Gold Daily and Silver Weekly Charts - Midnight Train To Georgia

"This elite-generated social control maintains the status quo because the status quo benefits and validates those who created and sit atop it. People rise to prominence when they parrot the orthodoxy rather than critically analyze it. Intellectual regurgitation is prized over independent thought. Voices of the dispossessed, different, and un(formally)educated are neglected regardless of their morality, import, and validity.

Real change in politics or society cannot occur under the orthodoxy because if it did, it would threaten the legitimacy of the professional class and all of the systems that helped them achieve their status...

Even Alan Greenspan admits that neoclassical economics has flaws in theory and practice, yet it continues to be the dominant model at universities and in society. The faulty belief in the uber-rational, self-interested homo economicus probably persists mainly because it is a projection of the people who inhabit the privileged class.

Corporate externalization of costs are absorbed by society and forgotten when heralding the successes of industrialists and capitalists. Resource extraction and environmental degradation, which are part and parcel of production, consumption, and consequently, economic growth, are downplayed or ignored."

Kristine Mattis, The Cult of the Professional Class


"I don’t think there’s any doubt that quantitative easing enabled the rich and the quick. It was a massive gift… I hope that we do indeed succeed in being able to say in the end the wealth effect was more evenly distributed. I doubt it.”

Richard Fisher, former Dallas Fed President


"A glance at the situation today only too clearly indicates that equality of opportunity as we have known it no longer exists... We are steering a steady course toward economic oligarchy, if we are not there already."

Franklin D. Roosevelt, Commonwealth Club Address, September 1932

Sounds like 'the credibility trap' in action, acting as cover for a generation of self-deluding narcissists who can do no wrong, because they define what is right, most often after the fact.

Gold and silver were hit by cheap shot selling in the very quiet Sunday evening trade.  And then today gold went zig-zagging in a narrow range today as silver hung on to the 15 handle with its fingernails.

There were some deliveries of gold at The Bucket Shop last Friday, most of which were taken up by the house at JPM and friends.  There were no silver deliveries.

The activity in the warehouses was minimal.

We continue to wait for the chart to strike some direction, and active or nullify the currently developing chart pattern.

I was very sorry to see that the blog Some Assembly Required has closed its doors.  I have seen a lot of things changes, a lot of good people and internet sites come and go, over the last sixteen years.   I started blogging on a different site on the now forgotten Yahoo Geocities before 9/11 around the turn of the century.    It was mostly a collection of short term charts, updated with a remarkable frequency intraday.

And loads of creative, gimmicky things like music and animations and pointed commentary on the news of the day.  If one looks long enough, you can spot the malfeasance in financial matters often undetected by the passersby.  And I developed my primitive use of cartooning.  It was very engaging to watch the currency wars unfolding, the rise of multinational criminal organizations called Banks, and the repudiation and gradual receding of nearly everything good in the face of boundless greed.

When one is placing personally significant sums on the line for the short term, there is a lot of dead time spent waiting for things to happen, or not.  It is like waiting for the tourists to arrive at a shill-laden poker table or deadly dull sports book filled with old men betting the over/under on their next retirement check in Las Vegas.

And that time will be filled, somehow.  Generally with porn, video games, and pointlessly rude comments, judging by the content of the internet.  And of course, the occasional gems of real information laying buried or distorted by the official media mouthpieces.

If producing a blog or moderating a chat forum, which at a distance must seem to be highly attractive endeavors to those who have never done them, is not a frankly commercial enterprise that pays a livable return in money, which alas one always seems to serve over time, then it must become a calling of some sorts to endure.

The non-monetary returns of creative sharing, in purely worldly measures, are rarely commensurate to the effort.  One comes for a benefit, but at the last finds a work.

"I'd rather live in His world, than without Him in mine."

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - The Demise of the MIddle Class

The financial class tried to whistle up an add-on rally today on 'better than expected' economic numbers that were rather dismal in fact.

And so stocks drifted lower again today after the initial rally attempt on lackluster volumes.

Earnings season is just around the corner. Let's see if the continuing transfer of wealth from the working class to the financial asset manipulation sector can keep those corporate profits at these lofty valuations and phony expectations.

Have a pleasant evening.

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Rickards: 'Unallocated Gold Is a Euphemism for No Gold.'

I think that Rickards is correct in his judgement, and joins many others including Kyle Bass, who because of their backgrounds are much harder to ridicule and dismiss by the creatures of the bullion banks.  And in some of their more recent remarks about this, one can almost feel the desperation.  And here and there, the rats seem to be leaving the ship.

When this pyramiding of bullion and price manipulation falls apart, which history suggests that it must, there will be many angry investors demanding explanations of officials and regulators and bankers who will be shuffling from one foot to another, trying to excuse their lack of good fiduciary judgement and responsibility.

I just wonder if they will try to wait for some 'big event' to disclose this, in the hopes that fewer questions will be asked, and will be more easily dismissed.

As Rickards notes, and again I think he is right, they will 'close the gold trading window' and force settlements for cash at one price, and then reopen the price for actual bullion at a price that will climb  shockingly higher, despite a determined PR campaign by their friends in the media.

Perhaps I am wrong about this, but to me it has seemed for some time to be all too similar to the improbable sustainability of the Madoff scheme, and other such arrangements that depend on large numbers of people accepting a proposition that is dangerously misconstructed, misrepresented, and therefore mispriced in terms of risks.

"If JP Morgan leases gold from the US Treasury it does not mean that they back up a truck in Fort Knox and drive the gold away. There is no need for that. It is just a paper transaction. The gold can sit in Fort Knox. JP Morgan can take a hypothecatable title. Now once JP Morgan has the gold what they do is they sell it at times 100 to gold investors who think they have gold but what they really have is what is called unallocated gold.

Unallocated gold is a euphemism for no gold. If I call up JP Morgan and I say, 'You know I wanna buy a million dollars worth of gold,' they will say, 'Fine. Here is our contract. Send us the million dollars.' I sign the contract. I send the million dollars. They send me a confirmation and it says I own a million dollars worth of gold subject to the contract.

Well, read the fine print in the contract. What it says is your gold is unallocated which means that they do not claim to have any specific bar with a serial number or your name on it. In reality they have taken the same bar of gold and sold it to a hundred different investors.

Now that is fine if we are happy with the paper contract, but if all 100 of us show up at JP Morgan and they have only got one bar of gold, the first person may get the gold. The other 99 people, they are going get their contracts terminated. They are going to get a check for the value of gold at the close of business yesterday, but they are not going to get today's price movement or tomorrow's price movement when super spiking going up to $2,000, $3,000, $4,000 an ounce. That is when you want your gold for the price protection when everything else is falling apart. That is when you are going to discover that you do not have gold."

Read the entire interview with Jim Rickards here.

Very unlikely you say? Do you remember what happend to those who were holding their bullion in these warehouses through MF Global? And this was a relatively isolated event. A more general break in the chain of cross ownership and counterparty risks at 100 to 1 leverage would create a market dislocation that would be quite memorable.

And as a reminder, here is what Kyle Bass had to say about unallocated and hypothecated gold, even that held within a 'fractional reserve' exchange structure.

Gold Daily and Silver Weekly Charts - April Fools' Day

The Non-Farm Payrolls Report this morning was a mixed bag, with enough different kinds of data to provide material for both the hawks and the doves.

The dollar initially rose and stocks dumped, in sympathy with global stocks overnight action, especially the emerging markets.

But at some point Wall Street decided it was all good, and the word went from desk to desk that 'the Fed's got our backs, come what may. So don't ask why, just buy!'

And so US stocks climbed for the rest of the day on slow but steady buying, and after initially being slammed hard lower, gold recovered, as did silver, which managed to hold on to the 15 handle.

Speaking of handles, gold is now doing what I wanted to see in terms of setting a proper handle for the potential 'cup and handle' formation.

Look carefully at the gold chart below, and the way in which the price is moving within the longer term trends.   I do not know what is going to happen, but it certain helps to have a well-marked road map.

Stocks are jammed up into some more substantial overhead resistance, and with earnings season coming up, the Fed will have to provide more support than smarmy whispers of easy money for financial assets, and let the real economy fend for itself.

And when this latest bubble, third of this cycle, collapses like the rest, more substantial edifices to greed may fall than just some personal fortunes and pensions.

Have a pleasant weekend.