Gold World News Flash |
- U.S. Dollar QE Death Sentence, Us Treasury Bond Black Hole
- Gold Technical Buy Signal
- When Hindenburg Omens Are Ominous
- QE Death Sentence & UST Bond BLACK HOLE
- The Rich, The Poor, & The Trouble With Socialism
- Is The "Smart Money" Ready To Bet On Gold?
- Gold, China, Trump & The Jewish Crime Syndicate — Jeff Nielson
- When Hindenburg Omens Are Ominous
- Bundesbank hasn't secured Germany's gold, repatriation campaign leader says
- "They'll Blame Physical Gold Holders For The Failure Of Monetary Policies" Marc Faber Explains Everything
- It’s challenging to be a pessimistic libertarian
- China About To Make History — Again
- Alasdair Macleod: Gibson's paradox -- the consequences
| U.S. Dollar QE Death Sentence, Us Treasury Bond Black Hole Posted: 10 Aug 2015 12:40 AM PDT Rather than stimulus, the USFed's Quantitative Easing is a death sentence for the USDollar. It might provide an ongoing backdoor bailout opportunity for Wall Street banks, and even a window for China to switch from long dated to short dated USTreasurys, but QE is death sentence. It guarantees that the USDollar will be removed from the global premises and placed in the dustbin of history. Foreign banking systems are largely devoted to USTBonds as the foundation for their entire reserves system. The African type of hyper monetary inflation blessed as good and fine stimulus is a sentinel signal by the US Federal Reserve itself, given to the Eastern producing nations who save in the $billions. They will start a caravan to exit the USDollar in their banking systems. They have great challenges in doing so, and must follow a prescribed path. That path is the Chinese RMB as an intermediary device, a transition tool. The goal is the return of the Gold Trade Standard, which will assure the return to the Gold Currency Standard and the Gold Banking Standard. The absent solution to the chronic global financial crisis has been the refusal to put Gold at the apex. Instead, the big banks have become zombies, the economies have become sclerotic, the financial structure have been control rooms, the bond platforms have been fracturing, while the USGovt has relied upon bond fraud, gold thefts, the printing press, and predatory wars to defend the King Dollar regime. It is due for the funeral pyre. |
| Posted: 10 Aug 2015 12:06 AM PDT For those traders who need to wait until the 'technicals' signal a buy. The signal has been given. |
| When Hindenburg Omens Are Ominous Posted: 09 Aug 2015 11:51 PM PDT by John Hussman, via Zero Hedge:
Still, when we think of market "internals," the number of new highs and new lows can contribute useful information. To expand on the vocabulary we use to talk about internals, "leadership" typically refers to the number of stocks achieving new highs and new lows; "breadth" typically refers to the number of stocks advancing versus declining in a given day or week; and "participation" typically refers to the percentage of stocks that are advancing or declining in tandem with the major indices.
The original basis for the Hindenburg signal traces back to the "high-low logic index" that Norm Fosback created in the 1970's. Jim Miekka introduced the Hindenburg as a daily rather than weekly measure, Kennedy Gammage gave it the ominous name, and Peter Eliades later added several criteria to reduce the noise of one-off signals, requiring additional confirmation that amounts to a requirement that more than one signal must emerge in the context of an advancing market with weakening breadth. Those refinements substantially increase the usefulness of Hindenburg Omens, but they still emerge too frequently to identify decisive breakdowns in market internals. However, one could reasonably infer a very unfavorable signal about market internals if leadership, breadth, and participation were all uniformly negative at a point where the major indices were still holding up. Indeed, that's exactly the situation in which a Hindenburg Omen becomes ominous. The chart below identifies the small handful of instances in the past two decades when this has been true.
While the measures of market internals that we use in practice are far more comprehensive, the evidence from leadership, breadth and participation above provides a fairly obvious signal of internal dispersion in the market. In our view, that dispersion is a strong indication that investors are shifting toward greater risk aversion. In an obscenely overvalued market with razor-thin risk premiums, a shift in the risk-preferences of investors has historically been the central feature that distinguishes a bubble from a collapse. |
| QE Death Sentence & UST Bond BLACK HOLE Posted: 09 Aug 2015 09:55 PM PDT by Jim Willie, GoldenJackass.com, via Silver Doctors:
QE FACTORS The QE initiatives are backfiring, adding incentive to the financial markets in a sick distorted manner, but at the same time killing the USEconomy from capital destruction. It has an equally destructive macro effect on the global economy. The USD is wrecking the world economic and financial system, even while the Petro-Dollar delivers equally powerful blows from its dismantling to the contract net foundation. The macro effect from QE is seen in hedging against the USD which is subjected to the African monetary policy. To praise it as adaptive and effective is intellectually criminal and abominable. Ironic that the White House has an African resident, and the USFed has an African monetary policy, and the USMilitary has hidden interests at the African Horn in Djibouti. But the Chinese have an African gold connection through Congo to Dubai and Hong Kong in return through the lower route on the distress road. The macro QE effect urges Eastern nations to divest USTreasury Bonds in favor of Gold bullion, mineral deposits, even energy deposits. The higher cost structure has killed working capital and put it on the sidelines, the retired capital concept that escapes the view of Western economists, mostly hacks and banker pimps. The Eastern nations also have embarked in numerous large capital projects, often called infrastucture deals. It is all hedging, diversifying, abandoning, done in preparation. At the micro level, the continued Zero Interest Rate Policy (ZIRP) exerts a powerful force toward killing the USEconomy from the street level. It assures and delivers an inadequate income for pensions and insurance firms. The 0% rate has been in place since 2009, when the public was told it would be temporary. The Jackass warned it would be permanent. Pensions cannot meet their obligations any longer, and have resorted to selling their core holding assets, often called their nut. Not a single corporate or state pension fund has avoided serious problems. Insurance firms are more sprawling in their structure. They cannot meet their obligations any longer, and have resorted to selling their core holding assets, their nut. These are the strong detrimental micro effects on financial structures. The hundreds of thousands of private savers (like my father) have $billions stuck in bank certificates which earn paltry sums, unless they are old from the last decade or earlier. Worse, many banks forced older CD holders to convert to newer versions at much lower rates, using the contract fine print (font 4). In addition, the zero bound rate has resulted in harmful effects to entire financial market pricing and allocation of assets.
BLACK HOLE & FINANCIAL PHYSICS The USTreasury Bond market should be viewed as a grand black hole. It is the last asset bubble before USGovt debt default with restructure. Many observers of financial markets believed the US housing market was the final asset bubble. The Jackass warned several years ago, that NO, the last great asset bubble would be the grand USTreasury Bond market. Enter financial physics and truly powerful forces. The USTreasury Bond is acting like a gigantic financial black hole. All other bonds are being forsaken in order to hold the sovereign bond from the protected exceptional nation, in addition to many foreign currencies being forsaken in order to hold the USDollar in safety. The USTBond black hole draws in global funds with a powerful deceptive force. The QE is enforced while US$-based financial markets are supported with other grand magnificent bubbles like the US Stock market. The images below of the astronomical black hole and financial black hole are stark. The financial version also resembles a storm drain. The black hole is made evident in the movement of other bond types. The corporate bonds are being sold in weak markets, in favor of moving the funds into the perceived safer USTBonds. The high yield corporate bonds (aka junk bonds) are in near ruins. The panicky sellers are moving the funds into the perceived safer USTBonds in a torrent. Foreign nations are moving their weaker currencies into the supposedly safer USTBonds also. The dismantled Petro-Dollar derivatives are forcing redemption of the huge contracts in USDollar terms, thus providing an artificial demand for USDollars at a time of weakness in foreign national economies. The Emerging Market nations have slower demand from the broken Western consumer economies. The foreign financial firms and corporate entities are moving funds into the supposedly safer USDollar, adding to the decline of their native currencies. A vicious cycle has emerged, where financial factors related to the Petro-Dollar collapse push up the USD exchange rate, while foreign nations dump their own currencies in favor of the deeply damaged decaying USDollar which can only be described as toxic with an African basis of integrity. Conclude that a wide variety of economic capital is being attracted into USTreasury Bonds. It is a black hole, the climax of the Fascist Business Model which puts emphasis on the big banks. They never faced the consequence of their criminality in bond fraud, contract fraud, counterfeit fraud, and even murder to silence those who could report on the derivative losses, the Maastricht violations, and the dirty Russian money. The nexus of most crime has been London and New York. Vast bank liquidations will accompany the GLOBAL RESET, thus its resistance.
BROKEN USTREASURY BOND MARKET STRUCTURE To be sure, money is rapidly fleeing from capital usage and devotion. It goes into USTreasury Bonds. Think of its as an African warehouse with structural integrity problems of the worst possible kind. The QE programs and initiatives have taken a heavy toll. They have been in place since 2012, when the public was told it would be temporary. The Jackass warned it would be permanent. Many are the broken structural elements of the USTBond market. To begin with, its trading volume is down by a whopping 60% in the last two years or less. The result has been more bond market volatility. Such sensitivity has extended to the German Bund market as well, where they have an opposite problem of inadequate debt to form new bond securities on the supply side. With the eerie Euro Central Bank bond purchase program in place, the result has been the Bunds flirting with negative bond yields due to high demand and low supply. The Germans need to shape up and produce more debt like the expert Americans. The more pervasive and visible fracture feature of the broken bond market is the general negative bank rates offered across the Western world. The chief violators are the biggest banks. A ripe 22 nations were recently cited to sport negative bank rates. Apparently too much economic capital has been liquidated, no longer functioning within the corporate business sectors, and the banks do not want the excess funds. Besides, the big banks cannot make money lending anymore, since very few viable borrowers exist in the horrendous business climate. If negative bank rates do not awaken the sleepy, dopey, dullard, self-deluded, and badly educated masses, nothing will. “Hello my name is Mike, and I want to pay your corrupt broken insolvent bank to hold my money in an account, which is considered an unsecure credit which you can seize at your whim.” Yeah yeah, like that!!! (totally insane, far from normal) Many are the broken pieces in the USTreasury Bond market. It is a gigantic bubble, the biggest in modern history. Given the dominant USFed presence, the legitimate buyers and investors have been driven out. No prudent strategy would have bonds invested in instruments supported by Third World hyper monetary inflation policy, even if deemed wondrous, even if blessed as stimulus, even if pronounced as good. The major bond investors have long ago sold out to the USFed, which has accumulated a $4.8 trillion heaping pile of toxic paper that nobody wants. The USFed has become the USTBond market, the buyers long gone. The value of a toxic paper mache monster pig pile is spurious, probably zero. When burned down to its base elements, it will show paper ash, ink, and metal filaments, nothing more. Consider some broken pieces. The REPO market flirts with negative rates. Medium and large sized companies use the REPO window to lend USTreasury Bills typically, and some high rated corporate bonds, in return for short-term loans. Imagine IBM or Walmart trading $1 billion in USTBills for a 3-week loan. Too many such short-term funding loans have come to the Fed’s REPO window, leading them to reduce the rate offered into negative territory at times. The companies must pay for the privilege. Call it the flirt with negative. The Dollar Swap window is another important feature of brokenness. Medium and large sized foreign banks and financial firms use the Dollar Swap facility (much larger than a mere window) to complete large loans. The window gained much attention in late 2011 when it became known that the Trichet Euro Central Bank had borrowed $2.3 trillion in order to keep the damaged big European banks afloat after the PIGS sovereign debt wrecked their banking systems. In the past year, the big factor has been redemption of broken derivatives. The two major types are the Petro-Dollar and the Interest Rate Swap contracts. Imagine Societe Generale in France or a large German bank being forced to redeem a few contracts in the $10 billion range. They appeal to the USFed, the grand counterfeiter and creator of fake money, to provide the funds from the controlled spigot. The big Euro banks pay a trifling fee to borrow. The contracts are liquidated, and the USDollar exchange rate is pushed up. Too many such oversized emergency funding facilities have come to the Fed’s Dollar Swap door, leading them to reduce rates. They flirt with negative rates also.
QE ABUSE & STEEPED LIES The abuse is laced all through the USTreasury Bond market. To begin with, JPMorgan is on the hot seat, the center of some unwanted attention since it has become known that the venerable crime syndicate hive had sold over twice the total USGovt bond issuance in its worldwide offices. At one point in 2013, the Jackass came to learn that from past data, almost $4.5 trillion in USTBonds were sold by JPMorgue when only $2.2 trillion had been issued formally. Some foreign nations like Italy had been caught using each sovereign bond serial number twice in sales. These big banks never pay for their crimes, as they repeat them in other forms. Since JPM is the official USFed market agent, no consequence in criminal charges. Focus on the Reverse REPO, which is highly innovative from two angles. Normally the USFed requires collateral to be placed at the REPO window, as cited above from companies seeking cash infusions on a temporary basis. Sometimes the USFed announces a ripe volume of Reverse REPO infusions into the system. They occasionally attract bad attention, but it wanes with the next fiction on strong markets and recovering economies, or even debate among fools who anticipate official rate hikes. The USFed uses the Reverse REPO to hide some of its QE volume. It is concealed QE volume, part of the biggest lie in US financial history since the USFed has generated multiple $trillions in hidden channel support. The key is no collateral placed on the opposite side of the window. It is neither stimulus nor minor in volume. The central bank helm is managing a gigantic volume, hidden in numerous ways. The John Q Public is none the wiser, reading the controlled fiction in financial press publications. The related other side of the table features the Failures to Deliver on USTreasury Bonds. The Wall Street Journal and New York Times report on the phenomenon, but quickly move off the topic. To have a significant figure of undelivered USTBonds speaks of more deep criminality. It indicates counterfeit or naked shorting by Wall Street banks. They have found a way to bring in liquidity to their broken insolvent big banks, selling USTBonds they do not own, receiving the funds into the corporate treasuries, improving handsomely their cash flow, never to deliver on the product. The buyer is none other than the US Federal Reserve, which does not force prosecution for counterfeit or bond fraud from its vassal bank accomplices in the crime of counterfeit. The result is a fancy pants infusion of big $billions into the Wall Street banks with no costs associated. One must wonder how they hide the funds within their balance sheets, 10-Q filings, and quarterly statements. Probably they do so by mixing it in with their ample busy narco funds. The USFed has been also concealing its QE volume by export. They have arranged since 2012 to create a group of secondary nations for second sourcing gigantic USTreasury Bond purchases. The source of funds is both Dollar Swaps for the USFed to buy USTBonds at arm’s length in Europe, but also dumped Chinese USTBonds from their reserves. Some Russian held USTBonds might also be in the mix. The nations are the BLICS nations, namely Belgium, Luxembourg, Ireland, Cayman, and Switzerland. The latter is not a small nation, but probably helps to manage the slush funds from the Basel hive. The Belgium location is important as seat of the European Commission and Parliament. The BLICS have invested in over $800 billion in USTBonds since mid-2012, almost equal to the USFed itself on its stated (lies for sure) QE volume. The official USFed understates the true QE volume by at least two-fold. Add in the derivative contract coverage, and the Jackass believes the true QE volume is perhaps 10x to 30x greater. The last item to mention is not exactly abuse within the USTBond market, but an embarrassing backflow that must be hidden in its coverage. Several large nations, primarily China and Russia, are using USTBonds and USTBills as payment in large contract deals, such as big infrastructure projects and big asset purchases. They use third party funds to complete the payment within large deals. Like China funding a project in Nigeria for energy facilities, port facilities, railways, even community centers with schools and hospitals. They fund the project with USTreasurys. The practice is called Indirect Exchange, done to facilitate large asset purchases and giant payments. The USFed must soak up the volume, not give it publicity, and do so without altering its lies on the true QE volume data. |
| The Rich, The Poor, & The Trouble With Socialism Posted: 09 Aug 2015 07:05 PM PDT Authored by Bill Bonner (of Bonner & Partners), illustrated by Acting-Man's Pater Tenebrarum, Rich Man, Poor ManPoverty is better than wealth in one crucial way: The poor are still under the illusion that money can make them happy. People with money already know better. But they are reluctant to say anything for fear that the admiration they get for being wealthy would turn to contempt. “You mean you’ve got all that moolah and you’re no happier than me?” “That’s right, man.” “You poor S.O.B.” We bring this up because it is at the heart of government’s scam – the notion that it can make poor people happier. In the simplest form, government says to the masses: Hey, we’ll take away the rich guys’ money and give it to you. This has two major benefits (from an electoral point of view). First, and most obvious, it offers money for votes. Second, it offers something more important: status.
...and ending up moping. After you have food, shelter, clothing, and a few necessities, everything else is status, vanity, and power. Extra money helps us feel good about ourselves… and attract mates. It’s not just the money that matters. It’s your relative position in society. From this point of view, it does as much good to take away a rich person’s money as it does to give money to a poor person. Either way, the gap closes. Never, since the beginning of time up to 2015, has government ever added to wealth. It has no way to do so. And no intention of doing so. All it can do is to increase the power, wealth, or status of some people – at others’ expense.
The Trouble with SocialismThat is a perfectly satisfactory outcome for most people, at least in the short term. But the more this tool is used – the more some people’s power, status, and wealth is taken away – the more the wealth of all of them declines. The trouble with socialism, as Maggie Thatcher remarked, is that you run out of other people’s money. You run out because there is only so much wealth available… and because the redistribution of that wealth distorts the signals and incentives needed to create new wealth.
Joseph Stalin’s modest little dacha in Moscow – highly appropriate for a the global leader of the proletarians Photo credit: RIA Novosti This means that society gets poorer relative to other societies that are not stealing from one group to give to another. After a while, the difference becomes a problem. The meddlers see that they are falling behind and change their policies to try to get back in the race. (This is more or less what happened in Britain and China in the 1970s and the Soviet Union in the 1980s.) Or the poorer society is conquered by the richer one (which has more money to spend on weapons). There is one other wrinkle worth mentioning…
Stalin’s summer residence in Sochi – the leader of the proletarians after all needed to rest now and then. Photo credit: Miracle Maker
Although it is true that “leveling” may have a pleasing aspect to the masses (bringing the rich down so there is less difference between the two groups)… it is also true that leveling is just what powerful groups do not want to happen. Even when the elite go after “the rich” with taxes, confiscations, and levies, they tend to look out for themselves in other ways.
Stalin’s private indoor swimming pool in Sochi – a marble-quiet place of contemplation, perfect for hatching out the new plans to improve the happiness of the proletarians. Photo credit: Miracle Maker
They allow themselves special rations – special medical care… special pensions… special parking places… and various drivers, valets, and assistants. One study found that there was more difference between the way Communist Party members and the masses lived in the Soviet Union than there was between the rich and poor in Reagan’s America.
Soviet leader Leonid Brezhnev photographed during a hunt in the GDR with his buddy Erich Honecker. Only the “dear leaders” could indulge in such luxuries in the socialist Utopia. Photo credit: Wladimir Musaelian / TASS
About to go deer hunting in the GDR’s hunting grounds for comrades that were slightly more equal than the rest of the population (from left to right): Günter Mittag, Secretary for the Economy of the Socialist Unity Party’s central committee, Erich Honecker, General Secretary of the central committee of the Socialist Unity Party, Andrei Gromyko, Foreign Minister of the Soviet Union of Socialist Republics, and Pyotr Abrassimov, the Soviet Union’s ambassador to the GDR Photo credit: Bundesarchiv
Alan Greenspan Was RightAll of this brings us to here and now… and to gold. Traditionally, gold is a form of money. Money has no intrinsic value. It is the economy that gives money its value. The more an economy can produce the more each unit of money is worth. It doesn’t matter whether it is gold, paper, or seashells. But just as the common man is deceived by money (he thinks more of it will make him happier), so are policymakers. Their belief is a little more sophisticated. They know it is the economy, not money, that creates wealth. But they believe that adding money (and more demand) will make the economy function better… and make people wealthier.
Digital credit galore: total US credit market debt (black line), gross federal public debt (green line) and GDP (red line). Somehow, adding more and more debt hasn’t really made us a lot richer. It has however created a great mass of debt slaves – click to enlarge. And in today’s post-Bretton Woods monetary system, they don’t add physical money (gold, paper, or coins); they add digital credit. This new form of money takes the scam to a new level. We have been trying to understand (and explain) how the system works and why it is doomed to failure. But Alan Greenspan – bless his corrupted little heart – was on the case even before the credit bubble began:
Alan Greenspan, here photographed during a poker game as he announces a raise by ten dimes. |
| Is The "Smart Money" Ready To Bet On Gold? Posted: 09 Aug 2015 06:45 PM PDT For the last three weeks, gold has experienced something that has never happened before - hedge funds aggregate net position has been short for the first time in history.
However, as Dana Lyons notes, this week saw another 'historic' shift in gold positioning as commercial hedgers shifted to the least hedged since 2001... so the 'fast' money is chasing momentum and the 'smart' money is lifting hedges into them. It’s no secret that commodities have taken a drubbing during the deflationary spiral over the past year. And precious metals have been right up front in this beating. This includes gold, which has lost over 40% of its value the past 4 years. So needless to say, there has not been much good news on that front. However, as we touched on in a piece two weeks ago, there are signs beginning to pop up that may provide a glimmer of hope for gold bugs. In dollar terms, the price of gold continues to leak, offering very little evidence of any impending stability or bounce. On the other hand, in Euro terms, gold prices reached a key juncture a few weeks ago, as outlined in that previous post. And while no bounce has materialized as of yet, gold has at least held at the level we noted. Today’s Chart Of The Day offers another hopeful data point for gold bulls. The CFTC tracks the net positioning of various groups of traders in the futures market in a report called the Commitment Of Traders (COT). One such group is called Commercial Hedgers. As their name implies, their main function in the futures market is to hedge. And while the Non-Commercial Speculators tend to be trend-following funds, the Commercial Hedgers’ postions tend to move contrary to price trends. Thus, it is almost always the case that these Hedgers will be correctly positioned – and to an extreme – at major turning points in a market. How is that relevant for gold? As of this week, Commercial Hedgers are holding the lowest net short position in gold futures since the launch of the gold bull market in 2001.
Does this mean that a reversal higher is imminent in gold? Not necessarily. The thing with COT analysis is that it is difficult to correctly determine when an “extreme” in Hedgers’ positioning will actually result in a price reversal. As is said regarding all sorts of market metrics, an extreme in COT positioning can always get more extreme. Plus, the COT positioning can peak well in advance of the turn. Consider the Hedgers’ maximum net short positioning in gold futures which occurred in December 2009, 21 months – and another 50% gold rally – before prices topped. Thus, it is tough to time trades with accuracy based on the COT report. However, one thing we can say in the gold bugs’ favor: what had mostly been a headwind for gold for the past decade or so is no longer the case. While it may not make an immediate impact, the “smart money” Commercial Hedgers are now more aligned with them than at any point since the bull market began in 2001. * * * More from Dana Lyons, JLFMI and My401kPro. |
| Gold, China, Trump & The Jewish Crime Syndicate — Jeff Nielson Posted: 09 Aug 2015 06:34 PM PDT by SGT, SGT Report.com: Jeff Nielson from Bullion Bulls Canada drops by to set the record straight about China’s gold hoard which now “officially” stands at a mere 1,658 metric tons. Many precious metals pundits have concluded that China could have many more tons than it reported in July. Jeff says, “China could have 4,000 tons of gold RIGHT NOW and not have done anything at all the least bit fraudulent or dishonest (with its “official” reporting of 1,658 tons) BECAUSE all of the gold it adds from its DOMESTIC SOURCES NEVER has to be reported!” Jeff also discusses the proof that the ‘Fiver-year low for gold” is a fraud — when measured in nearly all currencies other than the Dollar. We also discuss the 2016 elections and the role Donald Trump is playing as rabble-rouser. Is he for real, or does his cozy family relationship with powerful Jewish interests offer a fuller picture of a Trump presidency? Jeff calls out what he has dubbed the “Jewish crime syndicate” and its influence on American politics, Donald Trump and anyone who sits in the White House. Thanks for tuning in. |
| When Hindenburg Omens Are Ominous Posted: 09 Aug 2015 06:20 PM PDT Excerpted from John Hussman's Weekly Market Comment, I’ve frequently noted that Hindenburg “Omens” in their commonly presented form (NYSE new highs and new lows both greater than 2.5% of issues traded) appear so frequently that they have very little practical use, especially when they occur as single instances. While a large number of simultaneous new highs and new lows is indicative of some amount of internal dispersion across individual stocks, this situation often occurs in markets that have been somewhat range-bound. Still, when we think of market “internals,” the number of new highs and new lows can contribute useful information. To expand on the vocabulary we use to talk about internals, “leadership” typically refers to the number of stocks achieving new highs and new lows; “breadth” typically refers to the number of stocks advancing versus declining in a given day or week; and “participation” typically refers to the percentage of stocks that are advancing or declining in tandem with the major indices. The original basis for the Hindenburg signal traces back to the “high-low logic index” that Norm Fosback created in the 1970’s. Jim Miekka introduced the Hindenburg as a daily rather than weekly measure, Kennedy Gammage gave it the ominous name, and Peter Eliades later added several criteria to reduce the noise of one-off signals, requiring additional confirmation that amounts to a requirement that more than one signal must emerge in the context of an advancing market with weakening breadth. Those refinements substantially increase the usefulness of Hindenburg Omens, but they still emerge too frequently to identify decisive breakdowns in market internals. However, one could reasonably infer a very unfavorable signal about market internals if leadership, breadth, and participation were all uniformly negative at a point where the major indices were still holding up. Indeed, that’s exactly the situation in which a Hindenburg Omen becomes ominous. The chart below identifies the small handful of instances in the past two decades when this has been true.
While the measures of market internals that we use in practice are far more comprehensive, the evidence from leadership, breadth and participation above provides a fairly obvious signal of internal dispersion in the market. In our view, that dispersion is a strong indication that investors are shifting toward greater risk aversion. In an obscenely overvalued market with razor-thin risk premiums, a shift in the risk-preferences of investors has historically been the central feature that distinguishes a bubble from a collapse. In my view, dismal market returns over the coming decade are baked in the cake as a result of extreme overvaluation at present. An improvement in market internals, however, would reduce the immediacy of our downside concerns. While a decision by the Federal Reserve to postpone the first interest rate hike might prompt a shift to more risk-seeking speculation, this outcome is not assured. The key indicator of risk-seeking would still be the behavior of market internals directly, not the words or behavior of the Fed. So we remain focused on market internals. In any event, waiting to normalize monetary policy may defer, but cannot avoid, a market collapse that is already baked in the cake. The Fed has only encouraged the completion of the current market cycle to begin from a more extreme peak. As we saw in 2000-2002 and again in 2007-2009, until and unless investors shift toward risk-seeking, as evidenced by the behavior of market internals, monetary easing may have little effect in slowing down a collapse. Read Hussman's full letter here... * * * Interesting...
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| Bundesbank hasn't secured Germany's gold, repatriation campaign leader says Posted: 09 Aug 2015 04:38 PM PDT 7:38p ET Sunday, August 9, 2015 Dear Friend of GATA and Gold: On behalf of Matterhorn Asset Management, freelance journalist Lars Schall interviews the leader of Germany's gold reserves repatriation campaign, Peter Boehringer, about gold's role in the international financial system and the failure of Germany's central bank, the Bundesbank, to secure and account for the nation's gold reserves. The interview is 14 minutes long and is posted at Matterhorn Asset Management's Internet site, Gold Switzerland, here: https://goldswitzerland.com/peter-boeringer-bundesbank-argues-the-wrong-... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT We Are Amid the Biggest Financial Bubble in History; With GoldCore you can own allocated -- and most importantly -- segregated coins and bars in Switzerland, Singapore, and Hong Kong. Switzerland, Singapore, and Hong Kong remain extremely safe jurisdictions for storing bullion. Avoid exchange-traded funds and digital gold providers where you are a price taker. Ensure that you are outright legal owner of your bullion. If you do not own segregated bullion that you can visit, inspect, and take delivery of, you are exposed. Crucial guides to storage in Singapore and Switzerland can be read here: http://info.goldcore.com/essential-guide-to-storing-gold-in-singapore http://info.goldcore.com/essential-guide-to-storing-gold-in-switzerland GoldCore does not report transactions to any authority. Safety, privacy, and confidentiality are paramount when we are entrusted with storage of our clients' precious metals. Email the GoldCore team at info@goldcore.com or call our trading desk: UK: +44(0)203-086-9200. U.S.: +1-302-635-1160. International: +353(0)1-632-5010. Visit us at: http://www.goldcore.com Join GATA here: New Orleans Investment Conference http://noic2015.eventbrite.com/?aff=gata The Silver Summit and Resource Expo 2015 http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2... Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference: https://jeffersoncompanies.com/landing/2014-av-powell Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
| Posted: 09 Aug 2015 04:00 PM PDT Submitted by Johannes Maierhofer and Peter Matay via Marcopolis.net,
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As for Chinese stocks, they went up very strongly over the last year, but recently they crashed just as hard. Is this a precursor to something worse or is it merely a bump on the road towards a still ascendant China?
China has established the Asian Infrastructure Investment Bank (AIIB) and went ahead with plans for a so called “New Silk Road”, a huge infrastructure project, connecting China with Europe via a new land route and a maritime equivalent. Steen Jakobsen from Saxo Bank mentioned a while ago that this could be a game-changer - particularly in regards to the demand for commodities as much of the work and investment needed is in infrastructure, buildings and railroads. What do you think?
What about Europe and Russia? E.g. many German industrialists don’t seem too happy with the current sanctions regime.
You already mentioned commodity cycles. Economists have long debated the existence of long term waves in economics – the most prominent concept of which is the so called Kondratieff cycle. In your 2002 book you pick up on the idea by guessing where we might find ourselves in the current Kondratieff wave. If you did the same today, what do you think? Are we still in a falling wave? What are the important characteristics to look at? And most importantly, what does it mean for the medium to long-term outlook?
What was still in place until recently is this long term down trend in interest rates.
In regards to the colossal amounts of debt there are two major schools of thought: Inflationists and Deflationists. According to the first, all the money printing will lead to high levels of inflation, devaluing the currency and with it the debt will be inflated away. Deflationists would hold against, that, even if central banks wanted to, they ultimately cannot stop deflation. Where do you stand in that debate?
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| It’s challenging to be a pessimistic libertarian Posted: 09 Aug 2015 03:22 PM PDT Optimism is a state of mind. It means to be hopeful or confident about the future. It is a belief that the movie you're starring in will have a happy ending, no matter how bruising the journey getting there. No one knows what the future will bring because the future doesn't bring anything. People do. You and I and the rest of the world make the future, some more so than others — some a lot more so. The leading future-makers of the past century — at least those who entered national politics — have left a long trail of blood and misery, and today's political leaders are staying the course. There's an old saying: "Man proposes, but God disposes." If the U.S. government is today's god, what chance do a relative handful of freedom-loving people have against such an institutional behemoth? We're only a false flag away from martial law. The internment camps are built and ready for occupancy. The police are militarized and ready to carry out orders. The voters remain insouciant. This is no time for optimism. It's time to run for our lives. But before we take off, we would do well to take stock of our assets. There's a scene in the Clint Eastwood movie "Absolute Power" that illustrates the point I wish to make. Eastwood, as legendary jewel thief Luther Whitney, witnesses the murder of a young woman during one of his heists. The president (Gene Hackman) and his SS agents are the murderers. The victim is the wife of the president's biggest supporter, an octogenarian billionaire (E. G. Marshall) whose mansion Luther was robbing. Whitney was hiding behind a one-way mirror at the time but later learns he's a suspect, because of the missing jewels. Luther knows the president's henchmen will try to kill him before he can expose them and rather than fight such a powerful foe makes arrangements to leave the country. While at the airport ready to depart he sees a staged press conference on TV. It's an appalling political spectacle. A mournful president is offering sympathy to the bereaved husband, who's standing beside him. "This man has been like a father to me," he announces, then turns to his friend. "I would give the world to lessen your pain." He blots his eyes, apparently too choked up to continue. Luther simmers with fury. "You heartless whore," he says aloud to the TV. "I'm not about to run from you." Luther rediscovered his true grit. He also had conclusive evidence in his possession, as well as a daughter he cared about. What about you? If optimism still seems like a stretch, ask yourself what it would take for you, an informed libertarian, to be pessimistic. First and foremost, you would have to view your "informed libertarianism" as thoroughly grounded in blind faith, not to mention wrong. More precisely, to be pessimistic you would have to believe that the Keynesians are right, that the current recovery is indeed real and not a bubble, that free markets are inherently flawed and in need of regulation, debt-financed stimulus, bail-outs of the big boys, and an instantly-inflatable money stock to shore up emergencies. You might long to be free, but the economic truth is, notwithstanding such longings, freedom in a social context is a return to the robber baron days of the 19th century. Along with this, you, an informed libertarian, would have to believe that Mises, Rothbard, Hazlitt, Salerno, Hulsmann, DiLorenzo, Paul, Rockwell, de Soto, Shostak, Woods, North, Murphy, and many other Austrian authors were either grossly ignorant or lying when they championed unhampered free markets and sound money as the necessary precondition of peace, freedom, and prosperity. Along with this, you would have to ignore the overwhelming data showing that market economies improve living standards and concede that what we need is more government in our lives. For a libertarian to be pessimistic, you would have to believe that bureaucrats and other time-servers inoculated against market forces will outwit entrepreneurs in the long run. You would have to believe that politicians who steal your money to start wars and bail out their friends contribute more to our welfare than Tim Berners-Lee, inventor of the World Wide Web, or Jeff Bezos and countless other entrepreneurs. As a pessimistic libertarian, you would have to believe that central bank counterfeiting produces a sound monetary system, that a market-selected money inevitably goes astray, that money under control of a politicized committee produces the best results for everyone, and that a managed monetary system will last indefinitely. You would have to believe gold is truly a barbarous relic, of no more value than a pet rock (when in fact it's more like a door stop, where "door" refers to government). Along with this, you would have to believe that in this age of Wikipedia, web browsers, Khan Academy, Mises Institute, YouTube, the Ron Paul Curriculum, Facebook, Twitter, Skype, texting, email, TED, the proliferation of web-accessible computing devices, and the high Alexa ratings of libertarian web sites, the government will maintain its grip on education, keeping the vast majority of people clothed in tax-funded wool, inculcating the population with the court view of history, with the state/Keynesian view of crisis management, and getting them to swallow whole the pronouncements that pass for news and rational commentary on banker-controlled media. Along with this, you would have to believe John White, Daniel Ellsberg, Frank Serpico, Perry Fellwock, Mark Felt, Michael Ruppert, Frederic Whitehurst, Karen Kwiatkowski, Jesselyn Radack, Sibel Edmonds, Joseph Wilson, Samuel Provance, Russ Tice, Thomas Andrews Drake, Edward Snowden, Chelsea Manning, and numerous other whistleblowers are cowardly traitors and are universally regarded as such. You would have to believe that these people were determined to subvert the lawful undertakings of government rather than exposing the government's heinous wrongdoings. Along with this, you would have to believe that the decentralizing, deflationary, and individual-empowering character of information-based technologies, which has been advancing at an exponential pace at least since 1890 and which is powering research in other fields such as medicine (where 3-D printing is producing surrogate body parts) — and which has put in your pocket a device with more computational power than an early 1990s supercomputer — will slow significantly because engineers and researchers are at a loss to move us beyond the current computing paradigm, Moore's Law. It's challenging to be a pessimistic libertarian. Luther was nearly assassinated and his daughter almost killed in "Absolute Power," but in the end everything worked out. Don't let the fact that the movie is fictional discourage you. Use fiction as a guideline and make your own movie real. If you feel your optimism fading turn up the grit and move ahead. |
| China About To Make History — Again Posted: 09 Aug 2015 10:13 AM PDT Any discussion of China has to open with the now-widely-understood fact that the numbers it reports are not to be trusted. Knowing this makes it easy to dismiss claims of high and consistently-on-target GDP growth, for instance, as a combination of government-directed borrowing and spending, and simple fabrication. But how to handle negative numbers? When a serial fabricator admits that things are bad and getting worse, that would seem to imply that someone at or near the top has concluded that either the facts can no longer be obscured or that there’s an advantage in creating negative expectations. Whatever the purpose, the most recent batch of stories is both strange and scary. For example: China’s stock crash is spurring a shakeout in shadow banks Peak insanity: Chinese brokers now selling margin loan backed securities Here’s a pretty good summary of current trends from Reuters:
Some thoughts But most of it comes back to the strong dollar. Since China’s yuan is pegged to the greenback, when the latter rises so does the former. A soaring currency is always problematic, but it’s especially dangerous for an export-driven economy. So add China to the list of developing country victims of the end of US QE. Put another way, China’s massive post-2008 borrowing is analogous to those dollar “carry trade” loans incurred by Brazil, Thailand, et al, which have become increasingly burdensome as the dollar has risen. Put yet another way, the real taper tantrum is happening overseas rather than on Wall Street. “Economists expect the central bank to cut rates by another 25 basis points this year, and further reduce the amount of deposits banks must hold as reserves by another 100 basis points, according to a Reuters poll last month.” Obviously that won’t help, and will be followed by either (much) more of the same or something different and more dramatic. Devaluing the yuan by adjusting or eliminating its dollar peg comes to mind, as does some kind of explicit “bazooka” QE program (though this is arguably already under way via equity market interventions). But who really knows? Whatever it does, China’s next step will have to be commensurate with the size of the country’s recent malinvestment, which is to say gargantuan. After the fastest-ever rise from Third World to World Power, the biggest-ever debt binge, one of the biggest, most sudden equity bubbles and subsequent busts, China is about to make history at least one more time. |
| Alasdair Macleod: Gibson's paradox -- the consequences Posted: 09 Aug 2015 08:49 AM PDT 11:51a Sunday, August 9, 2015 Dear Friend of GATA and Gold: GoldMoney research director Alasdair Macleod has revisited the old correlation in economics between the general price level and interest rates, "Gibson's paradox," which economists long debated, or at least did before it seemed to break down in recent decades. Macleod argues that the correlation would remain valid in free markets but has been nullified by the destruction by central banks of free markets for money, the seizure by central banks of control over interest rates, which are no longer set by savers and borrowers. This seizure, as might have been suggested to readers of these dispatches over the years, combined with surreptitious intervention by central banks in the gold market to suppress the price of the monetary metal, has distorted or destroyed all markets. Macleod writes that central banks "have turned the principal objective of entrepreneurs from patient wealth creation through the accumulation of profits into ephemeral wealth creation through the accumulation of debt." Macleod's study is headlined "Gibson's Paradox: The Consequences" and is posted at GoldMoney's Internet site here: https://www.goldmoney.com/research/analysis/gibsons-paradox-the-conseque... CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Buy metals at GoldMoney and enjoy international storage GoldMoney was established in 2001 by James and Geoff Turk and is safeguarding more than $1.7 billion in metals and currencies. Buy gold, silver, platinum, and palladium from GoldMoney over the Internet and store them in vaults in Canada, Hong Kong, Singapore, Switzerland, and the United Kingdom, taking advantage of GoldMoney's low storage rates, among the most competitive in the industry. GoldMoney also offers delivery of 100-gram and 1-kilogram gold bars and 1-kilogram silver bars. To learn more, please visit: http://www.goldmoney.com/?gmrefcode=gata Join GATA here: New Orleans Investment Conference http://noic2015.eventbrite.com/?aff=gata The Silver Summit and Resource Expo 2015 http://cambridgehouse.com/event/50/the-silver-summit-and-resource-expo-2... Support GATA by purchasing recordings of the proceedings of the 2014 New Orleans Investment Conference: https://jeffersoncompanies.com/landing/2014-av-powell Or by purchasing DVDs of GATA's London conference in August 2011 or GATA's Dawson City conference in August 2006: http://www.goldrush21.com/order.html Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: |
I've frequently noted that Hindenburg "Omens" in their commonly presented form (NYSE new highs and new lows both greater than 2.5% of issues traded) appear so frequently that they have very little practical use, especially when they occur as single instances. While a large number of simultaneous new highs and new lows is indicative of some amount of internal dispersion across individual stocks, this situation often occurs in markets that have been somewhat range-bound.
Rather than stimulus, the USFed’s Quantitative Easing is a death sentence for the USDollar. It might provide an ongoing backdoor bailout opportunity for Wall Street banks, and even a window for China to switch from long dated to short dated USTreasurys, but QE is death sentence. It guarantees that the USDollar will be removed from the global premises and placed in the dustbin of history. Foreign banking systems are largely devoted to USTBonds as the foundation for their entire reserves system. The African type of hyper monetary inflation blessed as good and fine stimulus is a sentinel signal by the US Federal Reserve itself, given to the Eastern producing nations who save in the $billions. They will start a caravan to exit the USDollar in their banking systems. They have great challenges in doing so, and must follow a prescribed path. That path is the Chinese RMB as an intermediary device, a transition tool. The goal is the return of the Gold Trade Standard, which will assure the return to the Gold Currency Standard and the Gold Banking Standard. The absent solution to the chronic global financial crisis has been the refusal to put Gold at the apex. Instead, the big banks have become zombies, the economies have become sclerotic, the financial structure have been control rooms, the bond platforms have been fracturing, while the USGovt has relied upon bond fraud, gold thefts, the printing press, and predatory wars to defend the King Dollar regime. It is due for the funeral pyre.
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