Gold Daily and Silver Weekly Charts - Exceptional Hypocrisy

Gold and silver finished largely unchanged in a lightly traded session.

There were no deliveries worth noting at The Bucket Shop yesterday.  Nothing in gold, and a few bars of silver.

The gold warehouses were completely quiet, sitting tight with warranted (registered) bullion sitting at decades long lows, and with little historical precedent for their ratio to open interest.

The Hong Kong warehouses of the CME, of which Brinks is the only one of size, saw drawdowns below the one million ounce mark again.

As for silver, it was just the usual shoving bullion around the plate, with another drop in their registered bullion.

Next week is the FOMC rate decision and the quad witching expiry for stocks on Friday the 18th.

There was intraday commentary on the exceptionalism of the American economy here.

There will be no sustainable recovery until we have substantial political and economic reform.

And there is no use complaining about how you are suffering in rigged markets if you have so little interest in all the other injustice that pervades our financial system.

As the famous conservative politician Edmund Burke noted:

"When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle."

If I could do any small thing, it would be to open the eyes of those who feel the sting of injustice when they themselves are subjected to it, so they might see the injustice to which their fellows are subjected.

And it pains me to say that I have never heard a more plaintive, pitiable complaining coming from those who in the face of injustice done to others not only remain silent, but too often speak out in support of it.

They imagine that they have earned good fortune and justice and richly deserve it, while these others deserve the injustice that they get at the hands the same cheats and scoundrel.  They think their hypocrisy is somehow a contribution to the ordering of the moral universe.

They secretly identify with the powerful, in the hopes that somehow they themselves will profit from it, and squeal all the more loudly when instead they receive the same rough treatment from those who make little distinction amongst their victims, as long as they perceive them to be vulnerable.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Economic Malaise - FOMC and Quad Witch

Jeffrey Gundlach is speculating that the Fed might not raise rates next week because the markets are failing and the economy is weakening.

While I tend to agree with him on the economy, and am revolted by those leaning so heavily on the unemployment percentage while ignoring so much other data, as noted in this intraday posting, I do not think the Fed can stand pat next week and do nothing, and retain any shred of their tattered credibility.

The Fed was never acting on rates because of a robust recovery. We have an elite recovery while the broader public stagnates and the middle class, or what is left of it, hangs on by their fingernails.

The Fed will most likely raise rates, and they will do so in order to provide themselves some policy maneuvering room to cut rates when their latest financial asset bubble starts to collapse.

And if the Fed does not raise rates, which is possible, what will the market think? What will you think? See the Fed's problem? They have painted themselves into a credibility corner.

I have included the latest economic figures from this week. And this is a recovery?

Let's see how we end the week, and look forward to the FOMC rate decision and big quad witch option expiration for stocks on Friday the 18th next week.

Have a pleasant evening.

American Exceptionalism: Endless War, Parasitic Financialisation, Wage Stagnation, and Oligarchy

“The financial system itself continues to exhibit dangerous and erratic behavior; the stock market is rigged and Wall Street is a parasitic wealth transfer operation; commodity prices plummet; junk bond defaults double; derivative exposures remain in the dark; community banks are gobbled up; and the holdings of the mega Wall Street banks become ever more concentrated, with just six banks now controlling over 90% of derivatives and 40% of deposits.”

Wall Street On Parade

There will be the usual movement to 'blame the victims' in this, the 'gullible' American people who do not wish to face the facts.  This is how it always goes, and it works because it is easy to despise the other guy, or just hate 'the other.'

Most people are busy and working hard to make ends meet. They obtain their view of things from 'the news media' for the most part.

When was the last time you heard any rational discussion or even saw any of these charts below in a newspaper or on television news program?  They seem almost too hard to believe.

The American people are being fed a steady stream of lies and half-truths from a captive media, and for the most part the privileged achievers keep silent to protect their own interests, to 'go along to get along.'  They rationalize this by burying themselves in the details of their own professions.

If you hide the facts from people, and lie to them constantly to promote the interests of the powerful oligarchs and the moneyed interests, how can you blame the people for falling for the lies? Where is the truth to be heard?

Even now, if one puts up data such as this, the resulting prescriptions for change are all too often just pre-programmed slogans fed to the public on an almost daily basis by talk radio and the 'fair and balanced' mouthpieces for big money corporatism.

Have we ever seen a more ridiculous presidential election than this one?  The Republican candidates are for the most part stooges for big money and special interests, demagogues, legacy pledges, and jokes, and the Democratic frontrunner is a recycled Wall Street party boss who has become a multi-millionaire from the payments received for showing up at parties hosted by Big Finance's moneyed interests.

And what are the prevailing prescriptions for the future:  more war, more tax cuts, less rights to vote and organize, more consolidation of industry and power, less investment in public infrastructure, and of course, more cutbacks and austerity.

Just the right things to sustain a recovery for some, for the elite few.

And if things go wrong, they will blame the victims of their lies for not stopping them.  This is what greedy narcissists and sociopaths do, blame their victims.

I wish these charts included the percentage of the population incarcerated in prison, the number of children living in poverty, and the huge cost in lies and spending for wars to 'save the world.'

What went wrong?  Follow the money.  The American republic has been waylaid and twisted for the very obvious benefit a powerful few, and is in dire need of genuine political and financial reform.

These charts are from Jeremy Grantham in Give Me the Good News, with a hat tip to Zerohedge.

Gold Daily and Silver Weekly Charts - Until Confidence Is Restored

Surprisingly, to some, the economic news continues to show a marked lack of vitality.

In particular, wholesale inventories showed an actual decline, with the prior figure being revised sharply downwards as well. This does not bode well for 4Q GDP.

I have included the particulars in the evening stock markets report.

There are jobs to be had, if you like part time work with few benefits at a poverty level wage.  Granted the fortunate few are doing very well.  As it has been for quite some time.

The paper asset markets in bonds and stocks are edgy as they think that the Fed will raise next week, without regard to what is happening domestically and in the rest of the world, unless an unavoidable meltdown starts to manifest overseas that cannot be ignored.

At this point, the Fed seems to be so ensnared in the credibility trap that they cannot readily acknowledge the state of the real economy.  QE is an unmitigated fiasco, if not a tragic misappropriation of balance sheet flexibility which may be sorely missed in the future.

They must seemingly push on, and raise rates to provide policy room for the cuts to come when their latest paper asset bubble collapses.  Meanwhile, the financiers and thought leaders ignore this, burying their heads in the sands of detailed diversions and gettin' paid.

But, alas, belief in The Recovery™ is flagging among the broader public and those who have a mind to think independently as the economic statistics continue to show it to be wishful thinking. People can only suspend belief in what they see with their own eyes for so long, unless of course their perks and paychecks depend on it.

Speaking of ignoring things, the uncurious reaction by some to the odd happenings in the gold market is similarly puzzling.

Is this huge decline in registered gold compared to open interest and total gold in the warehouses nothing new or notable?  This has not happened to this degree before that I can find, and certainly not since the turn of the century.

As a reminder, 'eligible' gold is that which has been accepted by a licensed facility as being in a form and purity in accordance with the Nymex rules.  That is all that it means.  Someone owns it and is storing it in a licensed warehouse facility.

And 'registered' means that a warrant is attached to that gold, which is a prerequisite for a public sale on the exchange, that is, one in which the terms of the sale are fully disclosed and transparent.

The warrant is held in the name of a dealer, and not in the name of the owner or customer.  This is to facilitate its transfer in a delivery.  I tend to think of it as roughly analogous to a broker holding one's stock in 'street name.'  Maybe this is not precise, but it certainly seems to fit.

One might look at the trends in the data and conclude that they suggest that the gold that remains in the licensed facilities in New York is held for the most part in strong hands, who are not inclined to sell it at these prices.

The 'all is well' crowd likes to point to all the gold in the warehouses, including the eligible bullion that is privately held saying, 'see there is plenty of gold, and we are well-supplied.'   Except of course that the gold does not belong to the exchange or anyone else except for the owner.  And there is a less than usual indication that it is for sale, even to the extent of having a simple warrant for a sale attached to it that is easy to obtain and costs almost nothing.


I am not suggesting that there will be a 'default' in New York.  It has already become a nearly virtual trading place for synthetic gold claims, rather than for the exchange of bullion between buyers and sellers.

And the rules on what one might obtain in a crunch are remarkably kind to those who have the greatest influence, positions with the exchange, and the largest teams of lawyers.

But increasingly it is starting to look like a game of musical chairs, of borrowing from Peter to pay Paul. .

And even though the warrants do not expire, and do not compel one to 'sell' I can see why someone would not wish their gold to be held in some other financial organization's name, no matter how convenient that might seem.  Maybe that is the reason for this.

I notice that JPM has been accumulating gold again for its house account, and I suspect they will be ready to perform the role of key 'stopper' should there be any large amounts standing for delivery as this active month of December unwinds.  They did step in and supply the big demand in the last active month which we had.

Is this sustainable?  Is anyone looking closely at this and what is happening on these exchanges?

Have a pleasant evening.