poor are the 'working poor.'  And there is a long line of unproductive drains on them from the FIRE sector, like a plump tick on their necks.

Have a pleasant evening.