"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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After reading about the Greece situation, I now see how ridiculously overblown the whole thing is. There is no, repeat NO HARD DEFAULT on the horizon. The votes are there for a deal. The only question is the details of the participation rate and the stigma of CAC or no CAC.
ReplyDeleteIf they don't use the CAC, they could screw the hold outs entirely. That's what the market is freaking out about.
http://www.forexlive.com/blog/2012/03/06/we-get-a-psi-participation-rate-then-what/
Hi Dan
ReplyDeleteWould you please kindly explain to a layman like me how the manipulation of gold takes place when price is smashed down and short covering takes place, is it possible to put it in an example with dollar amount for the share and how they make profit on it, i greatly appreciate an example that fully explains the details of such market manipulation.
thank you
Dan, as always thanks for the poise and rationale you bring to the table at times like these. My gut tells me this paper selling cannot go on forever and I am wondering when the time will be that the scenario you describe will cause a physical shortage in the metals? Would that not be the logical end to the paper shorting because the seemingly limitless amount of paper will ultimately be met by a finite supply of real metal.
ReplyDeleteI think your quote on Jim's site alludes to this. It is friustrating to see how the technicals work so well for the bears on the downside, but when a breakout happens...look out. I thought last week that pretty much all we have to go on for the upside is fundamentals. Will the hedge funds allow the me sort of computer buying too? Sorry for the rambling...these markets are just really leaving me puzzled even though I have been following them for years. Best, Rod
I would like to thank Steve for his question – because it caused a debate – and also for his reply which I find touching.
ReplyDeleteWe are all on a learning curve – some feel that what has blatantly happened last Wednesday is part of something that has been going on for a while. I have been worried myself that “they” will drop the ball before I organize myself better – and to that I thank Jim Sinclair for the video clip of his question and answer period in Toronto, which I listened to on his site. “These guys” that are “intervening” are professionals. They have “their book”, and they know exactly where they are. I must say that I have never seen a turnaround in a situation like we have just lived. My imagination pictures the judoka who just flipped me onto my back – and it was HE that was in the losing position! OK they got a little help from their friends, and now what are “they” going to do? That’s where are this information that we are getting comes in. Andrew Maguire gave a must listen to interview about Wednesday. “They” took the prices down to where the big bids were at 1680 on gold, being very careful not to get too close to the bottom feeders who want their metal. Then came yesterday, “they” took gold down to feed the bottom feeders – so if you are a hedge and “THEY ARE HEDGERS” you just lost one side of your trade – the one that was burning a hole in your pocket – and now you dump the LONG side of your trade – which is STOCKS. Not exactly front-running, but “they” wanted to off-load – ease out – of the profitable side of their hedge at the best prices – the slower the better. So maybe we have not had the trend change in stocks yet – but the logic to own stocks at these levels is getting stretched and THESE GUYS know it. No one is better informed than them! So that’s why I feel easy, the Big Easy, kind of a Mardi Gras feeling that hey, these guys are still in control. Greece will pass, and so will the second and last shoulder on DXY as Jim has pointed out. Then Mother Nature moves back into the picture with a stiff East wind separating the waters as the survivors trudge their way Home. THESE GUYS as much as they would like to, cannot push PM to the point of breaking the back of the uptrend – too many eager hands are waiting for the crumbs to fall off of their table.
In engineering we were taught F=MA and you can’t push on a rope. The second may sound self-evident, but maybe they should teach it in Economics?
ReplyDeleteThis is a must reading by Eric Sprott:
http://dailyreckoning.com/unintended-consequences-3/
It looks like we are going to live “Trading Places” in real time. You know the movie with Eddie Murphy and Dan Aykroyd, where they figure out that they were duped by some rich clubby relatives. This film is a wonderful explanation of how the futures markets work, especially the last part of the film when they go onto the trading floor. What goes around comes around. The last shall be first and the first shall be last.
ReplyDeleteYou can’t push on a rope, but as anyone who has tried jumping on a trampoline knows, that you have to drive the TARP down to get the most spring. The protruding nail got hammered down – please refer to the Point and Figure chart “The Privateer” – but many manmade events do not turn out well.
As the Gospel tells us today in its parable: a poor man (beggar) named Lazarus, lay at the entrance gate of a rich man’s house; he was full of sores. He would have really loved to be fed the crumbs which fell from the rich man’s table, but it was dogs that came to lick his sores. Lazarus died and so did the rich man … Luke 16, 19-31. They ended up “trading places”. While you’re at it read all of chapter 16, it’s very instructive.
A few thoughts for today. I saw the results recently of Volkswagen AG which I looked at in awe: “Operating profit up significantly on prior year level at EUR 11.3 billion versus 7.1 billion.” No doubt about it, there is nothing better than German efficiency. Obviously other companies may be making more money, but here we are talking about the automobile industry – not exactly flourishing!
ReplyDeleteAnd a second thought. For those who didn’t see the trading in McDonald’s yesterday take a look at MCD. This stock has been a powerhouse for the Dow Jones, in 2008 at its best it traded 65+ and it has recently been trading above 100 – that’s a nice gain that someone just booked.
So when you hear bad things about the Euro, or how wonderful and safe it is to be in the stock market – draw your own conclusions – or maybe express what many on this site and related sites are trying to say – put some gold or silver aside for the rainy day.
More USSA news. Hirings up (BS). Employment picture improving.(BS) Smith and Wesson stock jumps 23% (Oh yes).
ReplyDeleteDollar up over 1% yet gold and oil jump. Unbelievable. I guess the strong news that the Masters of the Universe Goldman Sachs were able to steal all the Greek Bondholders money, while at the same time increasing Greece's deficit??? is all good news. This world and the Good Old USA are slowly breaching that area where the MSM, the Central Bankers, and the bullion banks better start to learn how to defend themselves. You cant lie to the Americans forever before they take their second amendment seriously. Go gold...Go Smith and Wesson.