Gold Daily and Silver Weekly Charts - Option Expiry on Monday

There will be an option expiration on the Comex for the May Contract on Monday.

 

We will be rolling over from April to June next week for the front contract.

 

Gold and silver were hit today as money was somewhat desperately piling into equities.

 

I say desperately because while the Nasdaq set a new all time high, declines were leading advances, and volumes were light.  In other words, it was a selective rally in heavily weighted stocks that can move the indices, especially those that are big name tech heavy.

 

There is quite a bit of mispriced risk in the markets now. And we can certainly look no further than the Fed and the regulators when the time comes to thank someone for the bitter consequences.

 

There was new intraday commentary on neoliberalism in economics here.    It may help you to understand what is behind some of the odder policy choices and political actions being taken today.

 

There is quite a bit of big money momentum behind this neoliberal agenda.  The goal is to overturn all of the New Deal reforms and programs, and bring the world back to the late 19th century world of monopolies and robber barons.  And they are doing a good job of it.

 

They are partnering up with the so-called neo-conservatives, who were really the far left statists who became disenchanted with Stalinism and went clear around the socio-political wheel to statism of the far right.

 

What do they have in common?  They both worship power, and their religion is greed.

 

The world has been here many times before.   While the spirit of life is resilient, so is the dark impulse to try to make ourselves as gods over our fellows and the earth.

 

Have a pleasant weekend.

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - A Sick Economy and a Frankenstein Stock Market

The durable orders number, ex-transportation which means aircraft, was very poor this morning marking seven months in a row of declines. It is the trend, not the headline number, that is most important.

Stocks were off to the races, with 'tech staples' leading the charge.

The Nasdaq set a new all time high.

The VIX is at its low for this year, an area of complacency we have not seen since the beginning of last December.

If you look closely at the composition of the market, you will find that in the major indices the declines were outpacing the advances.

What this means is that the index moved higher on selective buying in certain heavily weighted stocks.

All in all, this is a good time to take profits and pare back on stock holdings. Not necessarily go short unless you are very aggressive and a short term seasoned trader, but in anticipation that the market momentum wiseguys are expecting the Fed to bail them out further at these valuations.

Or the ECB and Bank of Japan for that matter. We are in one heck of a nasty little bubble here in financial paper.

You might miss another ten percent to the upside, but the risks here make my skin crawl unless something changes. A narrowing market on light volumes with a negative Advance-Decline number. Yikes!

Have a pleasant weekend.

How Neoliberalism Survived the Financial Meltdown - 'Old As Babylon, Evil As Hell'

"Professor Philip Mirowski author of Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown, explains the intellectual history of Neo-liberalism, what Neo-liberals believe, making capitalists think differently, the role of think tanks in Neo-liberalism, the mythology of market supremacy..."

The Neo-Liberal general action pattern:

1. Create a fog of confusion about a social policy issue, its sources, and its nature.

2. Propose 'new markets' to fix the problems created by gaps or flaws in existing markets which are the language by which to define the public policy issue.

3. Build the solution as a platform to encourage phony 'entrepreneurs' to come in and expand and embed the market solution, perspective and terminology into the social structure.  Provide little to no regulatory oversight so that monopolies and predatory pricing policies protected by monopoly enrich a powerfully dominant few.

The Obama healthcare 'market' is one such example, and it is no accident that it was created by the neoliberal Heritage Foundation, before Obama made it his own.

 

Was President Obama merely being expedient in choosing such a solution?   I do not think so. I believe he is and always has been a creature of, by, and for the system and the status quo of the elite.  He aspires to be rich and powerful, and to serve he recreates himself as a brand.

 

A similar approach to the problem of stagnant economic growth and wages is to create even more new markets like the trade deals such as TPP.

 

People, plants, animals, land, happiness, work, the environment are all merely commodities to be supremely dispensed with by the gods of the markets, without interference.  Their gods price everything, but inherently value nothing, including life, love, liberty, and peace. 

 

Everything is but a transaction for the moment, without serious regard for longer term consequences or damage.  Their god is power, and their religion is greed.

 

But all the time, and this is most important, the markets that are set up are rigged by insiders of the inner temple, and are very much a part of the 'grift.'  For these are no true markets of purely rational equals, but mechanisms for transferring and accumulating wealth and power to a few.

And there is nothing wrong with markets, and market based economies, if they are honest and transparent.  But the market is soulless, and it is not an appropriate mechanism for deciding policy.   The market is a tool, not a god. And if used wisely with the proper care it can perform price discovery and capital allocation well in the right hands. But like all things, it is in the abuse of the market and the distortion of priorities that even a tool can become an instrument of disorder and abuse.

 

One of the greatest propaganda triumphs of our age is to have identified neoliberalism with 'freedom' by portraying any generally beneficial public function as a source of all evil, all difficulties because they impede the policy making action of the omniscient market, which to the people is as a god.  Instead, it is a monstrous creation, an affront to all that is human, all that is just, all that is good, that brings with it only the utmost desolation.  The madness serves only itself.

 

Like most old wickedness and folly brought forth as something new, there is nothing 'new' about Neoliberalism.  It is as old as Babylon, and evil as hell.

We think that these things take place in other times, in histories and fables, and in far off lands.  We do not see them unfolding here, playing out amongst us, in our own time and day.  But like all who have gone before and will come after, we too have been called to decide, not only in our words, but in our actions.

Do you not know, that to whom you yield yourselves as servants to obey, his servants you become, whether of a corruption unto death, or of a righteousness unto life?

 

 

Gold Daily and Silver Weekly Charts - All Quiet on the Western Front

“If not, we’ll just have to wait. We’ll pass the books on to our children, by word of mouth, and let our children wait, in turn, on the other people. A lot will be lost that way, of course. But you can't make people listen. They have to come round in their own time, wondering what happened and why the world blew up around them. But it can't last.”

Ray Bradbury, Fahrenheit 451

There was intraday commentary on the precious metals which I recommend for your reading here.

 

The trial balloons and attack on 'cash' that have appeared recently in the media are very interesting.  For once all of the cash has been eliminated, the power of the state to track, influence, and levy almost every transaction in your life becomes complete.  

 

Well meaning but badly deluded fools think that this would provide some benevolent tool, a cornucopia for the people held by a central authority.   As if this has ever been the case with such unbridled and far reaching power, ever, in history.

 

And the times, they are a-changing.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Push to the Top; Headphones On

The employment and housing numbers in the real world were not very good this morning.

But never mind that, the 'tech stock' craze is back, according to financial television.

The Nasdaq managed to match its closing high from the tech bubble today, about fifteen years ago.

Amazon,  Google, and Microsoft were reporting their earnings and revenues after the bell.

They were trading a bit mixed with some of the less massaged metrics coming in rather disappointing.

A pleasant time is guaranteed, for none but the Masters of the Universe.

Have a wonderful evening.

NAV of Certain Precious Metal Trusts and Funds - Sprott Bid For Canadian Metals Trusts

Bloomberg reports that Sprott may be planning an 'unsolicited bid' for the acquisition of the Central Gold Trust and the Silver Bullion Trust.  The planned acquisition would cut the 'trading gap' or NAV discount of the Gold Trust.

 

The market has already cut the recent discount to NAV roughly in half this morning with a rally in the price of GTU.  Markets tend towards the arc of price discovery, if sometimes more slowly, even in a climate of persistent manipulation.   And once begun, those adjustments have sometimes then come suddenly, which 'no one could have foreseen,' as we saw in the most recent financial crisis of 2007.

"Sprott Asset Management LP is planning to make an unsolicited offer to acquire Central GoldTrust and Silver Bullion Trust valued at $800 million, a person with knowledge of the matter said.

An offer at that level would reflect a 3.5 percent discount to the combined market value of the trusts at the close Wednesday of about $829 million. The proposal could come as early as Thursday, said the person, who asked not to be identified because the information is private.

The trusts, which buy and hold substantially all of their assets in respective metals in bullion and certificates, have been under pressure from investor Polar Securities Inc., the Toronto-based hedge fund. Polar has been urging the trusts to change how unitholders can redeem their investment as a means of closing their trading gaps.

Sprott aims to use its broader marketing platform and investor relations expertise to close the historic trading gap on both targets between their unit price and their net asset value, said the person familiar with the situation. Sprott projects it will add about $3.14 per unit in value to Central GoldTrust and 95 cents a unit to Silver Bullion by closing that gap, the person said.

J.C. Stefan Spicer, president and chief executive of both Central GoldTrust and Silver Bullion, declined to comment. Glen Williams, a spokesman for Sprott, declined to comment."

 

In other industry news, Bloomberg also reported that growing Swiss exports indicate that 'gold bars are leaving U.K. vaults for Switzerland, where they’re refined and sent to Asia. India and China.' Or in other words, gold is flowing from west to east.

 

Sometime recently challenged that notion of gold flowing East, as just a slogan.  Look, he said, at the mighty gold inventories on the Comex.  Yes, I have looked, and what is truly available at these prices is a rounding error on the physical markets in Asia and the Mideast. 

 

Right now, at these prices, there are a total of 567,928 ounces of registered gold available for delivery in all of the Comex warehouses.   That is a little under 18 tonnes.  The Central Gold Trust alone, a fairly modest player in the bigger scheme of things, holds 698,496 ounces of gold bullion.  It appears that Sprott is bidding to pick up all of it, and at a discount to spot.  How is that for mispricing of value?

 

And yet all of this, all of the Comex and these trusts,  this is just about what is being taken out of the Shanghai gold exchange alone each week.  And then there is India, Russia, and the Mideast.

 

The crux of this, of course, is the implied threat of the West, led by the US, to throw their own gold reserves on the table to keep the prices of bullion artificially low and 'under control.'   Really?  Throw down then, and see what happens next.  Because once that is done, there is no going back.  And the dislocation that follows may bring down more than a few bullion banks with it.

 

Someone needs to sit down with these central banking lads and give them a more realistic assessment of what price levels they can ever hope to sustain given the highly distorted dynamics of the markets which they themselves are perpetuating.   I am sure their bullion banker buddies will tell them whatever they wish to hear while the fees are flowing.

 

I suspect that the real gap here is the divergence between the physical markets and the paper markets.  And after several long years of persistent market rigging it is yawning.   You might do well to mind that gap, because it may close at some point, and that move could be sudden, and noticeable.

 

 

Gold Daily and Silver Weekly Charts - Rangebound for now

We had a few paper claims traded for gold and silver in the delivery reports.

They were moving bullion around the plate in the warehouses.

Gold and silver took a hit around 10 AM New York time and never really recovered.

There is a minor option expiration next Monday.

The next move will show us the trend, or trend change.

Have a pleasant evening.