David Cay Johnston: You Can Only Push People So Far

"For decades the American financial system was stable and safe. But then something changed. The financial industry turned it's back on society, corrupted our political system and plunged the world economy into crisis. At enormous cost, we've avoided disaster and are recovering.

But the men and institutions that caused the crisis are still in power and that needs to change. They will tell us that we need them and that what they do is too complicated for us to understand. They will tell us it won't happen again. They will spend billions fighting reform. It won't be easy.

But some things are worth fighting for."

Inside Job

Chris Hedges: Reform or Revolution

"In the task of that redemption the most effective agents will be men who have substituted some new illusions for the abandoned ones. The most important of these illusions is that the collective life of mankind can achieve perfect justice. It is a very valuable illusion for the moment; for justice cannot be approximated if the hope of its perfect realization does not generate a sublime madness in the soul.

Nothing but such madness will do battle with malignant power and 'spiritual wickedness in high places.' The illusion is dangerous because it encourages terrible fanaticisms. It must therefor e be brought under the control of reason. One can only hope that reason will not destroy it before its work is done."

Reinhold Niebuhr


"Those who make peaceful revolution impossible will make violent revolution inevitable."

John F. Kennedy

The illusions of extremists, of both the right and the left, are very dangerous things, for the very reason that they often incline themselves to sacrifice the individual, and even surprisingly large groups of individuals and segments of society, for the 'greater good' of their extremes and their illusions.

One only has to look to the excesses of the French Revolution, with the slaughter of the aristocracy and the burning and desecration of churches and monasteries, the wantonness of the Terror and the Reaction, and the eventual rise of Napoleon out of that chaos of the sacrifice of reason.

An seemingly endless parade of infamous tyrants, forgotten viceroys, and faceless bureaucrats always seem to have their roots in the extremity of illusion that rises out of some turmoil of excess, and the throwing off of the restraints of reason.

And no people, no organization of people, and no nation is immune or exceptional to this extremity, not by a long shot. The human being is remarkably clever and wonderfully self-deluding in choosing the things that they know are wrong, that they hide both from the world and themselves at first. That they excuse, wrap in exceptionalism, drape in personal exemption and necessity.

Evil is a choice, or more properly a long, gradual succession of choices. And it never sleeps, is always open for business.

Shanghai Gold Exchange Has 73.3 Tonnes of Bullion Withdrawn Its Third Largest Week

For the week ending July 24th there were 73.289 tonnes of gold bullion withdrawn from the Shanghai Exchange into China.

That is about 2,356,296 troy ounces in one week.

I have included the most recent statistics from the Comex Gold Warehouses below.  There are currently 351,519 ounces of gold available for delivery at these prices there for the month of August.

Nine out of ten Americans will notice that in terms of technical analysis this is 'a lot less.'

But as the very serious people like to point out, the Comex is not really 'a physical exchange.'  Yep.

And as you may have seen in the posting from earlier today showing the sea change in leverage over even the past ten years there, it is seemingly getting a lot less physical all the time, even compared to just five or six years ago. Winning...

Even the US Mint seems to be getting in on the act.  The mint sold 202,000 ounces of gold in the form of coins for the month of July, one of its largest monthly sales totals in several years.

That's a lot of pet rocks.

Do the math. I wonder where the poor, deluded ignoramuses who obviously do not understand finance are getting all that money to spend on such worthless trifles.  Does the US Mint take food stamps?

While they last.

This chart is from the date wrangler Nick Laird at sharelynx.com.

Gold Daily and Silver Weekly Charts - Entering the Active Month of August - July Payrolls Next Week

Gold and silver popped today and the soaring dollar dipped as wage growth, as plotted by the ECI, was shown to be at a twenty year low.

What a surprise.

Keep in mind that the 'dollar index' DXY is hopelessly outdated, and is little more than the inverse of the Euro.  And brother does the euro have problems. 

So it might make the dollar look good when in fact it is fundamentally deteriorating as well, just not on the same timescale.

A strong dollar does what again?  Oh yeah, it stifles exports and domestic manufacturing.  Perfect policy choice, but only if you are a predatory financial vulture looking to buy up foreign assets on the cheap with overpriced dollars.

Former President Jimmy Carter says that the US is an oligarchy with unlimited political bribery.  I don't remember hearing about this on the evening news or the mainstream political talk shows.  Ho hum.  Who cares.

The rest of the world already knows it, and the American olilgarchs are too busy dividing the garments of His creation by casting lots to care.

There was intraday commentary on the gold market here.   The precious metals market is going to blow up at some point if it continues in this manner.
  

I am not looking for a default on the exchange since it is set up to be settled in more paper.  Rather, I am thinking of a serious break in confidence in the markets overall, at long last, as sort of 'a con too far.'   How many frauds in major markets have been exposed in the past ten years.   Are there any markets that are not manipulated by the financiers?

The problem is that the wiseguys get all full of themselves, and the easy victories fill them with puffery and bravado.  And so they keep pressing their bets until they hit the wall.  And the last two times we bailed them out.  Big mistake.

It is the outcome of almost every financial fraud that has ever been.  They never know when to quit, and certainly cannot stop themselves.  They are like addicts.  And it works for them.

It may not be the precipitant of the financial event, but it will be in the mix.  It looks like an accident waiting to happen, all of it, just like the 2007-08 mess that everyone denied until it rolled over on us.

Non-Farm Payrolls next week.

Have a nice weekend.