Gold Daily and Silver Weekly Charts - Currency Wars

Early this morning I put out an update on the state of the currency war.  I suggest that you take a looks at this short piece which I added to the Russia gold reserve update here.

 

The metals were the same old, same old. They were hit twice in the morning, in London and then New York, and rallied into the close to gain back most of what had been lost yesterday.

The metals are largely moving sideways here, and the wiseguys are trying to shake some metal out of loose hands.

It worked a bit in gold. If you look at the delivery report showing yesterday's action, you can see that a customer of JPM let some bullion go, and JPM and Nova Scotia picked it up for their house accounts.

 

I also show the warehouses for both gold and silver below.  

 

While the actual movement of the metals is not unique compared to the recent status quo, I thought it was impressive to see the amount of physical silver being held by JPM.   While we do not know if those are for their accounts or customers, it is still noticeable.

 

As for gold, most of the Comex gold is being held by HSBC and Scotia Mocatta, although there is also a 'kilo gold only' report that I normally do not show that is dominated by Brinks.  I do not show it because the report has no registered bullion, merely kilo storage at least since they have been issuing it as a new report.

 

Larry Fink, the head fink at BlackRock, says that the best stores of wealth these days are in NY, London and Vancouver real estate, and contemporary art, rather than in gold.

 

What an obtuse observation.   NYC, London, and Vancouver real estate are in an obvious bubble, and as for contemporary art, art in general has been a good hedge against inflation in general, but is notoriously illiquid, and subject to great variances in quality and appreciation.  And art is also in a bit of a bubble.

 

So what did old Larry really say?  That there are a couple of bubbles here, likely fueled by low interest rate hot money, and it is better to pile in there at a likely top, rather than buy gold which is bottoming after a three year bear market, and is one of the more undervalued of the traditional hedges against uncertainty and risk.

 

Right on Larry.  Thank you for talking your book.  Don't let the door hit you on the way out.

 

If there wasn't a gold pool still operating, I would say that the bottom is probably in when you start hearing rubbish like this.

 

Have a pleasant evening.

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Shaky Times In Croneyland

Stocks made an early move and then gave most of it up into the afternoon.

Volumes to the upside remain light, and so are vulnerable to profit taking. My sense is that they are primarily gimmick driven.

After the bell Chipotle beat its earnings and revenue, but missed on comparable store sales. Further, they see the rest of the year growth in the single digits. While they may sound good for most stocks, for a company with Chipotle's multiples that was not enough, and the stock was selling off after hours.

Yahoo just missed everything, and the business continues to wallow, although they are doing well in the their investments like Alibaba.

 

YUM says they were hurt by the strong dollar.  They get quite a bit of their sales from China.  Their results missed expectations pretty much across the board.   However, the stock traded higher after hours by affirming its full year forecast.   Until they don't.

I think the stock market is vulnerable to a sell-off because its composition seems as substantial as meringue.

However, buying programs meet most selling and the Fed seems invested in keeping paper assets inflated for their constituency, so unless something happens to really provoke some selling volumes I think the market can keep drifting.

This is a set up for a crash IF the right trigger presents itself. And the responsibility for this is with the Fed and the other regulators who permit such a dangerous market, driven by spoof trading and hot money, to become the new normal.

 

The problem in trying to play it is that many short positions are time sensitive, and if volumes remain light one falling into the price gimmicking machine of the algos.  It is one thing to be right, and very much another thing to have the right timing.  This is why I prefer riding trends rather than the wash and rinse cycles of the wiseguys.

Have a pleasant evening.

 

 

 

Russia Adds One Million Ounces to Gold Reserves In March - Update on the Currency War

"There is a mysterious cycle in human events. To some generations much is given. Of other generations much is expected. This generation of Americans has a rendezvous with destiny."

Franklin D. Roosevelt, 1936

In the tripolar world of Europe, US, and East Asia, Russia may play a pivotal role in a fourth sphere of influence.

Europe and the US are pressing heavily on its western borders, trying to limit Russia to Western Asia.

Thus I have said that if the push for one world corporatist government under the dollar banner falters, Russia may play a pivotal role in the composition of influences and the struggle for power that will follow.

At least for now, that struggle will be played out in currencies and economics of production. Control of production and the cost of labor involved is a high priority for the multinationals. What is of a lower priority is consumption, and the settlement of consumption through an equitable international currency arrangement.

The frenzy of the US elites to pass the 'trade deals' with Asia and Europe is indicative of their concerns that the progress of their plans is reaching a critical impasse. These deals will fortify the corporatist control over North America, a prerequisite before intensifying their plans for Europe and Asia. I suspect that, when push comes to shove, Asia will be little more than Japan, Australia, and a few other client states. China will almost certainly choose its own say more fitting to its domestic situation which may become more precarious.

 

Gold is of obvious strategic importance in this struggle since it is a means of settling international payments that does not as easily fall into the financial controls of one faction or another, as is the case with a fiat currency which is, at the end of the day, an instrument of highly discretionary power.

The discussions of these topics on US media is interesting to watch.   I fully expect for the propaganda to reach ever more ridiculous levels, and for any domestic dissent to be crushed before it can gain any momentum. 

 

The differences between the Wall St. Democrats and the Corporatist Republicans will continue to become increasingly cosmetic and more factional and social than substantial, in the manner of two competing gangs seeking their own enrichment rather than elected representatives of a diverse population.  Big money is steadily disenfranchising the electorate, and the credibility trap chokes off meaningful reform.  

 

Greece may in turn become more pivotal in this struggle between the West and Europe. The difference in treatment between the people of Greece and the government of the Ukraine should be more obvious to the Western observer. The lesson is certainly not lost on the rest of the world. The US-Europe may court you, but once they entwine their fingers through your hands, you are theirs to dispose of as they please.

That is a failing of the winner's curse. They start overreaching in their belief that they will simply move from victory to victory, no matter how clumsy and brutal their tactics may become.

Gold Daily and Silver Weekly Charts - Overreach, the Graveyard of Empires

"This empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life, through the economic hit men."

John Perkins

‘Whatever happens, the [1997 Asian currency] crisis probably signaled the beginning of the end of the American empire and a shift to a tripolar world in which the United States, Europe, and East Asia simultaneously share power and compete for it.’

Chalmers Johnson, Blowback, 2004

In addition to the tripolar arrangement noted by Chalmers Johnson above, Russia will occupy a pivotal role between Asia and Europe, as well as the Mideast.  This is why I have previously identified the likelihood of three to four regional spheres of influence if or when the push for a one world government under the dollar and the central banks falters.
 

The bucket shop has been fairly quiet, at least in terms of physical activity.

 

There were some ounces of gold claimed as 'delivered' last Friday as noted on the report below. 

 

But other than that the warehouses remain quiet, with little gold flowing in or out, and silver being 'pushed around the plate.'

 

Someone corrected me to day saying that the Comex was never intended as a physical market, but as 'a means to manipulate prices.' 

 

I will take some issue with that.  The intent of the futures markets were not to manipulate prices.  They may have become that, but it is not in their original or even stated intent.  I do not see many mission statements for the CME and their minders at the CFTC admitting that our intent is to manipulate the prices of real goods in the world.

 

It is important to keep some account of what is intended, and what is a deficiency and a corruption. 

 

There can be a place for a futures market.  It has very specific hedging and risk spreading functions to perform for those who wish to use and sell particular commodities.   They facilitate the price discovery mechanism of the real markets.

 

But when the price discovery mechanism gives way to raw speculation, and the purposes of a market give way to the predations of powerful speculates who neither make nor utilize that thing productively, then the price discovery mechanism becomes broken, and the consequences for real work markets begin to build, and with time, can become almost exponential.

 

That we have allowed our markets to become broken does not mean that this is their proper function by any stretch of our modern narcissism that sees what we are as the epitome of all human progress and development.

 

Have a pleasant evening.

 

 

 

 

 

 

SP 500 and NDX Futures Daily Charts - Whistling Past the Boneyard

 

"The fact is that white-collar criminals are, in general, incredibly good at deluding themselves that they’re good people, even when they clearly aren’t."

Felix Salmon

"Sauve le voleur de la potence, et il te coupera la gorge."

French proverb

There was not much in the way of US economic news this morning.

A calendar of major macroeconomic news is included below.

Stocks were in rally mode in volumes much lighter than the selling volumes last Friday. Smells like a wash and rinse may be underway.

The big tickle du jour was the news that China might be stimulating their economy more, despite the bubble in equities.

A major Chinese developer just defaulted on their dollar denominated bonds. Who could not get enthusiastic about buying financial paper in light of that?

IBM beat its greatly and recently lowered earnings and revenues numbers after the bell. It is sad to see what IBM is becoming. I remember them as a fierce, often domineering competitor from many years ago. Now that seem to be shrinking, badly mismanaged, and rotting beneath a veneer of accounting gimmicks and spin.

How does a hardware and software big black box vendor reinvent themselves in the era of the internet and distributed computing? They have been spinning the outsourcing wheel for some time, and the latest big whoop is 'cloud computing' which is fiercely competitive and for which they do not have all that many competitive advantages.

I am thinking that, ex-seasonal hyperbole that will get adjusted out over time, the US economy was stagnant to contracting in the first quarter. It will be written off to the weather, probably with the real numbers coming out in the third iteration when no one cares any longer.

The stock market is a shell of its former self, more a wealth transfer system than a capital investment mechanism in a vibrant and growing economy.

Things will change and be reformed, but the price to be paid is now quite high.

Have a pleasant evening.

 

Analyzing Wall Street, Banks, and Big Money: A Checklist and an Example

 

"Journalism is one of the devices whereby industrial autocracy keeps its control over political democracy; it is the day-by-day, between-elections propaganda, whereby the minds of the people are kept in a state of acquiescence, so that when the crisis of an election comes, they go to the polls and cast their ballots for either one of the two candidates of their exploiters."

Upton Sinclair, The Brass Check

Rather than present someone else's analysis, here is a simple checklist for you to consider, and a few simple questions.

 

Run down the performance over the last ten years or so of the Too Big To Fail Banks and assess them for yourself.

 

Is further deregulation the answer?   Should we place even more power in the hands of the Banks themselves and then trust them to be good, or give that power to their own industry associations and instruments, including those attached to the revolving door? 

 

Is the Federal Reserve an unbiased and objective regulator fully transparent and answerable to the people before all others?

 

Does the libertarian idealism of assuming that people are all naturally good and rational, weighing long term benefits for all against personal short term gains, serve the public interest?  Is it realistic?   Is it always even real?

What results do we see from the last twenty years of overturning regulations that had stood in place since 1933?  

What sort of people do we elect?   What types of organizations are acquiring much more power, sometimes even tremendous control over healthcare, food, and the military, and with it the power of life and death?

The twenty traits assessed by the PCL-R score are:

• glib and superficial charm

• grandiose (exaggeratedly high) estimation of self

• need for constant stimulation

• pathological lying

• cunning and manipulativeness

• lack of remorse or guilt

• superficial emotional responsiveness

• callousness and lack of empathy

• parasitic lifestyle

• poor behavioral controls

• sexual promiscuity

• early behavior problems

• lack of realistic long-term goals

• impulsivity

• irresponsibility

• failure to accept responsibility for own actions

• many short-term marital relationships

• juvenile delinquency

• revocation of conditional release

• criminal versatility

Robert Hare: Psychopathy Checklist

 

  

Sovereignty?   Sovereignty is bad for business.  And so are democracy, local standards, and home rule.

"The powers of financial capitalism had another far reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole."

Carroll Quigley, Tragedy and Hope