Gold Daily and Silver Weekly Charts - When the Bubble Bursts

"The hypocrite's crime is that he bears false witness against himself. What makes it so plausible to assume that hypocrisy is the vice of vices is that integrity can indeed exist under the cover of all other vices except this one.

Only crime and the criminal, it is true, confront us with the perplexity of radical evil; but only the hypocrite is really rotten to the core."

Hannah Arendt

Gold and silver showed weakness during the London-New York trading hours today.

I suspect that we *could* see a bit of an overhang on price this week as the punters go for the sure thing of a decline in the metals for the upcoming Non-Farm Payrolls report this week.

Gee, I hope they don't get whipsawed. LOL

There was a remarkable amount of gold deliveries on Friday as you can see below, all things considered for recent history in this metals slump.

As usual we saw JP Morgan, and this time the house at Goldman, snuffling up those claim tickets on gold.

I was out for a while this afternoon, but this spent most of this morning working on an update on the amount of free float of gold in the London vaults.    The real work is being done by the same metals mavens and data wranglers at BullionStar and GoldChartsRUs.  

I am proofreading and trying to make the data easier to comprehend, and maybe a little 'pretty.'   I imagine that if I can understand it, then most others will as well.

I think you all know what I think about this.   There seems to be little doubt that there is a large amount of leverage with paper claims compared to unencumbered physical bullion, both in gold and silver, but especially with gold.

We have seen various estimates and data points in the 100:1 area for London and New York, and I think that there is some merit in those.

And as Kyle Bass was told with regard to gold, the trading system as it is now relies on only a very small percentage, about 2% of contracts held by traders, actually cashing in their gold claims in each contract period.

"The [gold] exchange is a fractional reserve exchange, and they think that price will solve everything."

Kyle Bass

If there is another financial disruption and there is a rush for physical gold for any reason, please be advised that there will be a very unequal distribution of the metal that actually exists.   And they will solve the imbalances by dictating price settlements that will likely not involve any physical assets going forward.

We saw this clearly in the case of MF Global.   And it is likely to happen again, and on a much grander scale.  It would be like having your insurance policy cashed in and settled for cash against your will on the day before the big storm hits and knocks your house down.

'And no one could have seen it coming.'

Could the mainstream corporate media make their biases any more obvious about their election preferences?   The news programs are starting to be more like infomercials.

Non-Farm Payrolls at the end of the week.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Quiet Trading Day On Rosh Hashana

“In poor countries, officials receive explicit bribes; in D.C. they get the sophisticated, implicit, unspoken promise to work for large corporations.”

Nassim Taleb, The Bed of Procrustes

Trading was quiet in New York today as a number of traders were off today for the Jewish holiday of Rosh Hashana.

Despite the lack of substantive follow up on the Deutsche Bank settlement rumours banks managed to bounce back a bit.

The markets were also cheered by 'better than expected' auto sales.   Better than the Wall Street analysts estimated that is, but year-over-year decline.

Non-farm payrolls and the Fed will likely dominate the trade this week, with any of the several floating crisis points like Deutsche Bank shuffled to the 'Mispriced Risks' bin.

Interestingly, an analyst from JPM has endorsed the idea that the Fed should start buying stocks to prop up the equity market.

Have a pleasant evening.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Report Next Week - Zimbabwe Express

"The mischief springs from the power which the moneyed interest derives from a paper currency which they are able to control, from the multitude of corporations with exclusive privileges which they have succeeded in obtaining in the different States, and which are employed altogether for their benefit; and unless you become more watchful in your States and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given or bartered away, and the control over your dearest interests has passed into the hands of these corporations."

Andrew Jackson, Farewell Address

The only funadmental in this market right now is fraud.

Gold gave up a little bit and silver gained some to close out the week.

The delivery reports for October are now coming in, and gold was off to a bang as Nova Scotia served up bullion markers for all those standing for delivery. Silver was relatively quiet.

Recovery Is Arriving On the Zimbabwe Express

Larry Summers thinks that it is time for more governments to start propping up their stock markets more overtly by the outright buying of stocks on a regular basis.  But he did somewhat ominously admit that

"we are fairly near the end of the rope. Perhaps there is scope to reduce short-term interest rates a little bit more and to make them a little bit more negative. But there is not much scope.”

He also went on to observe that: "In a world where cutting-edge technology companies are awash with excess cash, it can hardly be a surprise that there is substantial downwards pressure on the level of real interest rates. Low neutral rates will be around “for a long time to come,” requiring policy makers to think more dynamically.

I had a chill run up my spine when the thought of President Hillary bringing him back into government again.  Heavens to the downward-spiral-of-elitist-new-era-thinking.

No wonder economics is a disgraced profession.  Some of its biggest and brightest stars are so conflicted by selfish interests and blinded by ideology that they could not formulate sustainable policy for a glee club.

Non-Farm Payrolls next week as noted in the economic calendar below.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Jawboning Prosperity, For Some

Stocks rallied on a report that had been given from some source to the French wire service Agence France-Presse that Deutsche Bank was expecting to reach a settlement with the US Department of Justice of about $5.4 billion, considerably less than the $14 billion that the DoJ had been asking.

Favourable rumours notwithstanding, the US equity markets are surprisingly weak.

Their underpinnings bear little substance of firm and committed investment, which is a roundabout way of saying that they are in a bit of a bubble fueled by very short term speculation and price manipulation.

Therefore, one might expect that just about any significant exogenous event is going to bring this market to its knees. A failure at Deutsche Bank would certainly do the trick. But there are a number of other things that would also do serious harm to a fragile market structure based on hot money and fraud.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Shocking, Positively Shocking

There was a whiff of more serious concern in the markets this afternoon.

Word leaked out in a news story that some of the hedge funds doing derivatives clearing with Deutsche Bank were pulling out the cash from their accounts.

The implications of this were obvious immediately to most. And risk assets sold off.

Gold and silver are still coiling under some market pressure from the usual suspects, loco London, New York, and Washington DC.

When the time comes for the metals to break free it may happen overnight from a shock in the financial markets.

My son missed the train crash in Hoboken this morning by ten minutes. Never so glad to have him answer the phone promptly.

God's tender mercies.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Should I Stay Or Should I Go

The indecisive markets took a bit of a plunge today when a news story reported that hedge funds using Deutsche Bank for derivatives clearing were pulling the excess cash out of their accounts.

The implications were that these insiders felt concerned about a disruption in access to their cash, and/or a greater threat of a 'bail-in' at the troubled bank.

Otherwise the risk factors still seem fairly calm, if not a bit cocky, on Wall Street.

Let's see if they can keep a hold on this asset bubble. Last one out the door gets scorched if they cannot.

Have a pleasant evening.