Naomi Klein on Global Neoliberalism

Yellen's Trickle Down Dilemma

Why is the economy so sluggish?

Even if real wages are stagnant, and consumers are tapped, the Banks have been saved and stand ready to loan from an abundance of freshly created money (that they can obtain for almost nothing).

Why won't consumers make a leap of faith and borrow more, betting their last assets on an indifferent Congress and an elusive recovery?  

 

It's heads we win and tails you lose for the bailout Banks. 

 

And from a Banker's perspective it probably makes sense.

 

The Reason There Has Been No Sustainable Recovery

“When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done”

John Maynard Keynes  

How can an economy based on printing money and financial repression for a broken financial system achieve self-sustaining organic growth?

Where is the growth in aggregate demand fueled by a growth in employment and an increase in median wages?

Is the great mass of the public thriving, or barely surviving?

Why do we insist on blaming and denigrating the victims of a massive and ongoing financial fraud that after six years is still largely intact?

 

There is only one thesis that needs to be nailed to this door...

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustainable recovery.

Shanghai Posts 51.5 Tonnes of Gold For the Week: How Long Can the Gold Pool Be Sustained

"For 'tis the sport to have the engineer

Hoist with his own petard: and it shall go hard

But I will delve one yard below their mines,

And blow them at the moon."

William Shakespeare, Hamlet

The Shanghai Gold Exchange, where investors actually take their bullion rather than just play liar's poker with multiple paper claims for the same ounces, saw 51.5 tonnes of gold bullion taken in the latest week.

The trend of physical deliveries has been rising the last 12 weeks.

 

To put this in perspective, if there are 32,150.75 troy ounces of gold in a metric tonne, then the Comex has a total of just under 28 tonnes of registered (deliverable) gold in all of its warehouses.  

What is that, about three days supply in Shanghai?  Not to mention the other gold bullion markets around the world.

 

Sounds more symbolic, than practical.  Well, there can be great power in symbols— until long abused belief begins to falter, and confidence frays.  And then one risks the danger of using too much force one too many times, and losing the faithful obedience of the public.  And with it everything that allows a minority to govern.

 

There are another 239 tonnes in storage in all the Comex vaults, in the proper bullion eligible format, but not listed as deliverable at these prices.  Sometimes owners feel comfortable keeping the bullion there for storage, eliminating the need to have the bullion assayed if they ever wish to sell it.

So what does this all mean?    It means that the unsustainable will not be sustained. 

 

Some day the price of gold will likely be whatever China, Russia and like minded bullion markets say it is, the paper pushers in New York and London notwithstanding.   The tangled web of free trade and globalization, ain't it a bitch? 

  

It would already be so, except for the tired efforts of Wall Street's central banking friends and their access to leasing other people's bullion in a misguided effort to influence markets and rig their prices.

 

China and the rest of the world are apparently not yet tired of buying gold on the cheap. 

 

But make no mistake: Shanghai talks, and Wall Street walks.

 

This chart from the data wrangler Nick Laird at Sharelynx.com.

 

 

Related:  How Long Can Phase II of the Gold Pool Be Sustained