Some Charts at 9 AM EDT - Disordered Economic Thinking

"For in that universal call,
Few bankers will to Heaven be mounters;
They'll cry, 'Ye shops, upon us fall!
Conceal and cover us, ye counters!'

When other hands the scales shall hold,
And they, in men's and angels' sight
Produced with all their bills and gold,
'Weigh'd in the balance, and found light!'

Jonathan Swift, The Run Upon the Bankers

Gold and silver have come back sharply to the levels that they had occupied before the smackdown related to options expiration and perception modifying in preparation for the Jobs Report.

I suspect that the Fed will try to squeeze in at least one rate increase before the Presidential elections.  I don't think they can do 50 bp but a 25 bp increase might be feasible with the right wording.

June seems a bit of a stretch, but it does leave the door open for another increase should they find a favorable set of data to smooth their way.

In a very real sense the slight movement of interest rates do not matter all that much at this point to the real economy.  They are a blunt instrument, more symbolic than effective.  But they are almost hypersensitive to unbalanced financial markets made tipsy by excess.

Most of the cheap money is flowing into speculative activities of the same jokers who overturned the financial markets and tanked the real economy in the first place.  And despite their denials, the Fed has their hand on the tiller of regulatory persuasion and power that could change that if it had the will to do it.  But as career minded timeservers, they do not.  They follow power, and the power is in the hands of Big Money and the Banks.

This is the price of a failure to reform.  This is the outcome when one tries to serve two masters.  This is the last stand of a failed ideology and a broken system foundering in the face of hard reality.

This is not policy, it is the hypocritical nicety that excuses mere looting by the powerful in the aftermath of a crisis.

Negative interest rates are the product of disordered economic thinking.  They are the result of an inability to confront the real, more serious problems in the banking system.  And so like so many compromises they are producing unintended effects that are actually counter-productive.

And this is why gold and silver are so attractive as a safe haven refuge, and why disordered minds despise them.

No Updates Tonight

"When despair for the world grows in me
and I wake in the night at the least sound
in fear of what my life and my children’s lives may be,
I go and lie down where the wood drake
rests in his beauty on the water, and the great heron feeds.

I come into the peace of wild things
who do not tax their lives with forethought
of grief. I come into the presence of still water.
And I feel above me the day-blind stars
waiting with their light. For a time
I rest in the grace of the world, and am free.”

Wendell Berry

I was out all day with my son in rural Pennsylvania.

I will be out of pocket quite a bit of tomorrow as well dealing with the usual routine medical matters.

I will try to update tomorrow evening.

The Mask Falls Off

Corporate Media Attempts Clinton Coup d'Etat On Eve of Super Tuesday Elections

By Pam Martens and Russ Martens: June 7, 2016

Hillary Clinton was not having a very good morning yesterday. The New York Post had devoted its full front cover to suggesting that Clinton has a Dr. Jekyll and Mr. Hyde personality disorder, based on an explosive new book by a former Secret Service agent who was stationed directly outside former President Bill Clinton’s Oval Office and is alleging outbursts and physical violence by the former First Lady.

The book has shot to number one on the nonfiction bestseller list at Amazon.com, meaning more headwinds for the Clinton campaign. On top of that, news was swirling that Senator Bernie Sanders had a good shot of trouncing Clinton in the following day’s critical primary in California, where a massive 475 pledged delegates are at stake. (Five other states are also set to vote today in primaries: New Jersey, Montana, North Dakota, South Dakota, and New Mexico.)

And then a funny thing happened. At 8:20 p.m. last evening, the Associated Press, which syndicates its news feed to newspapers around the country, ran a story with this headline: “Clinton has delegates to win Democratic nomination.” That quickly morphed into bizarre headline pronouncements that Clinton had actually “won” the Democratic Presidential nomination. Bloomberg News’ went with the craziest headline of the lot, writing: “Clinton Wins Democratic Presidential Nomination.”

Most Americans reading that would assume the Democratic Convention had just been held, votes taken, and Clinton had walked away as the winner. The actual votes won’t be taken until July 25-28 when the Democratic National Convention takes place in Philadelphia....

Read the entire story from Wall Street On Parade here.

Gold Daily and Silver Weekly Charts - Fed Cred

"The world can appear to be so empty if one thinks only of mountains, rivers, and even cities;  but to know someone here and there who thinks and feels along with us, and though distant, is close to us in kindred spirit - this makes the earth seem like a peopled garden."

Johann Wolfgang von Goethe

Too bad that the Fed's policies are turning most of the real economy into a barren parking lot.

Janet Yellen was out speaking today, trying to salvage some shred of the Fed's credibility after that awful Non-Fulltime Payrolls Report last week.

But despite the happy talk it just did not work.

Maybe people are listening to what the Fed heads are saying, but looking at the Fed's own data and seeing things like this chart on Labor Market Conditions on the right.

As you may recall, the Fed will be meeting FOMC style next Tuesday and Wednesday.  It is unlikely that they can raise rates by even 25 bp and ascribe that to economic necessity.  If they cite their own policy needs then maybe.  How can they lower rates again, given that negative rates are like some cruel prank gone viral, and they are still stuck near ZIRP?  

If rates ever do start going up with conviction look for a bloodbath in the bond markets.  And we have not seen anything like that yet.

Gold and silver were just moving sideways for much of the day in a very dull trade.

There was another big set of deliveries recorded at the Comex last Friday.

The NAVs of some of the Precious Metal Trust and Funds were also posted intraday and are worth a look.

Today's market action gave me the urge to go out and cut my grass, so I think I will do just that.

Have a pleasant evening.

Related:  Fed Labor Market Conditions Worst Since the Great Recession