Stocks and Precious Metals Charts - When Reality Has Been Abandoned

 

"Nearly 50 years ago, Yale University economist Robert Triffin identified the inevitable future deterioration of the dollar in his book, Gold and the Dollar Crisis: The Future of Convertibility (1960). Essentially, Triffin argued, under the Bretton Woods system in which the U.S. dollar was the world’s principal reserve currency (instead of gold, for example), the United States had to incur large trade deficits in order to provide the rest of the world with the liquidity required for functioning of the global trading system.

Unfortunately, Triffin wrote, U.S. trade deficits eventually would undermine the foreign exchange value of the dollar because foreign accounts would hold an increasing quantity of dollars. Restating Triffin's argument in contemporary terms, as the proportion of dollar claims held abroad versus U.S. gross domestic product (GDP) increases, the foreign exchange value of the dollar must decline if dollar interest rates do not increase at about the same rate as the foreign dollar claims.

Issuing the reserve currency gives domestic policy makers an advantage by making it easier to finance either domestic budget deficits or foreign trade deficits because there always is a ready bidders' market for any financing instruments from that issuer. Issuing the reserve currency enables the domestic population to consume more goods and services from whatever source than otherwise would be feasible. And issuing the reserve currency gives foreign policy officials of that nation the upper hand in determining multilateral approaches to either diplomacy or military action.

This last reason probably is why U.S. policy makers clung to the original Bretton Woods format for about 10 years beyond the point at which it still was viable, with the whole apparatus finally collapsing in August 1971."

Walker Todd, Triffin’s Dilemma, Reserve Currencies, and Gold, AEIR October 2010

Jesse: Gold and silver became interesting for the first time in the 1990’s, when I started to study the history of speculation and stock market crashes, and the rise and fall of bubbles. This led to a fairly serious study of the nature of money. Up to about 1999, I had no interest in gold and silver. What I saw happening in the world economy then sparked my interest in that subject.
     I write about gold and silver now because they are at the heart of what is happening. I am fascinated by the sea change in the world monetary system, which has been colloquially called ‘the currency wars.’

L.S.: Will those ‘currency wars’ intensify going forward according to your analysis, and if so, how do you think they will play out?
Jesse: Yes they will intensify and we are seeing that already. A fiat currency is an exercise in both confidence and power. As confidence weakens, the use of power must intensify to maintain it.

L.S.: If you were calling the shots, what would you do to solve the crisis?
Jesse: I obviously cannot address that in any reasonable amount of words, except to say that the influence of big money on the political process is the root of much evil.  At one time we had a thesis and antithesis in the political debate.  But now that the ruling class has found out that they may become quite rich by acquiescing to certain things, and that there are few consequences for what one may do in that pursuit, the outcome is fairly predictable. We have to bring back consequences, transparency, and the rule of law.

Jesse with German journalist Lars Schall, All Out Defense of the Status Quo, The Matterhorn Interview September/October 2013

"From top to bottom of the ladder, greed is aroused without knowing where to find a comfortable foothold. Nothing can calm it, since its goal is far beyond all it can attain. Reality seems valueless by comparison with the dreams of fevered imaginations; reality is therefore abandoned."

Robert J. Bausch, Thoughts On the Business of Life, NY Times, 2002


To abandon reality one must give themselves over to lawlessness.   And having lost a firm anchor to  reality founded in independent laws and principles, the slide into delusion and madness is almost inevitable. 

Despite a very strong wave of paper selling, gold found a footing and managed to post yet another strong gain and new high.

Silver struggled a bit but is holding strong.

The Dollar continued to slide.

Stocks initially sold off, but managed to pull together and stage a rally in the quiet of the afternoon.

There will be a Non-Farm Payrolls report on Friday.

It may move the markets.

I cannot stress enough that geopolitical events are going to be weighing heavily on the financial markets, sooner rather than later.  

The recklessness of a childishly selfish, shockingly arrogant few are going to be the catalysts for a  potentially highly destructive outbreak of renewed conflict. 

They have no shame or fear, and have convinced themselves that there will be no judgement or consequences.   This is the fruits of sustained moral hazard. 

We are in a period of elevated, and highly mispriced risk.

Do not be deceived.  For God is not mocked.  What a man sows, so shall he reap.

Have a pleasant evening. 

Stocks and Precious Metals Charts - Blindness Over Gaza

 

"Unhappy people are better off living in the city. A person can live in the city for a hundred years and not even realize that they are already dead and rotting. They don't have time to realize this on their own; they are always busy."

Leo Tolstoy, The Kreutzer Sonata, 1889

"To see a world in a grain of sand
And a heaven in a wild flower,
Hold infinity in the palm of your hand
And eternity in an hour.

A robin redbreast in a cage
Puts all Heaven in a rage.
A dove house filled with doves and pigeons
Shudders Hell through all its regions.
A dog starved at his master's gate
Predicts the ruin of the state.

The whore and gambler, by the state
Licensed, build that nation's fate.
The harlot's cry from street to street,
Shall weave Old England's winding sheet.
The winner's shout, the loser's curse,
Dance before dead England's hearse."

William Blake, Auguries of Innocence, 1863

“Above all, don't lie to yourself. The man who lies to himself and listens to his own lie comes to a point that he cannot distinguish the truth within him, or around him, and so loses all respect for himself and for others. And having no respect he ceases to love.”

Fyodor Dostoevsky, The Brothers Karamazov, 1880

“As though you could use violent, unjust means and achieve peace and justice!  Means determine ends; and must be like the ends proposed.  Means intrinsically different from the ends proposed achieve ends like themselves, not like those they were meant to achieve.”

Aldous Huxley, Eyeless in Gaza, 1963

Stocks did a fairly impressive 'wash and rinse' today, as the pumping up of the futures in anticipation of a grand meeting of colonial powers to announce a peace acceptable to vultures, failed to cohere.

Every time they open their mouths the foul stench of death and corruption wrapped in lies comes out.  And it fools no one anymore.

This market is overextended and on unstable footings.  Try not to get in front of it, because these things can drag on, especially with official sanction and support of powerful insiders who are in the process of looting.

Gold and silver, spotting the brazen falseness and hypocrisy of the markets continued to soar to new records, as investors sought safer havens for their wealth.

China is going to be on holiday for the rest of this week, so we may see some opportunities for mischief.

But, the momentum for now is fairly clear.  Let's see if they can keep it up.

VIX ticked higher.

The Dollar slid off the 98 handle.

With the DXY index bias to the euro, I would say gold is a much better barometer of fiat currency weakness and strength.

The US is engaged in some provocation in South America, perhaps in preparation for obtaining their oil when the next strike in the Mideast occurs and all hell breaks loose, and the straits of Hormuz are closed.

I sincerely hope that I am wrong, and stand with those who so far resisted the appeal of the madness.

But it seems as those the tides of the fourth turning are flowing strongly, and the heart of darkness will have its way, at least for some time.

As economist Robert Johnson noted, 'the oligarchy is audacious.'   And as the fraud fades, more force is required, until all will be revealed by the bluntness of the iron fist. 

Keep your eye on the prize, and remain standing in the light and life of the Lord. 

Have a pleasant evening.

Weekend Meditation - The Awful Hand of God

 

"They live out their days in prosperity, and slide peacefully down into hell."

Job 21:13

“There was a certain rich man who was splendidly clothed in purple and fine linen, and who lived each day in luxury.  At his gate lay a poor man named Lazarus, who was covered with sores.  As Lazarus lay there longing for scraps from the rich man’s table, the dogs would come and lick his sores.

Finally, the poor man died and was carried by the angels to be with Abraham.  The rich man also died and was buried, and his soul went to the place of the dead.  There, in torment, he saw Abraham in the far distance with Lazarus at his side.

The rich man shouted, ‘Father Abraham, have some pity!  Send Lazarus over here to dip the tip of his finger in water and cool my tongue.  I am in anguish in these flames.’  But Abraham said to him, ‘My son, remember that during your lifetime you had everything you wanted, and Lazarus had nothing.  So now he is here being comforted, and you are in anguish.  And there is a great chasm separating us.  No one can cross over to you from here, and no one can cross over to us from there.’

Then the rich man said, ‘Please, Father Abraham, at least send him to my father’s home.  For I have five brothers, and I want him to warn them so they don’t end up in this place of torment.’  But Abraham said, ‘Moses and the prophets have warned them. Your brothers can read what they wrote.’

The rich man replied, ‘No, Father Abraham! But if someone is sent to them from the dead, then they will repent of their sins and turn to God.’  But Abraham said, ‘If they won’t listen to Moses and the prophets, they will not be persuaded, even if someone rises from the dead.’”

Luke 16:19-31

The sin of the rich man in the parable of Lazarus was not that he had been given great wealth, even though has no gratitude, and thinks that it is all because of his own merits.  No, his sin is that his pride made him blind to the suffering of Lazarus, who sat every day on his doorstep.  He saw, but did not care.

It was in the torment of the abyss that the rich man's eyes were opened.  Looking across the great chasm he finally sees Lazarus and holy Abraham.  And the first thing that the rich man does is to beg for favors and comfort for himself. 

He feels no shame, no repentance, never once saying that he is sorry.  Even as his eyes were opened, his heart remained hardened in the grip of his greed.  His sins are the chasm that separates him from salvation.  He holds himself apart from the abundant grace of God.

Nations that have been blessed can blind themselves to the misuse of their power and good fortune, given to them by God, to oppress and subjugate others, and please their greed and vanity.  They exalt themselves as the greatest good, the exceptional— even as they oppress and plunder and murder.  Until at long last God breaks the backbone of their power, and with chastisements humbles them.

One has come back from the dead and spoken to us, we who oppress the weak and murder the prophets. 

'The more secret God's hand is, the more powerful — the more silent, the more awful.'   And you will see the hand of God, chastening the powerful, and bringing low those who murder his sheep.

“I am going to shock the ears of all who hear. I will bring forth the things that I have proclaimed.  I will judge their house because they knew their sons have made themselves contemptible to me, and they did not try to restrain them.”

1 Samuel 3:11-13

God will not remain silent.  And when his hand moves, the proud and the powerful will fall, and the servants of the beast will rage against it.

Look to their downfall, and repent.

Stocks and Precious Metals Charts - Stand Fast in this Dark and Deceitful World

 

Hear, creator of heaven,
what the poet asks.
May your mercy
softly come to me.
So I call out to you,
for you have created me.
I am your servant,
and you are my Lord.

God, I call on you
to heal me.
Remember me, gentle one,
we need you above all.
Drive out anger,
generous and great,
and every human sorrow
from our heart.

Watch over me, my Savior,
we need you above all,
truly through every moment
to stand fast,
in the wide world of men.
Send us, son of the virgin,
noble motives,
all grace comes from you,
to my heart.

Heyr himna smiður, Icelandic Hymn

"The great angel's voice sounded serious and sad. 'They didn't recognize Him.  Few knew who He was.  Most loved their own darkness more than His light, and in the end, they killed Him.'

'Why are they so foolish, blind, and deaf?" asked the little angel angrily.

'None of us angels — not even you or I — know why they did such evil.  It is not for us to judge what they deserve or don't deserve.  But the fact remains that they killed our King when He was a man and walked among them.

We must not judge them.  We who live in the glory of heaven have no idea what it is like to live in darkness.  Every day of our lives we hear His voice and the heavenly music like rushing waters, but for them — there is so much darkness, noise and confusion on the earth.  Only a few who are humble, wise and still in their hearts hear His voice.  But now pay attention.  You are about to see something wonderful.'

And then, as the earth continued to rotate, many little lights spread out.  Some would only light up briefly and then go off again.  But most continued to burn evenly.  As they looked further, they saw that a glowing light had spread over many parts of the earth.

'The glowing lights are His followers that He left behind; men and women who, with His help, continue to spread the light on the earth.  And now many little lights are beginning to shine all over the world.  Sometimes it's a great pain to observe the Earth, and sometimes it's unspeakable joy.  The end hasn't come yet.  But now you surely understand why this little globe is so important.  He has visited it.  He will carry out His plan for this Earth.  Although I don't understand it. I will never forget that this is the planet that was visited.'"

J. B. Phillips, Ansichten eines Engels


It was a risk on market today, and stocks went out on their highs.

VIX dropped sharply below its 50 DMA.

The Dollar declined back down to the edge of the 98 handle.

Gold and silver turned in a strong performance, with silver surging higher, crushing the shorts.

Bitcoin edged lower.  Again this is surprising given the tech stock strength.

I still think this market is an accident waiting to happen.  The setup is eerily similar to the 2000-01 stock bubble. 

I try not to get discouraged, but it seems like the rule of law is falling by the wayside.

Most of the UN delegates walked out today, as Netanyahu came to speak at the podium.   He is threatening all the countries that have recognized the state of Palestine.    

I went out and got my flu, Covid, and shingles vaccinations today.  I already have a current RSV and TDAP, yada yada.  

I have been keeping up my vaccinations since the 90's when I was traveling regularly overseas, at times to lesser developed nations, and used to get my medical kits and checkups from the corporate physicians. 

My son went with some friends to Iceland for their grand New Year's eve celebrations some years ago.  They sell fireworks for local charities by the truckload, and everyone sets them off at midnight.  It was something to see. 

He is on his way to China now, to reunite with his bride and her family.  I would have liked to have gone, but I am on Daisy watching duty.  The poor little thing is a bundle of medical issues, but still manages to bully me quite effectively.    

People can be just nuts.  Try not to let them bring you down.  Stand fast, and keep your eyes on the prize.

You can't reason with crazy.  But that doesn't mean you have to join in.

Have a pleasant weekend.