Stocks and Precious Metals Charts - Full Faith and Credit

 

You may be reading more and more commentary about the platinum coin solution, and arguments why it doesn't really matter if the US does it or not.

To summarize the concept, the Treasury creates one special platinum coin, with a stated face value of $500 billion [Now a trillion they say] or so.

They trot down to the Fed and deposit the special coin(s), redeeming that amount of US notes and voila. It is an overt monetization [of debt], but the platinum coin adds a novel touch, and a bit of shiny misdirection...

But what people forget, or rather, what they would like us to forget, is that a modern fiat currency is based on the full faith and credit of the issuer, and the willingness of people in the market place to trust them, their word as contract, and the integrity of their actions.

Trust is a funny thing. One can bend it, twist it, and strain it by their actions over time. But at some point it may break.

And trust is gone, broken.  And retracing one's steps to regain it is not a simple matter of a apologizing for and remediating their latest transgression, but a long slow climb back through what in many cases are years of continuing abuse and broken promises.

It is good to note that when dealing with people's resistance to accepting this monetization and artificiality of value, the MMTers quickly resort to arguments that involve the use of force, legal but even physical, in order to stifle dissent to an arbitrary monetary power.

That is the significance of taking the step of overt monetization at will, which is what the gimmicky platinum coin solution is all about.  And those who promote it best understand that this is what they are doing, and be prepared for the consequences.

Jesse, Platinum Coin: Crossing the Monetary Rubicon, , 6 January 2013


Joe Weisenthal (pro) and Michael McKee (con) were discussing the 'trillion dollar platinum coin' solution to a debt ceiling impasse this afternoon on Bloomberg.

It's a goofy idea promoted around the time of the occasional 'debt limit' brinkmanship that occurs when the GOP has control of the House.  I think of it as goofiness fighting goofiness.

The real solution is to eliminate this 'debt ceiling' completely, since it is dealing with programs that have already been passed by the House.   It is a political circus wagon.  An alternative to real legislation wielded by those who prefer hostage-taking and fear-mongering to thoughtful work.

The House always has the option of trying to limit programs through legislation.  But that requires discussion and measured thinking, which is not an enhancement to demagoguery. 

"The demagogue is one who preaches doctrines he knows to be untrue to men he knows to be idiots."

H. L. Mencken

And the Democrats have the ability to try and change things when they are in control of both houses, but they never do it seems.  Everyone likes a good circus to keep the people distracted.  And not every servant to the corporate and moneyed interests is as obvious as some.

Perhaps this is why some others are always cheerleading and promoting almost unthinkable wars every few years. 

War is a racket.  It's good for a few, and a tragedy to most.

It's old as Babylon, and evil as sin.

So stocks rallied today.  

Gold and silver took the usual volatility ride after an option expiration.

VIX fell.

The Dollar edged just a little.

FOMC and Non-Farm Payrolls this week.

Have a pleasant weekend.

Stocks and Precious Metals Charts - Out of Darkness - What a Coincidence

 

“Whatever has been said in the dark will be heard in the light, and what has been whispered in private will be proclaimed from the rooftops."

Luke 12:2-3

"The descent to hell is easy, and those who begin by worshiping power, soon worship evil."

C. S. Lewis

"Do you not yet see and understand?  Are your hearts that hardened?   Having eyes do you not see, and having ears do you not hear?  Don't you remember anything?"

Mark 8:17-18

"The word of God is a living thing, and works among us.   It is sharper than a double-edged sword, and penetrates even to the dividing of soul and spirit, the joints and the marrow; it judges the innermost thoughts and inclinations of every heart.   Nothing in all of creation is hidden from the sight of the Lord. Everything is uncovered and laid bare before the eyes of Him to whom we must some day give an account."

Hebrews 4:12-13

"Their souls are so empty, so shallow, so broken and insubstantial, that when stripped of their earthly husks there will not be enough of them left to be recognizable as a personality.  They look like the remnants of dried brown leaves, blowing along the gutters and alleyways of a hard and unyielding hell.   No one remembers them, or even know what they are.  And no one hears them, their dry scratching cries, and they are alone.   It is hard to even think of it again, much less imagine falling into that state.  And yet, that is not the worst that I saw."

Jesse, About the Poor and Taxes, 25 July 2012

"For we wrestle not against flesh and blood, but against principalities and powers, against the rulers of the darkness of this world, against spiritual wickedness in high places."

Ephesians 6:12

Stocks managed to rally today and go out near the highs.

Today was the precious metals option expiration on the Comex.

 Gold and silver took a bear raid in the chops, but managed to take some back into the close.

What a coincidence.

Let's see if the wiseguys have another gut check in them.

Chinese New Year Spring Festival formally lasts a week, but the holiday often stretches out to February 15th, as measured by factory and office closings.

We will have an FOMC decision and Non-Farm payrolls next week.

More coincidences on deck.

Have a pleasant evening.

Stocks and Precious Metals Charts - On the Road to Damascus - Metals Option Expiration Tomorrow

 

"Those to whom one of these blows has happened— after which they struggle on the ground like a half-crushed worm—have no words to express what has happened to them.  Among the people they meet, even those who have suffered much, those who have never had contact with affliction have no idea what it is.  

Then one day God comes to manifest Himself to them and reveals the beauty of the world, like God did in the case of Job.  But if the soul ceases to love, it falls into something here below that is nearly equivalent to hell."

Simone Weil, The Love of God and Affliction

"God whispers to us in our pleasures, speaks in our conscience, but shouts in our pains: it is his megaphone to rouse a deaf world.”

C. S. Lewis

"It is better to find God on the threshold of despair than to risk our lives in a complacency that has never felt the need of forgiveness."

Thomas Merton

"And therefore mine own good daughter, never trouble thy mind for anything that ever shall happen me in this world.  Nothing can come but what God wills.  And I make me very sure that whatsoever that be, it shall indeed be the best."

Thomas More, letter to his daughter Margaret from prison

“Man has places in his heart which do not yet exist— and into them enters suffering, in order that they may have life.”

Léon Bloy


Stocks turned in another dipsy-doodle day, with stocks plunging lower from the open, but returning to positive on the SP 500 and only slighly lower on the NDX.

Same day wash and rinse.  How modern.

Gold and silver moved higher, while the Dollar slid a little lower again.

Tomorrow will be an option expiration on the Comex for gold and silver.

Often we get a secondary gut check after the expiry, perhaps on Friday, for those lucky few whose in the money calls are exchanged for active futures contracts.

VIX continued to drift lower.  

We are so exceptional!

Have a pleasant evening.