SP 500 and NDX Futures Daily Charts - Burning Down the House

The economic numbers this morning were poor to fairly noisome.

 The ADP jobs added were below forecast.  Investors are watching these because of the Non-Farm Payrolls Report due on Friday, although there is a tenuous connection between those two reports, and reality.

Construction spending missed, and the ISM Index missed.

The spinoff of Paypal by eBay was exciting for a day, but Wall Street has whipped the financialisation theme like a rented mule, and it is not able to pull the markets at these levels.

BABA continues to show weakness, and there is nervous talk that the Fat Lady is named Jack Ma.

The Fed and the professional class are almost unbelievable.   Their policy errors and self-absorption have left much of the populace numb, almost in shock at their shameless recklessness and folly. 

What are they thinking?

And like the dedicated bureaucrats that they are, they keep turning back to their failed policies and broken, fictitious models.   And their masters, the overclass, are figuratively 'burning down the house.'   It is what sociopaths do.

Times are going to continue to be interesting.

Have a pleasant evening.

War On the Weak and Different: Eugenics In the US, UK, and Germany

A war on the weak and the different often takes on a bipartisan flavor, and is at its most virulent at the extremes of the right and of the left.   Ideology trumps morality.

As you may recall, many of our neo-cons came from the far left, making an almost seamless migration to the far right.

Unless one understands the nature of such extremism as being essentially statist, and antithetical to individual life, one cannot see the nature of their otherwise strange interconnectedness and convergence.

The extremes of the left and right can sometimes be kindred spirits, particularly in their disdain for the merely human, in light of the needs of the policies of the State and its models of perfection.

Why China Is the Golden Dragon In the Room That So Few Will Even Discuss

This analysis originally appeared at the USAGold website.

Why China thinks gold is the buy of the century
  by Michael J. Kosares

               

   Let's start with some big, but digestible numbers:

$3,950,000,000,000 = China’s total foreign exchange reserves

$1,250,000,000,000 = Value of the world’s 31,866 metric tonnes gold reserve at $1220/troy ounce

_________________________________________________________________________________________________________

 $1,280,000,000,000.  = China’s holdings of U.S. Treasuries in its foreign exchange reserves

 $   319,000,000,000. = Value of U.S. 8133 metric tonnes gold reserve at $1220/troy ounce

_________________________________________________________________________________________________________

Now let's delve into what those numbers might mean to the average gold owner...

When it comes to the gold market, China is the dragon in the room. With its nearly $4 trillion in foreign exchange reserves and potential purchasing power, that presence is formidable. 

How formidable?  Consider this:

- China could purchase the total United States gold reserve (8133 metric tonnes) with 8% of its foreign exchange reserves.

 

- It could purchase the total global gold reserve (31,866 metric tonnes) with 32% of its foreign exchange reserves.

- It could purchase all the gold stored by Exchange Traded Funds (+/- 1750 metric tonnes) with less than 2% of its foreign exchange reserves.

- At $4900 per troy ounce, the value of U.S. gold reserves would match China’s U.S. Treasury holdings of roughly $1.28 trillion. 

- At $4700 per troy ounce, the value of the world’s gold reserves would match China’s total foreign exchange reserves of roughly $4 trillion.

- To put it another way, China could pay double the current price for the world’s total gold reserve and still have nearly $1.5 trillion in foreign exchange reserves.

- China sits atop the list of the world’s foreign exchange holdings.

The United States ranks thirteenth at $133 billion.  For the United States to ascend to the top of the rankings, it would need to revalue its $319 billion gold reserve to almost $4 trillion – or raise the value to just under $15,300 per troy ounce...

There is quite a bit more.  You may read the entirety of Michael's very interesting analysis here.

I think someone could make a valid point that this analysis presumes that China is all that interested in buying gold.

And guess what? They are!    They are buying the hell out of it.  And they are encouraging their people to do so as well.

We just don't know yet how much they are buying, and why.  But I am sure we will find out, eventually.    In the meanwhile, no one outside the blogosphere seems to be interested in talking about it, or even admits to knowing it.

Central Banks turned net buyers of gold around 2006 after a long period as leasers and net sellers.  

 

The only countries that have not visibly gotten with the program are the core members of the Anglo-American banking cartel.  They have been conducting a fairly obvious, and often clumsy, campaign to discourage public interest in gold and silver ownership amongst their own people with varying degrees of success.  

 

There is much talk of precious metal market manipulation in New York and London.  The leverage in their opaque markets is substantial.  The Fed has stated that it could not return Germany's relatively modest amount of gold being held in custody as requested for seven years.  Apparently it has prior commitments.

 

There is some seriously weird shit going on in the silver market.   People keep connecting the dots, but no one really has the true picture.  And that is a big strike against the US markets.   You would have to be almost a fool to have any confidence in them and their 'price discovery.' 

The gold and silver story is one of the biggest developments in international monetary relationships in almost forty years, and the whole thing is going on virtually unremarked, unaudited, and unexplained.   It seems like an absolutely lame-brained, misbegotten, monumental government policy error, to try and rig the gold price against a mountain of paper.  And the wiseguys and Wall Street took the baton and ran with it, stuffing their own pockets, and getting themselves and their cohorts stuck in it rather deeply.

Sometimes one might wonder if this hasn't become one of the biggest, Goldfinger-sized, insider trades in history.  You don't need to contaminate the Western gold reserves.  All you need to do is to stealthily hypothecate them to take them out of play.  Poof.  

 

How would you like to be on the really right side of that trade, supply wise?   And how would you like to be holding the bag, on the wrong side?  

 

Never waste a crisis. Especially when you are looting a country.

 

It is hard to fully know anything about the markets in the US because they are so often given to hidden trades and misdirecting statistics.  And this is just the way the powers that be like it.

What could possibly go wrong?

 

Related:  China and the Goldfinger Syndrome

Gold Daily and Silver Weekly Charts - End of September, Hello Non-Farm Payrolls

I have included the warehouse action from yesterday in both gold and silver so we can see how things stand at the end of the month, heading into October.

Gold is flowing from West to East.  The trading action in bullion is already there.

The Comex is a quaint artifact of the era of market manipulation.  It is little more than a shell game.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Skittish

There is no recovery.

The policy errors that are driving these markets are going to take a toll.

Have a pleasant evening.

 

Gold Daily and Silver Weekly Charts - Non Farm Payrolls On Friday, End of Month Tomorrow

"Heroes. Victims. Gods and human beings.
All throwing shapes, every one of them
Convinced he's in the right, all of them glad
To repeat themselves and their every last mistake,
No matter what."

Seamus Heaney, The Cure At Troy

Today was the first position day for the October metals contracts.  First delivery will begin on Wednesday, 1 October.

China will go on a one week national holiday for 'Golden Week' on 1 October as well.

There was nothing of particular interest in the delivery reports on the Comex for Friday, and some minor movements of bullion out of their warehouses and registered categories.

We are in an endgame.  We do not know how long it will last.  But the East is buying bullion with paper money at a fairly stiff pace.   And since the financiers have not yet figured out how to create real precious metals, just fakes and frauds of them, there will be an end to it.

The malefactors may not go quietly.  They have blood on their hands, and they will carry this mark with them, forever.  They may never be discovered or held to account in this world, if that is what God wills.  They may even continue to strut about and offer their opinions and prescriptions to their victims unashamedly.  But there will be an end to it, and a final reckoning.  To think otherwise is the opium of the powerful.  They never see it coming.

The Recovery™ is a charade.   The reason for this is quite simple, and it can be seen in one chart here. 

It should be no surprise that the pig men are getting carried away.  There does not appear to be anyone to save them from themselves this time, to raise a flag and turn them at the edge of the abyss.  Who could stop, when it feels so good to be winning.

Have a pleasant evening.