Central Banking Chronicles Continued - Multimedia Q&A

 

Q. What is it like to pursue a career as a central banker?  

“A cross between a foreign legion boot-camp and a secret-society initiation ritual, the ordeals were grounded in pain.  One thing was obvious: the agenda, which was dedicated to grave discomfort, had been drawn up by a passionate sadist... quite as unpleasant as wearing a pair of briefs which have been trailed through a Calcutta courtyard...

The pursuit of illusion is not about studying for prizes, or for study's sake. There's no right or wrong, no pass or fail...  

Nothing is what it seems."

Tahir Shah, Sorcerer's Apprentice

 

Q. What is it exactly that Central Bankers do?  How do they preside over the real economy?

 

An imperial central banker explains to a simple, honourable man.

 

 

Q. Does the Central Bank ever audit their custodial gold bullion vaults in response to another Central Bank's request?

Q. The Central Bank has a broad array of monetary policy tools to use in managing the growth of the real economy. Can you give us one example?

Q. Do Central Banks ever engage in task sharing, or employ consultants or specialists?

The IMF is sometimes used for their expertise in negotiating the terms of sovereign bailout packages.

Gold Daily and Silver Weekly Charts - Auguries of Innocence

"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.

Every night and every morn

Some to misery are born,

Every morn and every night

Some are born to sweet delight.

Some are born to sweet delight,

Some are born to endless night.

We are led to believe a lie

When we see not through the eye,

Which was born in a night to perish in a night,

When the soul slept in beams of light.

God appears, and God is light,

To those poor souls who dwell in night;

But does a human form display

To those who dwell in realms of day."

William Blake

Gold and silver bounced back a bit today after that pre-meditated smashing that they took last Friday coincident with the Non-Farm Payrolls report.

I cannot stress this enough. China, Russia, England and the US are playing a game of strategy, a global 'game of thrones' if you will.

England and the US especially are playing the short game, the smash and grab. Russia and especially China are playing a longer game, if you will.

 

Riddle me this.  If you were planning on a future with an international currency system that is based on a type of money that is difficult for a single entity to manipulate for their own ends, would you rather be a debtor or a creditor?

 

And further, if you were in a situation in which you saw no other interest but your own, and you were threatened with a loss of the control your personal pleasure and power as you will, what might you be willing to do to retain it?

But in many cases, there are no differences among them, the elite.  They are merely faced with different problems and assumptions.  And their styles may differ, greatly.

 

Some of the differences are due to a cultural bias. Whereas Chinese and Russian thinkers are likely to play chess and 圍棋 or 'go' their Western equivalents are more focused on games involving direct assault and concentration relying less on strategy and more on power.

 

Surprisingly, the West is somewhat lacking in empathy.  Not kindness, although there is precious little of that these days.  Rather, we tend to consider 'the others' as spoiled or insufficient replicas of ourselves, as our inferiors.  So we tend to greatly underestimate them. 

 

And unfortunately the cult of power has persuaded many 'leaders' that obedience is a loyalty to which they are entitled.  So they too often tend to underestimate the willingness of their own people to endure their excesses.

I am sure the West has just as many capable and intellectually proficient strategic thinkers as does the East. The difference is that here they are on the political sidelines, working finance, or otherwise ignored.

This is setting up to be a much more interesting event than I had ever imagined it would be.

As an aside, you may do well to limit your exposure to the Euro as well as most equities for the short term here. We are entering a rather fluid situation in Europe, with repercussions that are difficult to discern for all the Western nations.

There is a movement to pre-emptively disband the Euro from several sources, and those who wish to continue to hold it together are rapidly losing ground. Will such a change be unequivocally good for the Dollar? I believe some think so. I am not so sure.

 

The global financial system is very interconnected, and still rather fragile in the States despite the enormous effort that the Fed and the government have placed on reforming leverage and excessive speculation out of the financial system. (NOT! LOL)

Have a pleasant evening.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Once More Into the Breach

"You never know what is enough unless you know what is more than enough."

William Blake

Stocks were unable to take out the overhead resistance on the SP 500 continuous contract futures which is fairly well established around 2055-2060.

This was the third or fourth try, depending on how you wish to account a two phased attempt in mid-January.

I think the bulls have one more serious shot at taking it up and over, or we are likely to go down and test a firmer support level, say around 2025 or so.

I suspect that geopolitical developments are weighing on the US domestic game of liar's poker that is the equity market.  Despite the usual self-sufficient exceptionalism bravado.

Have a pleasant evening.

 

 

 

NAV Premiums of Precious Metals Trusts and Funds - Pleasant Cycles of Financialisation

"By the middle of the stage of financial capitalism, however, the organization of financial capitalism had evolved to a highly sophisticated level of security (paper asset) promotion and speculation which did not require any productive investment as a basis.

Corporations were built upon corporations in the form of holding companies, so that securities were issued in huge quantities, bringing profitable fees and commissions to financial capitalists without any increase in economic production whatever.

Indeed, these financial capitalists discovered that they could not only make killings out of the issuing of such securities, they could also make killings out of the bankruptcy of such corporations, through the fees and commissions of reorganization.

A very pleasant cycle of flotation, bankruptcy, flotation, bankruptcy began to be practiced by these financial capitalists. The more excessive the flotation, the greater the profits, and the more imminent the bankruptcy."

Carroll Quigley, Tragedy and Hope

More Central Banker Questions

Q.  Why is there no real recovery, and little to no reform?  Why are the same old policy errors being replicated again and again?  Why are we seeing the creation of yet another paper asset bubble without a robust growth in the middle class?

A.  Because the moneyed interests are still in control, and they like things just as they are.  This is a pleasant repetitive cycle of accumulation for the one percent. 

 

Not only are the Banks not bearing the losses from their speculation, but their gambling is subsidized by the creation of money and the rules of taxation on the profits, and their losses are transferred back to the victims.

Why would anyone wish to change it, who is motivated by a fairly narrowly interested, almost pathological, desire for the personal accumulation of wealth and power?

Since when are sociopaths reasonably expected to be self-effacing, altruistic, and rationally self-regulating?

At the very heart of self-destructive evil is the inability to say 'enough.'   I have enough power, money, land, sex, control, pleasure, wealth, admirers, etc.

If this type of obsession was not present to some extent in the human genome, history would not be littered with autocrats, dictators, and despots. 

 

Alas, the untempered bent of history on a large scale is not to create egalitarian democracies where each person lives like an angel, but the excessive and destructive creations of autocrats, oppressions, and tyrannies.

US Equities: Rich Valuations, Insiders Selling

Stocks seem to be rather fully valued in expectations of The Recovery™.

Happy days are here again.

For some.

 

Central Banker's Joke

 

Q.  How many monetary policy errors does it take to destroy the world's greatest middle class?

 

A.  How many do you need?

 

Gold Daily and Silver Weekly Charts - And That Was the Non-Farm Payrolls Report

"One may safely say that it would be no sin if statesmen learned enough of history to realise that no system, which implies control of society by privilege seekers, has ever ended in any other way than collapse."

William E. Dodd, US Ambassador, Address to the American Chamber of Commerce in Berlin, 1933

“Our pundits and experts, at least those with prominent public platforms, are courtiers. We are captivated by the hollow stagecraft of political theater as we are ruthlessly stripped of power. It is smoke and mirrors, tricks and con games, and the purpose behind it is deception...

A culture that does not grasp the vital interplay between morality and power, which mistakes management techniques for wisdom, and fails to understand that the measure of a civilization is its compassion, not its speed or ability to consume, condemns itself to death.”

Chris Hedges, Empire of Illusion: The End of Literacy and the Triumph of Spectacle

"People only see what they are prepared to see."

Ralph Waldo Emerson

Could they get any more blatant and careless in just hitting the market with massive sell orders to drive down the price?  It's a great way to collect on short positions on the miners among other things, as some joker noted on bubblevision today.

Careless as in not having a care, because they do what they want and no one will call them on it.

I would not trade gold and silver futures on the Comex in this environment. I rode some pretty hairy markets in the early 2000's, and enjoyed aggressively trading the stock futures.

 

 But based on what I see now I think the rules and regulation have become so captured by a few big players that it just makes no sense for even a seasoned investor to get near them.  But that is what I am doing for myself. You can make up your own mind.

The Non-Farm Payrolls report was 'better than expected.' It caught a lot of analysts off balance because it was the net result of a pretty profound revision of the numbers going back at least a year. I won't say much more than that for now, since I have not had the time to sit down with a spreadsheet and see what was actually done.

But if the Fed wanted cover to change their wording in March, and then hike a bit in June to give themselves some cushion for lowering rates after their later experiment in policy error blows up (again), then I think they have it.

It is pretty obvious that the Fed is making public policy by default. The default of course is their willingness to use their self-funding ability, taking the gains they make from creating money and trading in sovereign debt for their expenses, and returning the leftovers to the Treasury.

 

The Fed is stepping into an obvious policy vacuum that has been created by a corrupt and servile Congress and Executive who have lost the will and the ability to govern, which has now become more of a pastime to their own posturing and looting. 

So we will sit back quite a bit over the next few weeks and wait to see what the philosopher kings at the Fed decide to do, with the unfolding freak show of the Congress as backdrop. Americans love to ignore international developments, but the Ukraine and Greece will continue to weigh on the financials.

And as always, lest you forget, we are in a currency war. And when the going gets tough, the privileged cheat, steal, and lie.

I said several times we might see some antics in the metals today, and what we got was 'a message.' I think these jokers are getting nervous, and when the pampered princes get nervous they tend to lash out.

Putin was meeting with Hollande and Merkel in Moscow, and the US/UK are concerned that they will negotiate a separate deal with Russia and not maintain their 'Nato unified front.' 

And of course there is Greece. A small people seem to be standing up to the moneyed interests and are saying 'enough.'  And those who are in pursuit of global empire want that movement contained.

That sort of thing can give other people ideas. As President Snow said in the Hunger Games:

“Hope. It is the only thing stronger than fear. A little hope is effective, a lot of hope is dangerous. A spark is fine, as long as it’s contained. So, contain it.”

Have a pleasant weekend.