A longtime friend/colleague of mine sent me a note tonight in which he said he thought something significant might be coming to light about gold in the next week or two. There’s certainly some unusual behavior on the Comex, with Goldman taking delivery of 98,300 ounces last week (2.8 tonnes), the amount of gold cleared on the LBMA at the a.m. fix spiked up from an average of about 100,000 ozs per day to over 150,000 ounces, the Shanghai Gold Exchange saw the 4th largest withdrawal of gold in its history and the premiums on both physical gold and silver rose considerably.
It’s anyone’s guess what might be going on, but China is certainly accumulating an increasing amount of the Wall Street Journal’s “Pet Rock.” And the Chinese seem to be unloading a massive amount of dollars/Treasuries. ...
Click through for the full post. And be sure to grab his RSS feed.
After just three days of market turmoil the monetary politburo swung into action. This time they sent out B-Dud to promise still another monetary sweetener. Said the head of the New York Fed,
“From my perspective, at this moment, the decision to begin the normalization process at the September FOMC meeting seems less compelling to me than it was a few weeks ago.”.
Needless to say, “B-Dud” is a moniker implying extreme disrespect, and Bill Dudley deserves every bit of it. He is a crony capitalist fool and one of the Fed ring-leaders prosecuting a relentless, savage war on savers. Its only purpose is to keep carry trade speculators gorged with free funding in the money markets and to bloat the profits of Wall Street strip-mining operations, like that of his former employer, Goldman Sachs.
August 28 (King World News) – Is China’s surprise move to weaken its currency a step towards market reform or does it presage a widespread series of “race to the bottom” devaluations reminiscent of the Great Depression? China joins the Swiss National Bank (SNB) who earlier this year let the Swiss franc float freely to protect its exports….
Click through for the rest. It's an interesting thought. China is certainly one of the few countries that attempts to set long term goals. Perhaps they see themselves becoming the new fulcrum that the world rests upon.
China’s government resumed its intervention in the stock market on Thursday and has been cutting holdings of U.S. Treasuries this month to support the yuan, according to people familiar with the matter. Authorities want to stabilize equities before a Sept. 3 military parade celebrating the 70th anniversary of the World War II victory over Japan, said two of the people, who asked not to be identified because the move wasn’t publicly announced. Treasury sales allow policy makers to raise dollars needed to bolster the yuan after a shock devaluation two weeks ago, according to different people familiar with the matter.
Click through for the video. But if the gov in China is intervening, doesn't that mean things are really bad? And that everything is being pumped up when there really isn't support for market prices? The whole global economy looks more and more like a giant farce to me.
It is important to get a balanced perspective on the global financial market actions in the last few days because we tend to be emotional when such volatility happens. First, the Shanghai Stock Exchange has been treated as a casino where investments are expected to yield short-term trading gains [with government backing]. When China moved to float the Yuan the ripple set off global reactions. Government stepped in to try to show its support even allowing Pension funds to invest in the market [they have yet to do so]. In backing off support for the equity market, China removed support for short-term traders.
Please note the Shanghai exchange does not impact the Chinese economy but it is a side market that is not taken as seriously as it is in the developed world. Far more important is the capital liberalizing process at Municipal level where capital injections do reach the overall economy. ...
There are no markets anymore – only interventions. – Chris Powell, Treasurer of GATA
Markets are supposed to act as information transmission mechanisms, with asset prices reflecting all of the fundamental information that goes into the process of “price discovery.” But when Central Banks and Governments interfere – or intervene – in markets, it completely disrupts the information transmission, price discovery function of markets.
If Central Banks and Governments interfere with markets, there’s no reason to even have markets and it becomes completely useful to participate in financial markets in any capacity, unless of course you have access to the inside information connected to the market intervention ...
It’s getting downright hazardous out there, and not just because the robo-machines were slamming the “sell” key today. The real danger comes from the loose assemblage of official institutions which claim to be running the world.
They might better be referred to as “can kickers united.” It is now blindingly obvious that they have lapsed into empty ritualism, contrivance and double-talk in the face of a global economy and financial system that is becoming more unstable and incendiary by the day.
Who in their right mind would pile $95 billion of new debt on the busted remnants of Greece? Likewise, how can Japan possibly consider enacting still another round of fiscal stimulus, as did Prime Minister Abe’s chief advisor recently, when it already has one quadrillion yen of debt? And what geniuses are trying to fix the bankrupt finances of China’s local governments by swapping trillions of crushing bank loans for equivalent mountains of new municipal bonds?
The world's most powerful central bank is relying on a novelty tune to maintain the hyper-speculative status quo.
Back in the Roaring 1920s, a novelty song entitled Yes! We Have No Bananas (1923) was a major hit. The song made fun of a fruit vendor who answered "yes" to every query--even when he didn't have the requested item--for example, bananas. Today, in the Roaring Teens, the Federal Reserve has their own novelty tune:yes, we have no rate hikes.
By Gerald Celente of Trends Research Institute August 19 – (King World News) – History is repeating itself. While the times are different and the names have changed, the underlying circumstances and basic fundamentals remains the same. The Crash of ’29, The Great Depression, plunging commodity prices, currency wars, trade wars, world war. Now, four score and six years later: The Panic of ’08, The Great Recession plunging commodity prices, currency wars….
In the past, the topic of “backwardation” has come up and I’ve tried to write about and simplify understanding it. We now have backwardation deeper and further out than anything we’ve seen in the past so it’s time again to visit this anomaly.
What is “backwardation”. This is a situation in the futures markets where a product or contract’s spot (current) price is higher than a future price (ie next month, 6 months or even 1 year in the future). First, backwardation is very possible in many different commodities simply because of the timing of harvests for example in agriculture products. For example, it makes sense a bushel of wheat might be more expensive in the middle of February as opposed to July-Sept. because this is when (in the U.S.) the harvest is done and the product is more plentiful. If the supply is more plentiful, it follows (in the “old normal”) that price should be softer. Also, some sort of natural event can occur such as floods, drought, wildfires etc. which impact harvest or current supply. In this instance, backwardation is perfectly normal and logical.
In gold and silver however, backwardation should never happen, not for one second or even one penny. This is because gold and silver are produced around the globe 24/7, it is not a seasonal business in other words. Also, there is “theoretically always” above ground stock (vaulted metal ect.) to meet demand. Gold nor silver should ever be worth more today than it is worth contractually a month from now. ...
Click through for the rest. It's an interesting read.
I often tell investors to follow the money, which currently is cheap to borrow. Cheap money is good for stock prices, but not for retired folks who have most of their savings in term deposits with low interest yields.
Most important for commodity investors is the powerful correlation between China’s money supply and commodity prices. The money supply peaked in 2011 and has been falling along with commodity prices.
The tremors rattling markets are not exactly what they seem to be. A meme prevails that these movements represent a kind of financial peristalsis - regular wavelike workings of eternal progress toward an epic more of everything, especially profits! You can forget the supposedly “normal” cycles of the techno-industrial arrangement, which means, in particular, the business cycle of the standard economics textbooks. Those cycle are dying.
They’re dying because there really are Limits to Growth and we are now solidly in grips of those limits. Only we can’t recognize the way it is expressing itself, especially in political terms. What’s afoot is a not “recession” but a permanent contraction of what has been normal for a little over two hundred years. There is not going to be more of everything, especially profits, and the stock buyback orgy that has animated the corporate executive suites will be recognized shortly for what it is: an assest-stripping operation.
August 30 (King World News) – John Ing: “I am focused on the ramifications of the Chinese devaluation. There is a lot of misinformation about this move but the reality and the point of the exercise is a product of the ongoing race to the bottom as far as currencies. All of this is a result of unprecedented worldwide quantitative easing and liquidity….
China has bungled its attempt to slow the economy gently and is sliding into “imminent recession”, threatening to take the world with it over coming months, Citigroup has warned. Willem Buiter, the bank’s chief economist, said the country needs a major blast of fiscal spending financed by outright "helicopter" money from the bank to avert a deepening crisis. Speaking on a panel at the Council of Foreign Relations in New York, Mr Buiter said the dollar will “go through the roof” if the US Federal Reserve lifts interest rates this year, compounding the crisis for emerging markets. Professor Zhiwu Chen from Yale University told the same event that China will be doing well if it can contain its slow-motion crisis to mere stagnation for the next 10 years, given the dangerous levels of debt in the system. “If the Chinese government is able to manage a Lost Decade with very low growth - or no growth - without an economic crisis, it will be a policy achievement,” he said. Prof Chen said a Western-style financial collapse in China is ...
If you can't work for yourself and afford health insurance, something is seriously messed up. By financial independence, I don't mean an inherited trust fund--I mean earning an independent living as a self-employed person. Sure, it's nice if you chose the right parents and inherited a fortune. But even without the inherited fortune, financial independence via self-employment has always been an integral part of the American Dream. Indeed, it could be argued that financial independence is the American Dream because it gives us the freedom to say Take This Job And Shove It (Johnny Paycheck). This chart shows the self-employed as a percentage of those with jobs (all nonfarm employees). According to the FRED data base, there are 142 million employed and 9.4 million self-employed. (This does not include the incorporated self-employed, typically physicians, attorneys, engineers, architects etc. who are employees of their own corporations.)
Yes, most definitely, something is messed up. Click through for the full article.
Two weeks back I asked the question whether or not the “Final War” had started, between the EAST AND WEST. I was called a number of politically incorrect names for suggesting the Tianjin explosion might have been an “attack” and took even more heat,… because I included the word “nuclear”. Since then there have been many theories as to what happened, some of them pretty far fetched. Yesterday another article was published in Veterans Today, http://www.veteranstoday.com/2015/08/25/confirmation-tianjin-was-nuked/ which scientifically suggests the explosion was in fact “nuclear.” I am inquiring as to whether the science used as proof is in fact sound. In the meantime, I would like to hear from readers why or why not the science used in this article is correct or is not. Please do not send me “opinion” or tell me Veterans Today is a poor source. Please specifically attack the science!
I would like to use the Tianjin explosion as a mid point in my review of what happened before and since the tragic event. Prior to the Tianjin explosion, China announced they had accumulated 600 more tons of gold over the last 6 years. On the face of it; this number is clearly bogus as China mines 400 tons per year and none of this product leaves their border for export. I termed this 600 tons….a “polite number”. Seemingly, the number was enough to demand a place at the IMF table but not enough to be a threat to the “sacrosanct” 8,133 tons the U.S. claims. This was followed almost immediately by the IMF announcing it would review China’s inclusion in the SDR in another 9 months. Just two days later China began a series of three yuan devaluations, on day two the Tianjin explosion occurred.
Take your pick--here's three good reasons to engineer a "crash" that benefits the few at the expense of the many. There is an almost touching faith that markets are rigged when they loft higher, but unrigged when they crash. Who's to say this crash isn't rigged? A few things about this "crash" (11% decline from all time highs now qualifies as a "crash") don't pass the sniff test.
Click through for the full post. He's not the only one thinking this way.
This is one of the best documentaries on the Crash of 1929 if you wish to get a feel for the times. You may find it interesting to watch the whole thing below.
I have posted the entire documentary twice before: once, on the 80th anniversary of Black Thursday in 2009, and once before in December of 2007.
I remember the Summer of 1929 being described as unusually hot, with the stock market going up and down like a roller coaster, making investors and pundits almost dizzy. That is, until the great push up to the very height of the market in early September.
It was the laissez-faire abuses of the 1920's, the reign of supply side economics, the institutionalized political corruption of easy money, an oversized, overly influential and powerful financial/industrial sector that set the stage for the terrible Depression of the 1930's.
It also gave rise to the many reforms introduced by the FDR administration.
Most of which have been steadily overturned, one by one, by the big money interests who care for nothing but themselves, and would do it again, and again, if allowed to do so. ...
Legendary gold expert Jim Sinclair says what is going on right now in the stock market is just the warm-up act. Sinclair contends, “This is a pre-crash, and we are not making it through September without the real thing. Everybody is on credit. Main Street is on credit. This seems to be a bubble of historical proportion when it comes to the amount of money supporting the accepted lifestyles as being the new normal. Raising interest rates is impossible today. The market is so fragile. Nothing can come out that causes people any concern or derivatives any change, nothing whatsoever. We are going through a period of time where expecting nothing meaningful is a dream. These are times never experienced in financial history. . . .It is very possible that we are going to have a super civilization change. ”
Click through for the full post and the video with Jim Sinclair.
The herd must be turned away from selling by any means available, and at this point, that means coordinated buying by all the world's Plunge Protection Teams. Central bankers are watching Marx's dictum all that is solid melts into air play out in global stock markets with a terror informed by the scalding memories of 2008's global financial meltdown.
Once the trap-door opens, there is no bottom without prompt action by the world's Plunge Protection Teams--the plausible-deniability action heroes of the hyper-speculative status quo who leap into action when global stock markets threaten to melt down. After half a decade of ceaseless saves, we all know the mechanics of Plunge Protection. Since the majority of trading is now done by software programs (trading bots, algorithms, etc.), the first step is to create positive momentum so the bots will detect an "up day" and buy, buy, buy.
Now the Plunge Protection Team, real in fact and law, has to turn the tide immediately or confidence is gone and so is everything else except monetary gold and silver. Once again the big boys, as in the 1970-1980 period, are about to make the most money over the shortest period of time long on gold and silver. Nothing changes except this might well be the precious metals rally you never sell. There is a sound argument for $50,000 per ounce gold. There is a strong basis to consider the factual lack of physical gold and silver due to the secret buying by the gold banks and super wealthy personalities during the four year decline while pressuring the paper market for precious metals to make the purchases of the physical bullion. I believe that is that is the total story. I have never changed my mind or been told to by the inside, the only ones that really know what the plan is. I am however told that this rally off $1080 gold will be stupendous.
If we call stagnation progress, what have we accomplished? Beneath the surface PR of progress, the operant dynamic of this era is stagnation. Cheerleaders of progress have a few unalloyed wins in the past 15 years--battles won against diseases, for example--and a general increase in living standards among the world's poorest populations.
But much of what is sold as progress is an inch deep and a mile wide: the proliferation of smart phones and social media for example. What the cheerleaders of progress don't dare mention is the stagnation of quality, political choice, productivity and growth that isn't dependent on the hyper-expansion of debt and financial speculation.
"Only by involving Chinese financial institutions in the global gold fix mechanism," says Beijng-approved news-site China Daily, quoting Roland Wang at market-development organization the World Gold Council, "and by advancing [Yuan-denominated contracts] can China increase its gold price-fixing power accordingly."
Further liberalization of China's domestic gold exchanges will see the world's largest mining and consumer nation "taking its place" in the world market, says Wang.
"We are imperial, and we are in decline... People are losing confidence in the Empire."
This is the key theme of Larry Wilkerson's presentation. He never really questions whether empire is good or bad, sustainable or not, and at what costs. At least he does not so in the same manner as that great analyst of empire Chalmers Johnson.
It is important to understand what people who are in and near positions of power are thinking if you wish to understand what they are doing, and what they are likely to do. What ought to be done is another matter.
Wilkerson is a Republican establishment insider who has served for many years in the military and the State Department. Here he is giving a 40 minute presentation to the Centre For International Governance in Canada in October, 2014.
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