Gold Daily and Silver Weekly Charts - Wooden Ships

“You cannot go on 'explaining away' for ever: you will find that you have explained explanation itself away. You cannot go on 'seeing through' things for ever. The whole point of seeing through something is to see something through it...

In a sort of ghastly simplicity we remove the organ and demand the function. We make men without chests [strong hearts for honor and truth] and expect of them virtue and enterprise.  We laugh at honour and are shocked to find traitors in our midst.”

C.S. Lewis, The Abolition of Man

There was some intraday commentary on the NAV Premiums of Precious Metals Funds here.

Gold and silver had a pop rally today out of the 1200 bound and up to the next big level of resistance, as can be seen on the chart below.

 

Silver is in a similar position, but gold seems to be leading the way this time.

If the metals break out, look for silver to get some serious legs.  But in this long bear market that is one big 'if.'

In checking some things today, I noticed that JNUG, the triple junior miners ETF, has almost doubled since Christmas Eve.  Live by beta, die by beta.

Friday is a Non-Farm Payrolls Report.  The last time the metals were smacked, they rolled them up higher, got some specs in with stops, and then just smacked them down, hard. 

 

When you are able to rig so many global markets with virtual impunity, many possibilities are open to you.  Pick a quiet hour and drop more tonnes of paper metals than a miner can produce in real bullion in a year.  Why not?  It is only money, and the Fed can print more of it.   And they would be as gods.

So, the only thing that really matters to the gold and silver bulls now is a follow through to break the bearish downtrend.   This will put some proper regards back in the Street, but we are not there yet. 

 

The political neo-cons and the economic neo-liberals are riding high, heedless, invincible, winning. 

 

What could go wrong?

Have a pleasant evening.

"The head rules the belly through the chest— the seat, as Alanus tells us, of Magnanimity, of emotions organized by trained habit into stable sentiments. The Chest-Magnanimity-Sentiment— these are the indispensable liaison officers between cerebral man and visceral man.

It may even be said that it is by this middle element that man is man: for by his intellect he is mere spirit and by his appetite mere animal. The operation of The Green Book (a book promoting relativism) and its kind is to produce what may be called Men without Chests. … A persevering devotion to truth, a nice sense of intellectual honour, cannot be long maintained without the aid of a sentiment... It is not excess of thought but defect of fertile and generous emotion that marks them out. Their heads are no bigger than the ordinary: it is the atrophy of the chest beneath that makes them seem so."

C. S. Lewis, The Abolition of Man

SP 500 and NDX Futures Daily Charts - Wash 'N Rinse, or Something Different

"Most of them became wealthy by being well connected and crooked.  And they are creating a society in which they can commit hugely damaging economic crimes with impunity, and in which only children of the wealthy have the opportunity to become successful. That’s what I have a problem with. And I think most people agree with me."

Charles Ferguson, Predator Nation

"A lot of white-collar criminals are psychopaths. But they flourish because the characteristics that define the disorder are actually valued. When they get caught, what happens? A slap on the wrist, a six-month ban from trading, and don't give us the $100 million back. I've always looked at white-collar crime as being as bad or worse than some of the physically violent crimes that are committed."

Robert Hare

Tsar Nicholas II: I know what will make them happy. They're children, and they need a Tsar! They need tradition. Not this! They're the victims of agitators. A Duma would make them bewildered and discontented. And don't tell me about London and Berlin. God save us from the mess they're in!

Count Witte: I see. So they talk, pray, march, plead, petition and what do they get? Cossacks, prison, flogging, police, spies, and now, after today, they will be shot. Is this God's will? Are these His methods? Make war on your own people? How long do you think they're going to stand there and let you shoot them? YOU ask ME who's responsible? YOU ask?

From Nikolas and Alexandra

There was intraday commentary about this opening year plunge in stocks here.

 

Let's see how the rest of January goes before drawing too many conclusions. 

 

There is not a lot of doubt in my mind that, given the current vectors, this will end badly.  But timing and forecasts are a very difficult process, best approached with a great deal of humility.

 

Have a pleasant evening.

 

 

 

What 2000, 2008 and 2015 May Have In Common

'As a dog returns to its vomit, so the fool repeats their folly.'

Proverbs 26:11

 

And they do it about every seven or eight years, it seems, in the modern economic discipline of bubblenometry.

 

What hath the Fed wrought, and the crony accomplices to Wall Street in the Administration and Congress?

Back to the brink, again.  Crouching dangers, hidden risks.

 

Margin Debt as a percent of GDP is flashing a warning sign as shown in the first chart from Cross-Currents.net.

And the second chart shows that a second indicator could be seen in the stock market performance for the first three days of trading in January, in a chart from Kimblechartingsolutions.com.

 

As the upper left corner of the second chart reminds us, these 'predictions' are forecasts, with a nod to life's school of probability. 

 

I will like to see what happens for the full month of January for a confirmation, before we start warming up the bear train for a trip downtown.   And let's not forget the bubble-making propensities of the keepers of the world's reserve currency, in the age of weaponized finance.   Triumphant exceptionalism does not wear a pauper's rags well, although it is perfectly acceptable dress for the trickle down underclass.

 

This will likely end badly, but timing is always problematic since these breakdowns most often involve a trigger event, or a black swan.  But the system is hardly robust, and so the risks are high.

 

But all in all, as George Takei would say, Oh my.

 

Related:   Margin Debt To GDP Highest in 85 Years

NAV Premiums of Certain Precious Metal Trusts and Funds - Another 30,000 Gold Ounces Redeemed

Sprott Physical Gold Trust saw about 30,000 ounces of gold bullion redeeming, with a commensurate elimination of unit shares in the exchange.  That makes it about 66,680 ounces, or 2 tonnes, redeemed at these prices since December 1, 2014.  

 

The withdrawal from Sprott Gold Trust is an indication of the mispricing of gold bullion and the tightness and leverage behind the scenes in the physical gold market.

The Sprott Physical Silver Trust's cash levels have fallen below one million. There is going to be a secondary offering to bulk up those cash levels some time this year.

While the spike in gold and silver prices today were enjoyable for those who are bullish on the metals, these sharps rises and drops are symptomatic of the highly leveraged paper pricing that is called the Comex.

And one's mind goes back to the last high, which was ruthlessly driven down by equally baseless, paper selling.

There is a Non-Farm Payrolls Report on Friday. Let's see what happens with this.