US Total Public and Private Debt As a Percent of GDP from 1916 to Present

"The bold effort the present bank (Second National Bank of the US) had made to control government, the distress it has wantonly produced...are but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it."

Andrew Jackson


"What a crazy time we live in. Domestic politics have devolved into an ongoing hostage crisis in which the opposition party threatens to blow up the financial universe every six months or so, and the leading political minds in the country can't figure out how to keep this from being a permanent feature of our budgetary process.

Meanwhile, global monetary policy is drifting in the direction of semi-permanent stimulus, and no one has any idea how it all ends. It's two different runaway-freight-train action movies going on at the same time. God help us."

Matt Taibbi, The Mad Science of the National Debt

Chart courtesy of Ralph Dillon at Global Financial Data.

Gold Daily and Silver Weekly Charts - Coiling, Coiling... - They Shoot Gold On Friday's Don't They?

Gold and silver popped higher this morning as weak to bad economic news persuaded the markets that Zimbabwe Ben will not taper his wick anytime soon.

GDP for Q1 was revised downwards to 2.4% which was a miss.

Unemployment claims came in at a whopping 354,000 and continuing claims remained stubbornly high at 2,986,000.

And finally pending home sales came in very light at 0.3% versus 1.5% expected.

In Ben Bizarro world, bad news is good, because that means the Fed will keep oozing its sweet monetary sugar to the one percent.

And so the metals rallied, because the smart money knows that the jig is up, despite the histrionics that seek to persuade us otherwise.

Still the small specs are staying out.  I was speaking to some traders today and they think silver is going lower to test 18 and won't step in until then. 

When and if gold breaks the downtrend, they will become frantic and start bidding up gold and silver, after they cover their shorts.  But let us rather wait for this.

When will it break the downtrend? A major failure to deliver would certainly do it. lol.

When it is perceived to have done so on the charts, we will know.  I am not so sure even moving back into the long sideways consolidation is going to do it.  We need a higher high and higher low on the intermediate chart quite badly to turn the sentiment around. 

For now, even after this little bounce of the last two days, all is still gloom.

Singapore Gold Premiums Hit Record High on Tight Supply - Reuters

SP 500 and NDX Futures Daily Charts - Mr. Bubble Goes Sideways

The economic news was rather poor this morning.

Stocks remained resilient, although they are largely moving sideways form the past five days.

Are equities getting ahead of themselves?  This chart below suggests that this may be the case.

Don't Be Fooled, Economic Recovery Is Not Real - Guardian UK

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds - Brown's Bottom

The prices are higher, sans exubérance.

I have not seen the gold and silver crowd so gloomy since about 2000-2001 when the consensus was that gold was 'dead money.'

And of course we know that this marked the bottom of around $250 per ounce. 

I was not watching gold at the time. I was watching the big triple top in the dollar, and the antics in the equity markets, and wondering what was going on.

That time was marked by the selling of Britain's gold reserves allegedly to bail out the bullion banks it is said, which has since become known as Brown's Bottom.

The disconnect between reality and the financial markets seems quite vividly to resemble the tech and housing bubbles, when the markets were marked by a pronounced mispricing of risk, and rampant bad behavior and white collar theft of assets.  These things can go on for some time.

What does one call a negative bubble, a time when prices are pushed artificially lower, in order to use overvalued paper to pick up productive real assets on the cheap?

I thought Russia's proposal to the G20 for more transparency in the global raw materials markets was interesting, although the G20 have pulled the original press release from its web site.  Are we seeing some discord in the emerging global oligarchy?  One can only hope.

I could not help but notice that there was no press release, and not even one word, that came out of the meeting of the G20 in Istanbul over the 'reinventing of Bretton Woods.'    The principals who are in charge of communication will not even acknowledge emails.  But the G7 finance ministers called an emergency meeting for the following weekend, which also released very little news except that they were exploring ways to mitigate the corruption in the financial industry.

You can fool some of the people all of the time, and all of the people some of the time, but you can not fool all of the people all of the time.

And some of those people have enough power to resist you when you inevitably resort to more than persuasive means. And this is the great flaw in Modern Monetary Theory, whether it is debt based or Treasury based.  People rarely govern themselves wisely, much less oversee the wealth of others when it can be so easily taken, especially when there is a lack of transparency and accountability.  It matter little how one rolls when the system itself is corrupt.

The banal chatter and triumphalism of the economists is quite discouraging, as once again they willfully miss what is happening all around them.   A few are raising their voices, somewhat timidly, but the most of them are all too willing to go along to get along, or to safely lose themselves in triviata of their fallen profession.