NAV Premiums of Certain Precious Metal Trusts and Funds

Premiums are definitely falling on the Central Gold Trust, no doubt due to the acquisition offer from Sprott.

The Sprott Silver Trust has a negative cash balance, although I have just marked it to 'zero.' They will likely sell some bullion to raise money.

Gold Daily and Silver Weekly Charts - US Dollar - Le Douleur Douce du Monde

I saw pale kings and princes too,
Pale warriors, death-pale were they all;
They cried—'La Belle Dame sans Merci
Hath thee in thrall!'

John Keats, La Belle Dame Sans Merci

Today was a classic.  It was like tuning in to an old Milton Berle show and hearing all the familiar jokes, pratfalls, and goofy faces.

Gold came in steady, near to unchanged from yesterday's close.  It was roughly the same for silver.

Both precious metals were jammed higher for no particular reason in the early morning trade in NY, late London.

And both were smacked lower on the 'hawkish' FOMC statement, although stocks were having none of it, not one bit.

The reason for the metals smack can be attributed to their pricing in the dollar cross, as the dollar caught a bid.  Not surprising since most of the developed world is busy cutting rates and trying to devalue for the sake of their economies, and the Fed is talking recovery, even though there really isn't any sustainable recovery evident just about anywhere.  I discuss the stronger dollar a bit today here.

Looking at the end of day we see that silver is slightly higher by about $.10, and gold is down about ten dollars from the close at yesterday afternoon.

I hope you were not caught up in today's exercise in perception management, unless you were a daytrader, in which case you are in God's hands.  Or something to that effect.

I have switched to my second scenario for the gold retracement, taking the intraday low around 1152 as a hit on that objective.

Today was all about the stronger dollar.   I would hope that the stronger dollar's effect on the price of gold and silver in dollars does not require an explanation.

One can also justify higher stock prices by thinking that it will encourage foreign investors to buy our dodgy paper at these fat valuations.

Personally I think it is a mistake to attribute much to these short term antics.   So I will be skeptical for now.

I do not think the Fed can afford to sustain this stronger dollar, especially since they are looking for an excuse to raise rates for policy reasons, ie they want to get off ZIRP so they can cut rates in the future when their latest paper asset bubble ends in yet another financial crisis, without having to resort to negative rates.

It is a hard policy choice to go lower than zero, especially with a well-armed, cantankerous population.

In other news, Deutsche Bank has checked itself into balance sheet rehab for the next two years.  Considering they are a pre-eminent global counter party risk, I suppose that could be interpreted as 'good news.'

There was also intraday viewing of the fruits of neoliberalism with Chris Hedges and John Ralston Saul here.

So let us see how things progress.   I have a feeling that today was a bit of bravado, but it is wrong to underestimate the willful resourcefulness of the white collar criminal class.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Credibility Trap De Luxe

The mavens of Wall Street heard the 'tough talk' from the Fed, flipped them off with about as much brazen disregard as Donald Trump might show to his opponents, saw a chance to jam the shorts by gunning stocks higher this afternoon, and so they took it.

That is the long and short of it.

Let's see how things go with the Fed 'talking tough' at these lofty levels for paper asset valuations with inflating housing bubbles and a stagnating real economy.

Have a pleasant evening.

Das Bank: Deutsche Bank Cuts Its Common Stock Dividend to Zero For 'Two Years'

"Und der Haifisch, der hat Zähne
und die trägt er im Gesicht
und Macheath, der hat ein Messer
doch das Messer sieht man nicht."

Berthold Brecht, Die Moritat von Mackie Messer, 1928

This is not a big surprise, since there were hints of this sort of drastic action in an obviously troubled bank since early October, but it is always newsworthy when one of The Global Banks feels troubled enough to eliminate its stock dividend for the foreseeable future.

Their goal is apparently to build up capital assets while cutting risky assets from the balance sheet and exiting certain markets.

And so a key global banking counterparty checks itself into rehab for an estimated two years.

Es ist eine Party!

Deutsche Bank scraps dividend for two years, sets financial goals
By Arno Schuetze, Frankfurt

Oct 28 Deutsche Bank is scrapping this year's and next year's dividends as new Chief Executive John Cryan overhauls Germany's biggest bank to restore growth and put past scandals behind it.

The lender said on Wednesday it was targeting a capital ratio of at least 12.5 percent from the end of 2018.

It is also now targeting a leverage ratio of at least 4.5 percent at the end of 2018 and at least 5.0 percent at the end of 2020 and a return on tangible equity of more than 10 percent by 2018.

"The plan is based on the elimination of the Deutsche Bank common share dividend for the fiscal years 2015 and 2016. The management board expects to recommend the payment of common share dividends commencing from fiscal year 2017 at a competitive payout ratio," Deutsche Bank said. (Reporting by Arno Schuetze; Editing by Georgina Prodhan)

Related:  Deutsche Bank Downgraded by JP Morgan