21 September 2016

Gold Daily and Silver Weekly Charts - As Old As Babel


"Every sovereign nation has the right to legislate its own debt terms, and the coming currency re-alignments and debt write-downs will be much more than mere 'haircuts.' There is no point in devaluing, unless 'to excess' – that is, by enough to actually change trade and production patterns.

That is why Franklin Roosevelt devalued the US dollar by 41% against gold in 1933, raising its official price from $20 to $35 an ounce. And to avoid raising the U.S. debt burden proportionally, he annulled the “gold clause” indexing payment of bank loans to the price of gold. This is where the political fight will occur today – over the payment of debt in currencies that are devalued."

Michael Hudson, The Coming European Debt Wars


"Whatever truths or fables you may find in a thousand books, it is all a tower of Babel, unless love holds it together."

Johann Wolfgang Von Goethe

I liked this quote from Michael Hudson today, although the beginning of the very first sentence is patently not supported by history.  Few sovereign nations have the 'right' to legislate their own debt terms to their external creditors, or even to issue their own fiat currency in any manner that they may choose without limitation, to the extent that they wish to have commerce with any other nations and groups not under their direct political control.

In this case, modern monetarists tend to conflate the power of exceptional 'force' and with the rights of any and all sovereigns.  In other words, might can make right, but only in exceptional circumstances.  A nation that is large and powerful enough certainly does have the ability to enforce some of its judgements, and not just those regarding debt and money, on the rest of the world, at least for some period of time that it is tolerated.

This is not incidental in any way, but cuts to the very heart of the matter.  Power to make arbitrary declarations of value by a central authority and have them accepted generally are the ultimate reach in political power.  This is the goal of every tyrant, every despot, and every empire, even if they do not consider themselves to be so as they justify this sort of power in their own minds.

Putting that qualification to Hudson's quote aside, and most intelligent people will agree that the power to set valuations cannot be purely arbitrary and without limit, he makes a very good observation that the devaluation of unsustainable debt loads and currencies overhangs by half measure has not been historically effective.

The Western nations, through their central banks and some of their financial dreadnought institutions, are seeking to devalue their currencies and increase the money supplies in what they consider to be a controlled manner.   And as most human endeavours seem to go, they are attempting to manage its effects and the distributions of its benefits and consequences, the rewards to those whom they favour, and the deprivations to those whom they do not.

They have been at it for some time.   This is a portion of what is called the 'currency wars.'

And to that end, they have been colluding to varying degrees over the price of gold, silver, oil, and a number of other essential, internationally traded items, including global workforce compensation and composition, in order to engineer their holy, grail, a financial solution to the problems of debt and national sovereignty within a largely unrestrained capitalist globalized financial system overseen by an 'enlightened few.'

This may seem more appropriate for Hudson to say, as I believe he adheres to more of a Marxist interpretation  of economics than I do, being largely 'unschooled' in the literal sense.   But to the close observer this does seem to be the point of the recently very fashionable system of globalisation and conforming of nations, even if by force, to a singular template of governance that certain people within the Western powers have decided is optimal for everyone.

That there is dissent from this model, even significantly so within their own society and peoples, cannot be denied.  The recent upheavals in the UK with Brexit and in the US with the national elections is unmistakable, even though the mainstream media and the courtiers to the established political class may be in firm denial.  And there is no doubt that they are, and even remarkably so.

How this ends up I have no idea.  But this does appear to be like a modern 'tower of Babel,'

I do know that they have a very hard time to admit their mistakes, and the flaws in their reasoning.  The usual response is to keep blaming the limitations of their power, and to seek to keep extending their control more and more, further and further.

They fall into what I have called 'the credibility trap.'  They cannot admit their error without impeaching their own behaviour and superiority, their right to rule as a superior person.

This latest experiment in empire building also appears to be failing for all the human reasons of pride and overreach and short term personal greed that one has come to expect from this sort of self-defined, progressively naked power grab designed to bring other people into line with a certain perspective fueled by a particularly insular form of thought.

One thing is for certain is that if you judge it by its works,  there is no love, no compassion for others, and the common good of most ordinary people, in it.  Even at its best, its seemingly high minded goals are as self-serving and self-referential as the justification used by any pillagers of a weaker people.

And gold seems to be at least one of the perennial canaries in the coal mine, again.

Well, it certainly will prove to be an interesting time for most.  Let's see what happens.

Have a pleasant evening.





SP 500 and NDX Futures Daily Charts - Come As You Are


The Fed did nothing - as expected, and is often their wont.

The soonest they will be raising rates will likely be December.

The central banks will keep feeding liquidity into a broken and corrupt financial system until it derails.

They will do everything in their power to avoid any semblance of responsibility for the collateral damage they and their friends are causing.

Janet's comments today in her press interview with regard to the Wells Fargo situation were almost incredible.  We are assured that the Fed will continue its vigilance over the Banks to insure that their system of governance and incentives will not result in bad behaviour.   And the press did not follow up on that at the least.  I don't understand how they did not break out into laughter.

Let's see if stocks have hit a high note yet, or have more room to continue higher squeezing the shorts.

What happens at that point, when the punters are all staring at each other with buy tickets in their pockets and nowhere to go may be interesting.

But thinking ahead and acting responsibility does not seem to be in the DNA of the financier class and our ruling elites. And they take many weak ones along with them.

Do not allow this cultural poison of greed and indifference to evil to infect you, so that when the time comes you will 'be rejected, though you seek the blessing with tears, but can not change what has been done.'

Winning...

Have a pleasant evening.





20 September 2016

Gold Daily and Silver Weekly Charts - Modern Monetary Madness


The precious metals are in a kind of a lockdown ahead of the FOMC meeting tomorrow.

Watching the august Senators questioning the CEO of Wells Fargo today was emetic.

Some of them talked a great game, but it was just more talk.

Keep an eye on the European Banks, especially in Germany and Italy.

The US Banks with the Fed effectively are in control, so do not worry about them.

 Rather, be concerned for yourselves and your families.

Have a pleasant evening.



SP 500 and NDX Futures Daily Charts - FOMC Tomorrow


The market is the Bank.

The Banks are the market.

The market rules the country.

FOMC tomorrow.

Have a pleasant evening.



NAV Premiums of Certain Precious Metal Trusts and Funds



Silver is still a 'bit cheap' compared to gold, but not as much as it had been with a gold/silver ratio of 68.

Interestingly the Sprott Silver premium still lags Sprott Gold.

FOMC tomorrow.  The metals are in kind of a 'lockdown.'


19 September 2016

Just Charts - All Market Eyes on the FOMC Meeting This Week


We ended up at the neurologist's office most of the afternoon and ran late with EEG testing.

All eyes are clearly on the FOMC decision on rates on Wednesday the 21st at 2 PM.

If they do nothing this week, then December is the next most likely opportunity for them to get their increase in basis points so they can lower them again when their latest asset bubble collapses.

Have a pleasant evening.