Stocks and Precious Metals Charts - The Darker Gods of a Low, Dishonest Age

"In the past 5 years the amount of UST's the US needs to roll over every year has risen by nearly 15% CAGR, the while US nominal GDP is just over 2%. A 1200bp gap isn't sustainable for very long, yet the overwhelming consensus [assumption] is that it's sustainable for decades."-

Luke Gromen


"The first panacea for a mismanaged nation is inflation, the second is war. Both bring
temporary prosperity; both bring permanent ruin. But both are the refuge of political and
economic opportunists.”

Ernest Hemingway


"People who know nothing of God and whose lives are centered on themselves, imagine that they can only find themselves by asserting their own desires and ambitions and appetites in a struggle with the rest of the world.

They try to become real by imposing themselves on other people, by appropriating for themselves some share of the limited supply of created goods and thus emphasizing the difference between themselves and the other men who have less than they, or nothing at all."

Thomas Merton


"This is the way the world ends.
Not with a bang, but a whimper."

T. S. Eliot


"And what rough beast, its hour come 'round at last,
Slouches towards Bethlehem to be born."

W. B. Yeats

Along with love, darker spirits are moving among us. To whom shall we turn?   This is the critical question for each of us.

And when the unsustainable does not sustain any longer, we might see a bipartisan effort by the moneyed interests to come after what remains of the working class, in an attempt to finally roll back the last traces of the 'New Deal' and make of the public's misery a burnt offering.

If the last Gilded Age is any indication, and if history repeats, they will not stop in their mad quest for everything until blood is flowing and cities are burning,   How easily we forget the past.

These darker gods serve none but themselves.  Their worship is the way of madness, unleashed upon mankind again.

Will the rest of the world stand idly by?  Perhaps not.  Europe, Japan, Russia, China Line Up Against the US

Stocks managed to overcome their earlier losses on impeachment and trade jitters.

Gold and silver gave some of their recent gains back on a stronger US Dollar.

Have a pleasant evening.

Thomas Frank Explains the American Political Landscape To an Australian Gathering

Here is a fairly short, 25 minute overview of the American political landscape that Thomas Frank delivers in The Shaw Address in Australia.

He urges them not to go down a similar path in 'this low, dishonest age.'

Stocks and Precious Metals Charts - Home of the Bottomless Punchbowl - Jackson Hole

"At a late stage, speculation tends to detach itself from really valuable objects and turn to delusive ones.  A larger and larger group of people seeks to become rich without a real understanding of the processes involved.  Not surprisingly, swindlers and catchpenny schemes flourish."

Robert Z. Aliber and Charles P. Kindleberger, Manias, Panics and Crashes


"Excess supply could be more readily absorbed if we increased demand through redistribution.  Unfortunately, with tax cuts and austerity, this is not the direction of travel!   Our political masters, our esteemed economic advisors and Central Banks have all forgotten about distribution effects of their fiscal and monetary policies. 

We have been victims of a long line of theorists and ideologists who utterly failed to address  the distribution effects of policies. Ruled by fools so long they conditioned us for more fools at many levels of government and society.  Idiocracy may indeed have become built in."

Dr. Harald Malmgren

Just charts tonight.

Have a pleasant evening.

The Trend Change In Central Bank Gold Reserves in 2008 That Few Have Noticed And Fewer Acted Upon

This excerpt below is from a blog which I published in 2013.   It is a theme that I have been striking since 2009 specifically.

The turn in central bank gold buying came in 2008, although the bullish case for gold for other reasons became pretty obvious in 2002.

The bottom in the gold price was marked when England sold its remaining physical gold, in the notorious 'Brown's Bottom.'

By 2009 the data made it completely clear that the world's central banks had turned from net sellers of gold bullion in order to control its price and had become net purchasers of physical gold for their own reserves. 

Demand has been led by 'the New Silk Road.'

I suspect this change was a reaction to the currency crisis in the emerging markets in the 1990s.   It was referred to as 'the Currency Wars' popularized in China and given little coverage here.

And of course there was the failure of the Washington Agreement, struck in 1999 to manage the gold price through planned central bank sales in order to support what some called Bretton Woods II and the exorbitant advantage of the perodollar.

Hardly anyone outside of a small community of analysts had noticed, and even fewer understood what it meant.

I include the older charts, and a recent tweet by analyst Luke Gromen that shows where the central banks are in their purchasing today.

Hint, they are still buying gold, physical gold, and in steady to increasing amounts such that the 'free float' of available physical gold for delivery is strikingly low compared to demand.

I suspect that silver will have a role to play, judging by the enormous silver hoard that JP Morgan has established, for customers unknown.

Nothing to see here. Just a bunch of conspiracy theories.  And dirty little secrets that we prefer to keep hidden.  Move along.

"Few people realize that around 2008 central banks turned from being net sellers of gold to net buyers, and began to accumulate gold reserves in a big way for the first time since the 1970's, when Nixon slammed shut the gold window.

This is based on what they report officially to the IMF. There is strong anecdotal evidence that the actual turn in buying occurred quite a few years earlier, and more in line with the rapid appreciation in price as selling declined.

First the selling slowed and the stealth buying began, particularly in Asia and the Mideast.

There was a sea change in the gold market as central banks scaled back on their strategy of supplying official gold to the bullion banks in order to keep the price down.

The bottom in the gold price occurred when Gordon Brown threw England's gold with a pre-announcement into the market in order to bail out any bullion banks that were caught flatfooted 'in the turn' in May of 1999. This was the first clear sign that change was in the wind.

The Big Turn occurred in 2007 when the western central banks capitulated, and realized that they must allow the price of gold to rise, or exhaust their own gold reserves in the process. The central bank change did not cause this, although it certainly reinforces the trend. It is a symptom of the great change and the first unmistakable manifestation of the currency war. Although astute observers could see this coming in the aftermath of the Asian currency crisis in the 1990's and the Russian default on the rouble.

Gold commentators who do not realize this significant dimension of what has occurred and account for it in their thinking have been simply left behind, lost in an outdated frame of reference. They do not see the forest for the trees."

"Gold is unique among assets, in that it is not issued by any government or central bank, which means that its value is not influenced by political decisions or the solvency of one institution or another."

Salvatore Rossi, Chief of the Central Bank of Italy, 30 Sept 2013