Financial System Awash With Liquidity That Is Not Reaching the People in the Real Economy

"The velocity of money is the frequency at which one unit of currency is used to purchase domestically-produced goods and services within a given time period.

In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. If the velocity of money is increasing, then more transactions are occurring between individuals in an economy."

St. Louis Fed


"Most of them became wealthy by being well connected and crooked. And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation


"If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time."

Simon Johnson, The Quiet Coup

In other words, what we may be seeing here is a declining 'bang for the buck' or 'the law of diminishing returns' for the massive amounts of liquidity which the Fed has been selectively applying to the financial system using quantitative easing.

How can this be happening?

Does adding even more quantitative easing work?  Work for whom?

The 'recoveries' or sparks of real economic activity are growing fainter, and shorter, while the subsequent declines are continuing in length and depth.

One can hardly see the 'jumps' in velocity between the long plunges driven by helicopter drops from the Fed to the one percent, leaving the real economy and the broader public further and further behind.

At what point does the fallacy of endless money printing without consequence begin to 'bite?'

One might fear that the Fed is continuing to add fuel into and around a vehicle that is stuck in a ditch and wrapped around a telephone pole.

And all the elite financiers and their sock puppet politicians can seemingly do is to keep pouring on the gas.

There is a currency war going on.  It's perhaps unintended but very real objective is the subjugation of whole peoples, including the domestic public, to a financial and political elite.
It is the child of unrestrained greed and the concentration of power into fewer hands through through the unscrupulous manipulation of money and credit.

Although it may drape itself and its wars in the flag and pious patriotism, in a very real sense it is nationless and raceless.  

This is an audacious oligarchy that serves only their own greed and self-interest for power and money.

Gold Daily and Silver Weekly Charts - Respect

"Most of them became wealthy by being well connected and crooked. And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation


“They were careless people, Tom and Daisy—they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together, and let other people clean up the mess they had made.”

F. Scott Fitzgerald, The Great Gatsby


"The wealth of another region excites their greed; and if it is weak, their lust for power as well. Nothing from the rising to the setting of the sun is enough for them. Among all others only they are compelled to attack the poor as well as the rich.

Robbery, rape, and slaughter they falsely call empire; and where they make a desert, they call it peace."

Tacitus, Agricola

Gold and silver were marking time today ahead of the Non-Farm Payrolls Report tomorrow.

It is remarkable, and surprising if you did not know how they think, how little the politicos and the professional class of the Anglo-American elite understand their own cultures and people, especially outside of the NY-Washington metroplex.

Not to mention their abysmal ignorance of and carelessness with the rest of the world when it gets in the way of their selfish desires.

People want respect. And they are not getting it.

You cannot keep giving people no choice, and expect them to keep taking it with a downcast eye and a smile.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Rangebound Until Non-Farm Payrolls

The markets got what they expected from the Bank of England this morning,  with a 25 basis point cut, and an expansion of QE to include corporate debt.

If the financial system was not corrupt and broken this might mean something.  Alas, it is not, so it does not, except for more of the same kind of corporate debt expansion to buy back stocks, boost payouts to the one percent, and build monopolies.

So stocks continued to wind around within a relatively narrow range that has held good for the past 19 trading days.

Tomorrow we get the US Non-Farm Payrolls. An outlier either way *could* shake things up a bit.

Let's see what happens.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Hang On

These markets are certainly seeming to be winding up for a move.

That goes for most markets, and not just the precious metals.

This week we have an eye on the Non-Farm Payrolls Report, but also on the policy announcement from the Bank of England.

Let's see what happens.

Gold deliveries keep moving along, but the activity in the warehouses is sleepy.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - The Calm Before the Storm

Stocks are continuing to move in a fairly tight trading range as you can best see on the SP 500 futures chart below.

I believe that it has been 18 trading days since we have seen more than a one percent closing move in stocks.

Some suggest that this is due to 'tinkering' in the markets by central banks since the Brexit announcement.

Speaking of Brexit, in addition to the non-farm payrolls report on Friday, the markets, especially the forex markets, will be looking at the policy announcement this week from the Bank of England.

Still waters typically run deep, but this market is shallow. So I expect rougher waters ahead.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Dollar Down a Bit, Metals Up

'There are more things in heaven and earth, Horatio,
Than are dreamt of in your philosophy.'

William Shakespeare, Hamlet, Act 1 Scene 5


'The only function of economic forecasting is to make astrology look respectable.'

John Kenneth Galbraith


"Doing nothing while going through the motions of doing something perfectly defines the Securities and Exchange Commission."

Pam and Russ Martens, Rigged Markets Show Signs of a Desperate Slumlord

Gold and silver managed to add a little to their recent gains, as risk began to creep back into the internal judgements of traders, who were taking a little of their recent extended gains in riskier assets off the table.

The dollar gave up a bit as well today.   The correlations between asset classes are rarely pure and constant in the short term.

And in the longer term, they often elude the academic mind as well.  Hence today's intraday commentary about a very serious paper about gold from the Royal Economic Society.

We should be getting some economic news tomorrow that will open the door towards forward thinking about the Non-Farm Payrolls report on Friday.  Two or three days ahead is about as far as these markets are able to go these days.

After all, besides the fact that most of it is just spoofing the average holding times of positions seem to be lasting less than a day, with a half life that sometimes seems to be measured in seconds.

There continued to be outsides 'deliveries' for gold on the Comex, as noted in the box scores below.  Although it should be noted from the warehouse reports that very little of it seems to be going anywhere, except to be shoved around the dice table by the shills and the house.

Have a pleasant evening.