Gold Daily and Silver Weekly Charts - Post Stock Option Expiration Rally

Gold and even the somewhat hapless silver managed to pull together a modest rally today, after the stock market option expiration we saw last Friday.

The miners and associated precious metals plays had been beaten with an ugly stick.

So what next?

We have a Comex option expiration for the precious netals next Tuesday for the November contracts. I have included a little data from the deliveries in gold, which were a bit more than one would expect for an inactive month. And there continue to be some steady withdrawals from the gold and silver warehouses. In particular silver is flying out of Scotia it seems.

There was intraday commentary about the purchasing of gold bullion in Russia and China.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Shooting Shorts in a Barrel

The wiseguys decided to try and 'take it up' to squeeze the lazy shorts who were overstaying their positions.  As one trader said, 'it is like shooting fish in a barrel.'

There was steady buying on relaxed volume for much of the day in the futures.

Not much in the way of economic data this week.

Have a pleasant evening.

The American Dream By Joe the Angry Hawaiian

This is from the Big Island.  The natives seem restless.

"Democracy in a free market capitalistic society today only exists in the imaginations of sleep-walkers in the American Dream. The idea of honest, hard work being suitably rewarded has become a mind-numbing slogan that is now just beginning to wear off in the minds of some Americans.

While Americans were working and playing hard, our representational democracy has evolved into a political system that has been completely and utterly bought by the moneyed interests, and is now a protection racket for their accumulation of wealth and advantageous positions of power and influence. We live in a land where untaxed off-shored wealth is ignored, and the whole tax system has been customized to suit their personal needs.

We live in a fictitious land where multi-national corporations are legally given Frankenstein-like status as a red-blooded American, and their money has become their vocal chords. Politicians, while posturing that they are working for the people, are nothing but lobbyists for the rich, which most of them are, or assured to be upon leaving office to be rewarded with speaking fees, or think tank positions by their powerful benefactors.

This unreal, and unjust dream-land is kept alive by obscuring smoke and brightly lit mirrors of the mass media that is completely controlled by a relatively few corporate interests. Combined with idealized statistics provided by the government we have been lulled into an illusion that is both numbing and dumbing. To realize there is even a problem, attention spans must be able to last for longer than a 60 second advertisement.

The hard rock reality of the great American experiment is being felt by most everyone with a wallet or purse. The financial system is run by the un-Federal Reserve Banks. The privately owned US Central Bank gives money which they make out of thin air to the boys who run the biggest Banks for less than .25%. As the statistics reveal, this money rarely goes far from the hands of the rich. Their fingers grasp this money so tightly that the so called trickle is now a mere tiny dribble that seeps slowly to those below.

The US dollar is a fiat money con-game sustained by the illusion of American exceptionalism. This confidence in America as a moral force for good has been destroyed by its self-serving hypocrisy, its torture, the poor performance of its political drama queens, and endless wars without end. But things are changing. No longer can the US declare an economic embargo that brings countries to their knees, especially since the US itself is up to it's myopic third eye in debt.

I believe the problem that we will be facing soon enough is not the economic imbalance of the rich and poor in this country. This unequal lopsidedness can be maintained for many years, especially with a militarized police force.

The real problem is those beyond the reach of the system like Russia and China and the rest of the BRICS. When they decide that they have had enough of our self-serving antics, and renounce the US dollar as the world currency, then folks, that's when we have a problem.

Until then nothing changes, since most members of our society can't even remember there is problem or what caused it.

Lower Gold Prices Prompt Large BRIC Purchases

Apparently those lower gold prices proved attractive to the BRICS.

Not all the economic theorems are utopian myths.  Supply and Demand still works now and then.

There was a sea change in the international gold markets around 2005, as central banks became net buyers for the first time in over twenty years, and few even know about it.

Russia saw it's largest monthly purchase of gold in 15 years with 1.2 million ounces

 

Yes, these things are happening. 

 

And yes, most media people are not speaking about them, or pull a cloak of obfuscation and misdirection over them.    The media does not help the people, it handles the people.

 

China's had its third largest flows of gold bullion from Shanghai at 68.4 tonnes after it's week long holiday. And there is a similar story for India, except there the people are buying and the government sahibs would like to resist with import fees.    Or maybe they just simply cannot.

Gold at these prices is steadily flowing from West to East. What is not sustainable will not be sustained. There will be a reckoning, and a revaluation.

It would be better for the world if the would be financial engineers and central planners allow it to be gradual, rather than precipitous. Otherwise the gold leasing window will some day be slammed shut, and gold will go into a highly disruptive backwardation.

Then they will be carrying traders and even whole firms out on stretchers, along with the credibility and reputations of quite a few economists, analysts, regulators, and politicians.

These charts are from the data wrangler Nick Laird at Sharelynx.com.

Related:  China's Physical Gold Market Is On Fire

 

The Age of Narcissism

"Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity.

The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those whom they oppress."

Chris Hedges

We will always come across such personalities.  But there are some times, in some cultures, where such character traits may become not only more accepted, but socially incented, rewarded, and even fashionable.  

I think this is an important subject, because the current fiat culture in the United States has a strong element of collective and individual narcissism, expressed in the role models it upholds, the people who rise to great power, and in general, a feeling of historical and global exceptionalism that dare not be questioned.

We may do as we wish, because of who we are. This is our century. And if others object, they either have no right to do so, or are merely acting out of fear and jealousy of our greatness.

 

Hallmarks of Narcissism

 A pervasive pattern of grandiosity (in fantasy or behavior), need for admiration, and lack of empathy, beginning by early adulthood and present in a variety of contexts, as indicated by five (or more) of the following:

 

•Lacks empathy - is unwilling to recognize or identify with the feelings and needs of others

•Has a grandiose sense of self-importance (e.g., exaggerates achievements and talents, expects to be recognized as superior without commensurate achievements)

•Has a sense of entitlement, i.e., unreasonable expectations of especially favorable treatment or automatic compliance with his or her expectations

•Is interpersonally exploitative, i.e., takes advantage of others to achieve his or her own ends

•Is often envious of others or believes others are envious of him or her

•Requires excessive admiration

•Shows arrogant, haughty behaviors or attitudes

•Believes that he or she is "special" and unique and can only be understood by, or should associate with, other special or high-status people (or institutions)

•Is preoccupied with fantasies of unlimited success, power, brilliance, beauty, or ideal love

Frank Ochberg is one of my favorite modern psychologists. His primary area is PTSD. But his insights on a variety of topics is often insightful.

 

'Confidence' Is a Corollary In a Fiat Culture: The Triumph of the Shills

"When the political process becomes controlled by multi-national corporate interests, the US government becomes a tool of those interests. When multi-national corporations own the mass media as they presently do, honest democratic debate becomes unlikely.

As we witness corporate power becoming a dominate force in international relationships, it will surely continue to diminish independent national sovereignty under the banner of 'free trade.'"

Joseph A.

Economists are fretting about the current notion that the US is caught in a secular stagnation.  They are concerned because they believe that this is what is driving stock prices lower.  And lower stock market prices are upsetting to their masters.

 

 They are concerned that people are believing in stagnation as a sort of urban myth, and that makes it real.  Seriously.  Belief is not an effect, but a primary cause in their minds. 

The biggest myth that I know of is that confidence alone, no matter whether it is founded in fundamental reality, is enough to ensure a permanent plateau of financial asset growth.  If we believe something, it is.  No matter whether reality reflects it or not.

It is the corollary to the fiat culture that holds that if they say it, and we believe it, then that is enough.   They maintain their power to decide, and this is their real end.  Not accomplishments, not solutions for others, but the maintaining of their status quo. 

And so the Fed and the ruling elite will say whatever is needed to be said, whether it makes any sense or not, and paint pictures with their words and statistics, to make the people believe. If they believe, they will buy, using increasing levels of debt if needed.

Animal spiritism is the cargo cult approach to a financial recovery. If only we believe, then everything will be all right, and we can live in the Potemkin villages that we build with a debt that can never be repaid.

Or as Fernando said, 'It doesn't matter if you feel good, you only need to look good, and baby, we look marvelous.'

Confidence is not a crutch, not a substitute for fundamental growth. It is a spark, and it cannot burn the wet wood of a stagnant or declining real median wage. Just because some fools can believe something does not make it true, even in the Humpty Dumpty world of our pampered princes.

Related:

  Washington Post Insists Economic Inequality Is a Oversimplified Fiction

  Shiller: When aStock Market Theory Is Contagious