Stocks and Precious Metals Charts - Sleepwalking

"Wouldn't it be convenient for the oligarchs if their think tanks could somehow concoct a story, some plausible sounding theory, to persuade a portion of the world's population to hold dollar assets, expecting them to gain in value, even in the face of significant defaults and credit failures and a deteriorating return in GDP growth per marginal dollar debt?   Or even better, getting them to remain fully invested in a series of artificially contrived dollar denominated financial assets that could be selectively 'pulled down' while keeping the overall scheme intact and running.

Bernays would be proud."

Jesse, 16 June 2010


"Growing concentration of power in the US has been under way for decades, and has now reached the point where how our economy and society are managed seems remarkably similar to the dominance of oligarchs in Russia or the role of few wealthy families in the shadows of China's CCP."

Harald Malmgren

Stocks attempted to rally in the new week, and the last of the month of February.

But alas, the early morning pop faded substantially into the afternoon. But they did finish slightly positive to flat.

Gold and silver finished off a bit.

There will be a Comex option expiration at the end of the week.

The Dollar was lower.

A huge windstorm came blowing through our state today.  No, it was not Trumpolini on his way to his golf course in Bedminster, NJ.    It was the tail end of a strong weather system, that took down power lines and tree limbs.

Have a pleasant evening.

Stocks and Precious Metals Charts - End of the Line - The Big Gold Bullion Short Overhanging the Market

"Time is coming when markets search frantically for physical collateral to find that paper far exceeds underlying collateral for several metals and other resources.   I am warning that when markets fall in sustained negative response to bursting bubbles, widespread deleveraging will reveal insufficient hard collateral underlying traded asset-backed securities. 

The words rehypothecation and hyper-rehypothecation may be rediscovered or remembered again, forgotten somehow during much of decade since the Great Financial Crisis."

Harald Malmgren


"Those who run Washington generally trust the inhabitants of think tanks of their political bent to provide the intellectual foundations upon which much of public policy is built.  At least in some cases, however, that trust couldn’t be more deeply misplaced, since cornerstones of the ever-expanding think-tank universe turn out to be for sale.

In other words, those experts you regularly read or see on screen, whose scholarship and advice Washington’s politicians and other officials often use, are in some cases being paid, directly or indirectly, by the very countries [corporations, and oligarchs] on which they are offering advice and analysis.  And here’s the catch: they can do so without ever having to tell you about it."

Ben Freeman

Although not exclusively, think tanks seem to be spin factories in service to some faction of the global political powers and/or the moneyed interests.

There was some news from Washington in the afternoon that the US and China had reached an agreement in principle on currency, and are going to be toddling along with the other, more difficult trade issues.

Gold took its correction from a short term overbought condition reasonably well, as did silver. Let's see how it can do next week.

There is a largely undisclosed 'short' position on gold bullion, that exists almost without regard to the paper shorts that ebb and flow in the trading markets.   As Harald Malmgren notes above, when that short gets called, it will leave a mark.

There will be a significant amount of economic data next week, some of which may be market moving.   I have included the calendar for next week below.

Need little, want less, love more. For those who abide in love abide in God, and God in them.

Have a pleasant weekend.

Stocks and Precious Metals Charts - The Madness of Crowds

“In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do.  We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”

Charles MacKay, Extraordinary Popular Delusions and the Madness of Crowds


"Put on the whole armour of God, so that you may be able to withstand the allures of evil.   For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.  Therefore take for youself the whole armour of God, that you may be able to withstand the evil of the day, and having done all, to remain standing."

Ephesians 6:11-13


“Judging others makes us blind, whereas love is illuminating. By judging others we blind ourselves to our own evil and to the grace which others are just as entitled to as we are.”

Dietrich Bonhoeffer


"I am on your side.   But you have no way of knowing it, because your heart is blind."

Albert Camus, The Stranger

A people do not just go mad on their own for the most part.  A few do, some perenially wacky minority.  But the rest have to be lied to and manipulated through well-crafted narratives that play on their worst emotions by those who would unleash the madness to serve their own selfish ends of money and power.   What they do not realize is that in the end the madness serves none but itself.

Stocks fell off a bit today, although they tried to stage a late afternoon rally that failed to stick.

Tech was the lead sled dog in bubbleland, with the SP 500 lagging. Pintrest has decided to join the unicorns and go IPO.

Gold and silver both backed off a short term very overbought condition.

The US Dollar rallied. The forex wiseguys love to sweep the markets back and forth to skin those who rely overmuch on leverage.

The economic news this morning was rather bad, with both Durable Goods Orders and the Philly Fed disappointing.

Until the markets and the financial system are reformed, there will be no sustainble recovery.  And given the current moral climate, and our fatal attraction to greed and power, the chances of social and polticial progress in support of reform seem a bit difficult.

Have a pleasant evening.

Stocks and Precious Metals Charts - Minutiae - Force and Fraud

"Monetary conditions exert an enormous influence on stock prices. Indeed, the monetary climate - primarily the trend in interest rates and Federal Reserve policy - is the dominant factor in determining the stock market's major direction."

Martin Zweig


"The real collapse of our currency began when it became evident that certain industrial circles were more powerful than the government."

Adam Fergusson, When Money Dies: The Nightmare of the Weimar Collapse


"A credibility trap is when the regulatory, political and/or informational functions of a society have been so thoroughly compromised by a corrupting influence and a fraud that they cannot address the situation without implicating, at least incidentally, a broad swath of their own power structure.  The broader status quo has at least tolerated the corruption and the fraud, if not having profited directly from it, and most likely continues to do so.

And so a failed policy and a fraud can become almost self-sustaining long after it is seen to have failed, and even become counterproductive, because admitting failure is not an option for those in power, and those who which to maintain their access to it."

Jesse

Unsustainable social or economic arrangements, such as an officially mispriced valuation of a market, a commodity, or even a currency for example, are backed by force and fraud. And as the fraud loses its power over time, force must increase, until there is an end in genuine reform, or eventual self-destruction.

People who have become complacent, and even a bit arrogant in their theoretical myopia, forget the need for confidence, and the interplay between full faith in a process and the acquiescence of people to common values.

It can be useful to witness a currency die first hand in order for the true nature of a monetary system to be fully understood.  Such a systemic failure strips the commonly held but essentially arbitrary assumptions about official valuations bare.  It exposes the fraud behind the force, and the force that sustains the fraud.

The FOMC minutes indicated a consensus that the unwinding of the Fed's Balance Sheet will be halted by the end of this year.

Stocks drew some encouragement from this, as contrasted with the decline and gloom with which they went into the release of the minutes.

Gold and silver gave up their gains for the most part, and the Dollar moved back to unchanged.

Physical gold has flowed out of the Comex licensed warehouses quite handily since China has returned for business.

Have a pleasant evening.