What is a proper disposition towards life? It is to accept God as a loving father, who is full of tenderness and forgiveness for us, despite our willful blunders and hardened hearts. He yearns for us, as a father and mother yearn for the return of their most beloved child. It is to accept that we are not lost, we are not abandoned. We are wandering like a wayward child, full of our own headstrong delusions. And our father waits expectantly, calling out for us through the darkness. Jesse, 2018
The miners outperformed the metals today for the end of the third quarter. I am getting much more interested in the miners at these prices, and my interest will become stronger if the metals can manage to sustain a rally out of this bear market trend.
If the metals rally, I would expect the mining sector to outperform given its beaten down condition and its higher beta to the metal prices. But that is a big 'if.'
Non-Farm payrolls on Friday.
The active month has flipped over to gold for October and it was reflected in the delivery report from yesterday.
The slow bleed of metal out of the warehouses continues.
"There is a tide in the affairs of men, Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life Is bound in shallows and in miseries.
On such a full sea are we now afloat, And we must take the current when it serves
Or lose our ventures."
William Shakespeare, Julius Caesar
Yes it is almost that time again.
Tomorrow will be the end of the third quarter, and on Friday we will have another Non-Farm Payrolls report.
This report will be watched closely, with the idea of the Fed raising rates, or not.
Gold took a little hit today, but silver closed a bit higher. This is an active month for silver.
There were no deliveries posted at The Bucket Shop yesterday.
Gold continues to bleed slowly out of the warehouses. Silver is streaming out of the Scotia Mocatta warehouse, almost emptying it relative to the other warehouses.
As my godfather, who lived to be 89, used to say: starość nie radość. Old age is no joke.
"There are two kinds of realists: those who manipulate facts and those who create them. The West requires nothing so much as men able to create their own reality."
Henry Kissinger, 1963
"But in these cases
We still have judgment here, that we but teach
Bloody instructions, which, being taught, return
To plague the inventor: this even-handed justice
Commends the ingredients of our poisoned chalice
To our own lips..."
Shakespeare, Macbeth
People take their fashions from the leadership. And the leadership and role models in our culture are emblematic of our failures.
Precious metals took a hit today, as I thought that they might.
The rally last week had more to do with the option expiration than it did with disclosures of physical tightness of gold bullion in particular.
Glencore the commodity firm took a big hit today based on a sell-side analysts forecasts of doom.
The miners were taken out to the wood shed. I am seeing some big companies priced at levels I was buying them in 2002. .
I do believe this is going to come down to hard tacks. The bullion buyers of the world markets are going to keep the physical flow going until something breaks.
The wiseguys lack all restraint, and the regulators are failing to provide adult supervision because of conflicted interests and.utopian ideologies about 'naturally free markets.'
The bubble in junk paper is rolling over as can be seen on the chart below. It has plenty of room below it thanks to the Fed's misdirected policy errors.
There was very little activity at The Bucket Shop to report on from Friday.
Potential claims per ounce of register gold are 262:1. The shills and trolls say don't look at it, means nothing. As well they might, as their true loyalties demand. They mention everything except that this has never happened before in the last twenty years.
But it means nothing. Don't trust your lying eyes. Most everything is being settled on the side, over-the-counter, at undisclosed prices so as not to perturb the public pricing structure. And yet so little actually leaves the warehouses, at least for gold. Odd market price discovery mechanism that.
London is where the physical bullion is gathered, and it is flowing in an easterly direction.
Stocks took a further beating today, and a heaping helping of that was in the direction of commodity trader Glencore thanks to a bit of sell side analysis.
Can you imagine if the Fed had raised rates last week and the market was selling off like this?
And I think it would have because this market is moving in synchronization with world markets, and most of them are rolling over from the recent asset bubble fueled by easy money for the rich and austerity for nearly everyone else.
And the lack of integrity in the statistics and the investment vehicles, and the trample of the rules and financial responsibility is almost disheartening.
There is a lot of money being made. But not by the 99%.
The price of lack of reform and the moral hazard of allowing criminal behaviour to not only escape punishment and correction, but be richly rewarded with outrageous rewards, is beginning to come back and collect the wages of our apathy in the face of injustice and corruption.
What is good? All that enhances the feeling of power, the Will to Power, and the power itself in man. What is bad? All that proceeds from weakness. What is happiness? The feeling that power is increasing— that resistance has been overcome. Not contentment, but more power; not peace at any price, but war; not virtue, but competence.
The first principle of our humanism is that the weak and the failures shall perish. And they ought to be helped to perish. What is more harmful than any vice? Active pity for all failure and weakness — Christianity.
Friedrich Nietzsche
“They often make use of the fact that for many people the content of the message is less important than the way it is delivered.
A confident, aggressive delivery style - often larded with jargon, clichés, and flowery phrases - makes up for the lack of substance and sincerity in their interactions with others ... they are masters of impression management; their insight into the psyche of others combined with a superficial - but convincing - verbal fluency allows them to change their personas skillfully as it suits the situation and their game plan.
They are known for their ability to don many masks, change 'who they are' depending upon the person with whom they are interacting, and make themselves appear likable to their intended victim...
Psychopathic workers very often were identified as the source of departmental conflicts, in many cases, purposely setting people up in conflict with each other. “She tells some people one story, and then a totally different story to others...The most debilitating characteristic of even the most well-behaved psychopath is the inability to form a workable team.
Paul Babiak and Robert Hare, Snakes in Suits
Politicians do not get the attention that so many of them deserve in this documentary.
I think organizations, and even nations, can give themselves over to a kind of collective madness, and harden their hearts over time through fear and fashion.
One of the most concerning trends is the sanctification of violent, deceptive, selfish, and self-deluding behaviour in our society. We fear nothing but power, respect nothing but power, despise and abuse the weak in our bitterness, and believe that anything goes in the service of greed and power.
And the worst is that with all this endless war culture of selfish thieving, we fancy ourselves to be a paragon of history, the culmination of progress, and exceptional for our virtue. There is a downfall, and a tragedy, in the making.
The avalanche of gold that fled the Second World War is going home.
This is a return to a more 'normal' currency regime, and a move towards monetary autonomy in the aftermath of the of Bretton Woods era.
In the post-Bretton Woods II era it appears that independent regional currencies may predominate.
Unless of course the nations can forge a more equitable agreement for an SDR-like clearing currency for international trade that is not dominated by any one nation or group of nations.
There were 63.2 tonnes of gold bullion withdrawn from the Shanghai Exchange this week.
As can be seen in the second chart, the gold withdrawals are occurring at a record pace.
This significant demand for physical gold is increasing, with what appear to be artificially low prices, that are doing what prices that are below a fair and efficient market-clearing price are theoretically expected to do,
The market cannot treat gold like one of the paper currencies indefinitely.
They may try to expand their leverage [gold hypothecation, leasing, futures, forwards, derivatives] freely, given the craven silence of the regulators and professional courtesy amongst the looting class.
But they cannot create more physical bullion, and therein lies their limits.
"It was miraculous. It was almost no trick at all, he saw, to turn vice into virtue, and slander into truth, impotence into abstinence, arrogance into humility, plunder into philanthropy, thievery into honor, blasphemy into wisdom, brutality into patriotism, and sadism into justice.
Anybody could do it; it required no brains at all. It merely required no character."
Joseph Heller, Catch 22
"Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy, the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days, my friends, will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves, to our fellow men.
Recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing.
Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live."
Franklin D. Roosevelt, First Inaugural Address, March 4, 1933
Heller might have been writing about our own day, and much of the analysis and 'expert commentary' on the economy and the markets. This is how it is in times of moral hazard, and general shamelessness among the worst.
Gold and silver drifted slightly lower in a quiet trade today.
The US Speaker of the House, John Boehner, unexpectedly has given up his place and is retiring from the Congress.
And yesterday, while reading off a set piece on the excellent quality of the economy, the chair of the Fed, Janet Yellen, appeared to suffer a bout of paralysis that was sadly disturbing. I was hoping it was just nerves and fatigue and not something more serious like a transient stroke.
I do not wonder why anyone is feeling a little less confident about things these days, perhaps even a little fearful. It seems at times as though the world has been turned upside down, as if the worst have taken over in their madness, and if the many good and innocent are powerless to act in their own defense.
There was intraday commentary taking note of Koos Jansen's latest analysis of Asian demand, and more specifically the buying habits of the People's Bank of China, and the London Gold market which you may read here.
As I have noted several times previously, October is a relative sideshow as compared to both the volume and open interest of the big month of December. But it does offer a chance for the parasitic class to play their paper games. If it had been a more active contract one might have expected a little more of a 'gut check' today for the contract holders. So I am still reluctant to read too much into the big rally yesterday and the slight retrenchment today and into the weekend.
Here are the volume and changes in open interest from yesterday in the first graph below. As you can see from the circled number on the right, the open interest for the coming month of December is 293,901 representing about 29,390,100 ounces of potential paper gold claims.
If one looks at the Comex inventory report on the second graph below you can see that there are currently about 161,937 ounces marked as registered 'up for sale as these prices' and a total of all gold in all the warehouses of 6,856,672 ounces, of which 6,694,735 are not offered for delivery into those contracts at these prices.
But let's be generous, and assume that JPM et al could manage to put another 500,000 up for sale near these prices and not bother about little details like price being a function of supply and demand, making the working total available for delivery at 661,937 ounces, which is a very generous assumption given the most recent levels.
If more than 2.3% of the contract holders stood for delivery, all of that generously assumed deliverable supply would be wiped out.
In fact, to put the question that Kyle Bass put to them, if something happened and only 4% of the contracts stood for delivery, that would require about 1,175,600 ounces of gold, against the 161,937 that they have on hand for sale today.
And even though it sounds like a lot, those 1,175,600 troy ounces of gold are only about 36.6 tonnes, a good week's work of physical delivery leaving the exchanges for other vaults in Asia.
Oh no Jesse you don't understand. NO ONE stands for delivery like that on the Comex, and if they did, 'price would take care of it.' Righto, that is what they said to Kyle Bass, and putting his common sense and fiduciary duty first he said 'just give me the gold now.'
If you are unallocated or hypothecated, given the numbers that have been estimated for physical demand in Asia against physical supply in London, you just might be walking on the wild side, taking your chances of getting your gold against some heavily lawyered up enterprises.
As I have said the other day, as foolish and greedy these jokers have proven to be, the lies will end when physical delivery fails.
"They can expand leverage [gold hypothecation, leasing, futures, forwards, derivatives] freely given the craven silence of the regulators and professional courtesy amongst the looting class. But they cannot create more physical bullion, and therein lies their limits."
No responsible trader wants to see that sort of stain on the confidence in the markets, but sadly most keep silent about the abuses that they see out of professional courtesy, and most often, out of personal fear of retribution. They only seem to speak up when they are losing money as in the case of the outrageous market manipulation of JPM's London Whale.
This financial system is sick, and is unfortunately and at an increasing pace approaching terminal.
I think the problem is due to a simple failure or 'lack of character.' It is an old story, and a perennial favorite of the madness of the dark powers of this world.
I have listed the traits that denote 'character' in the SP and NDX charts posting below.
Take a quick run through them, and ask yourselves, how many of those traits describe these markets, those in the leadership class, and those qualities which are most highly valued by our current culture? Or if that is too hard, how many of them sound embarrassingly old-fashioned or quaint?
And there you may find some answers to the source of our current difficulties. Be sure to apply them to ourselves, because 'in the end, the only real sadness is not to be a saint.' Or at least a sinner like most of us who is attempting great things, having renounced the spirit of darkness of the world, and received the Spirit of a son or daughter of light, and is therefore able to cry out in both fear and hope, 'Father!'
Traits and tendencies often found in the personality pattern that we call character:
integrity justness
honesty fairness
rectitude diligence
sense of honor carefulness
high moral standards prudence
conscientiousness restraint
trustworthiness tidiness
sense of duty willingness to accept blame
courage principled conduct
intelligence foresight
common sense perseverance
self-discipline stick-to-itiveness
self-control determination
self-denial unselfishness
self-reliance seriousness
self-sacrifice caution
thriftiness chastity
Character provides stability and confidence. When character fails, there is uncertainty and fear.
The estimate of US GDP for the third quarter came in higher than expected at 3.9% vs. 3.7% expected.
And so stocks rallied, for a while. But the enthusiasm for a recovery faded badly into the late afternoon, as people took stocks of the state of the world, and what they can see with their own eyes: a recovery largely restricted to a few in the ruling class and financial interests, and a global slump of demand.
‘I am sure that God did not intend that there be so many poor. The class structure is our making and our consent, not His.'
Dorothy Day
This passive-aggressive posture towards equities in general and risk in particular is because of the lack of reform to create a sustainable, stable recovery fueled by organic demand for growth based across a broader participation amongst the consumers.
You cannot have it both ways. You cannot subject the great part of a people to fear, repression, and enforced deprivation on one hand, and expect them to flourish and consume freely on the other.
“Capitalism is contradictory as soon as it is complete [unfettered]; because it is dealing with the mass of men in two opposite ways at once. When most men are wage-earners, it is more and more difficult for most men to be customers. For the capitalist is always trying to cut down what his servant demands, and in doing so is cutting down what his customer can spend… He is wanting the same man to be rich and poor at the same time.”
G. K. Chesterton
We are not a thing meant for the pleasure of another. We are made for joy, and all the fulfillment that it brings.
Let us pray for those whose hearts are hardened against His grace and loving kindness by greed, fear, and pride, and the seductive illusion and crushing isolation of evil.
We pray that we all may experience the three great gifts of our Lord's suffering and triumph: repentance, forgiveness, and thankfulness. And in so doing, may we obtain abundant life, and with it the peace that surpasses all understanding.
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