Robert Johnson with Paul Jay: Ugly Money Politics

"The danger is that as dysfunction increases and the people subject to that dysfunction are a very, very large proportion of the population, you start to either experience social disruption or you experience what you might call authoritarian crackdown on that social disruption.

And at one level or another, it would be nice to see a political reform, what you might call a civilized tacking in a new direction, rather than a physical confrontation. But sometimes you have to have a crisis to make change. And it's not clear that the elite stewardship, whether it be corporate or individual, is sufficiently constructive right now and able to bring this, how would I say, onto a new, more healthy path without some crisis as a precipitating factor. It might be environmental, it might be social.

Often, as Bismarck used to say, when you can't solve your own problems, you go to war. I wouldn't rule that out, given the strength and the vitality of the military-industrial complex in this country. But the last two or three wars we've been involved in haven't really shown the American people much that they, how would you say, took solace from. I think warfare's changed quite a lot.

And we're at a juncture now where I think what we really need is a healthy revitalization of politics, first and foremost getting money out of politics."

The entire series is on The Real News Network.

Gold Daily and Silver Weekly Charts - When Trust and Confidence Is Lost, The Die Is Cast

"After nearly 6 years of blocking the normal development of systemic transition, a blocking caused by a flood of dollars leading to a renewed artificial global addiction to the US dollar, history is now taking its course. It isn’t as if during these six years nothing has happened.

On the one hand, the US has failed to relaunch its economy and the actual situation for Americans has only got worse, and on the other, the emerging nations have used – and contributed to creating – this 'pause' to prepare themselves for the ultimate and inevitably painful stages of completing the crisis which we are now approaching.

The Ukrainian crisis and the characteristic aggression against the legitimate interests of one of the major players in the emerging multipolar world, Russia, as well as the US’ attempted annexation of Europe, have blown the whistle for the end of the game. The whole world has thus realized that the US was on its last legs, henceforth dangerous and that it had become urgent to move on."

GEAB N°86: The Major Global Geopolitical Reconfiguration

The BRICS will be having their 2014 Summit in Brazil on July 15, 2014.

The FOMC will be meeting tomorrow.

I am a bit surprised that so little has been said about the somewhat shocking US Supreme Court decision upholding the hardball tactics of the vulture funds with regard to the sovereign debt of Argentina.  I may attempt to write something particular about this in the coming week, but let me just say that it is looking like the first lightning flash in what could become the Perfect Storm.

These things have a cumulative effect. I suspect that trust in the government in Washington is falling to historic lows in places other than Main Street USA. 

Modern money is a confidence game, a masterful combination of both fraud and force.

All things considered, US bonds looks like a rather precarious place for some people to be, especially given the noises that the Fed is making about erecting barriers to exit for those in bonds funds.  And the grants which the Supreme Court has given to the vulture funds in the Argentina debt case has the potential to trigger a series of unfortunate events, with potential repercussions.

 

Nothing of consequence happened in the Comex gold warehouses the other day.  That must mean that all is well.

 

Few will see this one coming.

Have a pleasant evening.

 

 

 

SP 500 and NDX Futures Daily Charts - Janet Janet Who Can We Turn To?

Stocks managed a bounce today on light volumes.

FOMC meeting announcement tomorrow afternoon.

Complacency reigns.

Have a pleasant evening.

 

 

 

Gold Daily and Silver Weekly Charts - The Emperor Wears Nada - Blood on the Pampas

Gold and silver pulled back a bit today after an exceptionally good week.  They were higher most of yesterday evening, if one could distract themselves from the season finale of Game of Thrones. 

I really need to go back and reread the first five books of the series.  I remember the highlights, but keep forgetting some of the details.  Its been about five years since I read them.  And Lord knows when G. R. R. Martin will get around to finishing volumes six and seven. 

Martin is a great story teller, and certainly has found his voice with this particular series.  I have read his Dunk and Egg series, which should be a good 'fix' for frustrated Martin aficionados.    But most of his other things like the science fiction were meh.  I have not read his vampire story Fevre Dream yet, which is set in the 19th century on the Mississippi River, but it did not sound inviting.  I think what is intriguing is the expanse of the world he creates in A Song of Ice and Fire, and the highly engaging details and characters.

As you know this is an FOMC meeting week, so we will have to see how well the precious metals hold their levels. I would certainly like to see silver take out 20, but that may or may not be in the cards.

 

"The Supreme Court said today it would not hear Argentina's case against hedge fund creditors, and Argentina's stock market got killed on the news.

Argentina's Merval Index, a price-weighted index designed to reflect the performance of Argentine listed companies, fell 12%."

Business Insider, Argentina's Stock Market Crashed Today

In case you missed it, the Merval stock index (Argentina) crashed today.  I mentioned it in the stock market commentary below.  This was courtesy of the US Supreme Court's refusal to hear the case that is forcing that government's hand in its dealing with some funds who refused to negotiate the debt, demanding full payment. 

 

This sets up the government for a potential default since the lower US court had ruled it could repay no debts without first settling with funds who have purchased Argentine debt and have refused to enter into the restructuring, instead demanding full payment.   The world seems to have viewed this market drop as a secular event.  I find it interesting that the US Courts have precedence here.

Some additional ounces of gold were 'stopped' on Friday, but there continues to be little movement in the Comex warehouses, which seem to be like the Hotel California. Bullion can check in but it never seems to leave.

Actually this is not all that hard to understand, if you keep in mind that the US markets are where the elite meet to cheat, and that actually BUYING bullion and taking delivery in any serious amounts happens elsewhere. What is more surprising is how the LBMA is becoming the same sort of market with the movement of precious metal action to the East.

I have almost reached the conclusion that there will be no reform until something unfortunate and unavoidable happens to wake people up.  I continue to hope not, but it does seem to be in the cards.   People are growing hungry for justice.

Perhaps we will see a Stannis Baratheon riding down the wildlings of Wall Street someday.  I am sorry to say that it rarely happens in real life as it does in fictional worlds.  Most of the time the would be savior turns out to be a betrayer, a type of Judas goat. 

But as with Jon Snow, there are quite a few who 'would like to fight for the side that fights for the living.'  And one can hope that they may eventually prevail with the right kind of encouragement and assistance.  After all, the real fight is not among the power hungry gamesters at King's Landing, but with the Night's Watch on the Wall. 

Winter is coming.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Argentine Stock Market Goes Boom

It took some doing, but over the weekend I was able to explain to an engineering friend why the US equity markets can continue to drift higher on light volumes. There is little real selling to exert downward pressure, and with liquidity in excess in all the 'right hands,' a bubble in certain classes of paper assets can easily develop, in what becomes a feedback loop.

I think the analytical mind blanches at the realities of modern finance.   And the realization that in many ways it is a con game.  How can such things take place in the holy of holies, Wall Street?

Speaking of the realities of modern finance, the FOMC will have another meeting this week. There is speculation that Old Yeller will pull back on the party, but I doubt this very much.

 

On the colonial front, the Argentine stock market (Merval) crashed over 12 percent today as the US Supreme Court refused to hear the case, thereby ruling in favor of its creditors.    The Argentine government has described these funds as 'vultures.'   That does not bode well for a quick resolution.

Have a pleasant evening.

 

 

 

Robert Johnson: How We Broke the Bank of England

This is a continuation of the Robert Johnson interview which had been posted here.

As you know, Robert Johnson is one of my favorite economic voices. He brings both theory and practical knowledge to bear on our current problems.

And he is a mature and intelligent trader who is able to speak with depth on broader social issues, which is far too often a rarity.

Great money does not ordinarily confer great wisdom and virtue on its possessors, alas, and far too often it does the contrary. This is a principle of human nature which has been recognized from at least the time that our Lord walked the earth, if not much further before that. 'It is easier for a camel to pass through the eye of a needle...'


The Real News Network

Gold Daily and Silver Weekly Charts - FOMC Next Week - Calling Dr. Strangelove

Gold and silver continued their rally off a deeply oversold condition, well within their intermediate downtrends.

There was little action in the Comex warehouses, and a few more contracts were stopped.

Next week is an FOMC meeting.

 

We may then see how the cards will fall in the short term.   For now it seems that that status quo may continue to prevail, given the nature of pricing discovery.

 

It appears the Defense Department is funding universities 'to model the dynamics, risks and tipping points for large-scale civil unrest across the world.' 

 

Sounds like it will be a busy time in the Pax Americana.

 

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - The Death of Volatility

The US equity markets ended the week on a dull note, barely able to bounce after a lower open to end the week on a correcting note.

The question will be if this is just a consolidation after a widely noted great leap upwards, or will we see a bit more action to the downside before this is over.

The FOMC will be meeting next week, and as is their wont, they may be pouring more of their oily liquidity over the troubled waters of the mispricings of risk.

As the Financial Times most recently notes in this headline, the Central Banks have used their mighty power to eradicate risk.  All gain and no pain, a world without consequences (especially for the benevolent and enlightened rulers of finance).

 As if.

This is the pinnacle of moral hazards, the triumph of the will to print money, and an impermanent plateau of illusory prosperity.

Have a pleasant evening.