"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
Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET
Gold Miners to Gold ratio rolling over
It has become axiomatic, for good reason, that the mining shares tend to lead the gold price whether they are moving higher or moving lower. For whatever reason, the connection is fairly solid and has been for many years.
That being said, the combination of a deteriorating chart for the metal and the fact that the ratio ( HUI to Gold) is rolling over, does not bode well for gold at the moment.
Take a look at the following chart noting the HUI/Gold ratio and comparing that to the Gold price ( dark blue line). Can you see the very close connection? You can almost lay the gold price atop this ratio and see where it is generally headed as the lines follow each other quite closely.
It is pretty accurate with some brief exceptions. I have noted one of those within the ellipse area in late July the shares seemed to hold up a bit better than the overall gold price. Come August however, the relationship seems to have been restored.
The indicator below is tracking the movement generating both buy and sell signals on the metal based off the action of the shares. As you can see, it is currently in a bearish mode.
Here is a chart of the GDXJ or juniors. It failed to extend past 46 and now looks like it is heading back down to the bottom of a potential range near 34-33.
Many ways to describe the action in the HUI:
ReplyDelete"Terrifying Collapse"
"Horrific Destruction:
"Final Endgame"
"Historic Panic"
"All Hell Breaking Loose"
"Financial Wipeout"
"Plunging"
"Tumbling"
etc., etc.
That should make some nice headlines for KWN the next few months.
LOL....
Mark: with headlines like those, you gotta send Eric a resume!
DeleteTrinity I think you missed the point.
DeleteIts a joke Prophet, from a previous blog...Just a light ribbing for Mark. He has been on the right market. And his descriptive headlines are similar in flair but on the opposite side of the market as than those seen on KWN.
Deletethe ags had big gains in open interest ZS ZC ZW yest. as they took out the contracts lows, as shorts piled in.... all are looking for the usda wasde report next week to move up to the crop sizes the private forecasters have come out with. the crop report that Dan wrote about, being about tied for best ever for the date in corn-beans, and we can't sell any wheat as france-ukraine-russia have lowered bids furiously trying to move some.
ReplyDeletethe long bond ZB has had a poor week, will the non-farm friday confirm those sellers were correct, or will we get dip buyers... sure to be interesting!
good bond guy: http://www.tradethemarkets.com/public/Do-we-fill-the-Rollover-Gaps-or-back-and-fill.cfm
major gold equities look to test their 'day of strength' of about the june 17-18 zone. today being the first 'accelerated volume down day' in the XAU HUI type majors would look for a poor friday and poor close of the week.
how 'bout them meats! mooooooo!
TGIF!!
Looks like there is a gap about to be filled from June 18-19 on the HUI...
DeleteLots of volatility in the meats today on the HE and LE contracts. this helps to explain the divergence in the HE contracts seen today...
http://farmfutures.com/story-livestock-call-john-otte-22-97489
Rolling sine waves until they are not.
ReplyDeletewow--that's deep...
Deletenibbled a tiny bit of MUX today, i know the GDX and gold are going to go lower, but its just a swing trade till tomorrow, just dying to get back into gold as i feel SPY has had its best time and double top around 200 wil lead to drop with higher USD, higher interest rates, geopolitics, and just general technical correction...i would love to buy some gold miners if gold flushes from 1180 to about 1000, then id probably go in hard into GDX..anyway, im starting to really consider getting out of general stocks, go to cash , and then jump into gold...
ReplyDeletehui and xau charts are a mess and you do not put Humpty Dumpty back together again next week for sure; what a trap last week for the kwn bulls; on a lighter note, I am playing Packers tonite +5.5 vs Dan's Hawks
ReplyDeleteYou continue to go against "The Legion of Boom" ,Danger, Beast Mode and Harvin. Please! Got to know when to to fold em!
DeleteSteve,
ReplyDeleteI would have taken the Hawks.... but would like the Pack to beat them.
http://www.mining.com/why-goldmans-gold-man-recommends-shorting-gold-51624/
ReplyDeletePerfect for tomorrow...
That's old news...
DeleteNot many sectors drop as fast as gold when the bottom falls out. That's why I like playing the rebound in the miners. I'll give it today, Fri., and Mon. then a solid rebound on Tues.
ReplyDeleteTake a quick look at the 60 day Silver chart and try kidding yourself this us going to bottom out any time soon
ReplyDeletehttp://www.kitco.com/charts/popup/ag0060lnb.html
ReplyDeleteKWN now entering the final stages of desperation by claiming the banks will collapse.
ReplyDeleteLast time I looked both XLF and KBE were in confirmed uptrends.
Last 3 years, Wells Fargo the biggest home lender on the planet, has risen from $24 to $52.
Last 3 years, Barrick Gold, the biggest gold miner in the world collapsed from $55 to $17.
That's pretty much it, in a nutshell.
Well I know my investment strategy has me buying things at all time highs and selling things after three year bear markets. Winner!
DeletePrice manipulation, Mark - that's all it is.
ReplyDeleteAnd the price is merely "painted" - Barrick shares are in fact remarkably scarce "at this bargain price" and are in fact being hoovered up by "strong hands" and "savvy money", to be sent East of Suez and never seen again
Wells Fargo, on the other hand, is merely a paper ponzi scheme run by the 1% as part of the fractional fiat shadow banking scam. Did I say "ponzi" yet?
The bottom is "in" and right now you need to Keep Stackin'
There is a hope of a short term bounce on silver if we hit 18.50 because of the inf bollinger band on the weekly time unit there, and this area being the real lows of 2013 in terms of prices.
ReplyDeleteBut...every time we bounced in this area, the bounce was lower and lower...longer term, for the moment, I completely concur with PCB : I don't see a bullish signal on the charts.
EUR USD.
ReplyDeleteThe slope is exactly the same as last time! Though red line could be support, end target will probably be at least 1.28 i.e inf bollinger band weekly time unit.
http://i60.tinypic.com/160vrtj.jpg
SP500 : it is difficult for me to post and update all my positions when the trade is very short term. At the moment I'm back to short 2 CFDs, not one, because of the sudden break yesterday, and the 1 hour candle charts which allowed me to put a stop loss at 2002. I won't give too many details on my positions when it's so short term moves, because it's too difficult to update all the time on the blog, and doesn't serve any specific purpose in terms of showing how T.A works.
LOS ANGELES (MarketWatch) — Gold prices moved lower on Friday as a strengthening dollar continued to weigh ahead of the U.S. jobs report later in the day.
ReplyDeleteAt last check, gold for December delivery GCZ4, +0.23% was down $1.50 to $1,265.10 an ounce. September silver SIU4, +0.35% shed 3 cents to $19.04 an ounce.
Gold has been rangebound through much of the week, hovering around an 11-week low even as traders grapple with mixed news on the geopolitical front.
Frank Holmes, CEO and chief investment officer of U.S. Global Investors, says that gold bugs should be patient because the seasonal tailwinds could kick in soon.
“September is historically gold’s best-performing month of the year, returning 2.16%, on average, since 1969,” he said, pointing out that the fact that it’s a tough time for stocks is only part of the reason. A spike in retail demand in India is another reason for the typical bump.
Elsewhere in metals trading, December palladium PAZ4, -0.66% lost $3.35 to $887.65 an ounce, while October platinum PLV4, +0.01% dropped $1.80 to $1,406.50 an ounce. High-grade copper for December HGZ4, -0.21% delivery added a penny to $3.16 a pound.
June is supposed to be the worst month for gold, and it did bottom early on in the month. But it rebounded throughout the rest of the month. September is supposed to be a good month, but it is looking sickly.
Lan, quite a well done piece. Even Denver Dave would be hard pressed to defend his 15-1 argument with you. Enjoy your weekend!
ReplyDeleteWell, looks like new lows for the move in GDX even though GLD not making new lows.
ReplyDeleteWe all know what that means.
On top of that Yellen is high fiving with the CRB Index collapsing to yet another new low for the move, she has a bigger cushion than ever to launch another stimulus program whenever needed.
In fact, if she launched another program, a 25% rise in the CRB Index thereafter would barely make a dent in its bear market so far, so there is ample room for her to move whenever she wants.
Looks to me that the "Central Planners" completed a heroic effort of banishing bear markets and recessions indefinitely.
I wonder if Gerald Celente has ever been on a cruise.
ReplyDeleteCheck out RCL (Royal Caribbean Cruise Lines) launching into Outer Space due to the consumer who has never been stronger, thanks to cheap credit and crashing oil and food prices.
And I wonder if any of the "Acclaimed Experts and 40-year Veterans" own a Harley-Davidson?
That stock is going straight up today, no doubt a sign of an improving labor market, as the market looks forward, LOL......
a nice pop in the beans and corn to gently re-sell into.
ReplyDeleteJust take the other side of any trade I make. You'll do well.
DeleteTGIF
No technical analysis here but IMHO the G/S ratio crap spun by some of the regulars over at KWN has always been flawed. Ultimately silver will be valued solely for it's utility as an industrial metal. Gold will be valued only for it's utility as a store of value (long term wealth). GSR's in the 80's will be remembered by the silver warriors fondly as the glory days for silver valuation. When the central banks of the world start accumulating silver and dumping gold I may reconsider my position.
ReplyDeleteWell, I'm still waiting for the "Terrifying Endgame of Destruction".
ReplyDeleteIt's been 2 years, haven't seen anything yet.
Lemme look, let's see, the S & P 500 closed at yet another new record high of 2,005 today.
With the 10-yr. at 2.4% and commodities everywhere in a full blown crash.
Everything still looks good to me.
Martin Armstrong is saying US markets will be headed a lot higher starting this week.
ReplyDeletehttp://armstrongeconomics.com/2014/09/05/russia-demands-ukrainian-troops-withdraw-us-sends-in-troops/
But, wasn't he saying just last week that markets would be reaching a temporary high this week and fall into October? Double speak?
Another lost opportunity in the consumer sector.
ReplyDeleteNike has rocketed from $19 to $82 and closed at a new, all-time record high today.
Yet some keep claiming that a "catastrophe" is dead ahead, watch out, buy gold, and get rich while everyone else suffers in the "devastating financial collapse"
All I can say is that the exact opposite has happened.
Way to go boys!!!
"Are Markets Manipulated All The Time?"
ReplyDeleteMartin Armstrong's answer...
http://armstrongeconomics.com/2014/09/05/are-markets-manipulated-all-the-time/
When you combine the above with the continued silence of the Dutch about the black box.
ReplyDeleteI can only say it stinks of manipulation. No idea who is doing what though. P
Good Morning
ReplyDeleteI have had just about enough of this Ukraine / ISIS /Syrian /Libyan /Russian /Chinese nonsense, and have concluded that it is now high time to change my Postcolonial ways
Would any other contributors/readers/habitual trolls like to join me in formally reconstituting this legendary (if, sadly, mythical) organisation? - http://en.m.wikipedia.org/wiki/International_Society_for_the_Suppression_of_Savage_Customs
Strictly no foreigners (especially not the French, though Americans may be granted Probationary status as affiliates) and no liberal-leaning lefty types (which I suppose means a divorce will be on the cards..... )
This American would be pleased to join you in exterminating all the brutes. Only two problems where to start and where to stop.
Delete"Strictly no foreigners (especially not the French).
DeleteFair enough, Mr Rosbeef :)
http://www.globalresearch.ca/exterminate-all-the-brutes-european-and-american-colonialism-and-imperialism/5399667
ReplyDeleteI think Trinity is right, this Mark fella could work for whoever the opposite of KWN is with the headlines he puts up.
ReplyDeleteNothing goes in one direction forever Mark. The Fed can only manipulate markets in the direction they want to short term.
Eventually natural market forces win always.
As Dan has shown on his charts, things want to deflate still.
The Fed is fighting the natural market forces of deflation all along here for years now.
This is the belief out there Zhang. If not for the stock market record highs there is no recovery.
DeleteIf the stock market crashes there is nothing to point to as a recovery. The work force is the lowest in 30 years. No recovery there.
The below is what the central banks are doing. Yes you can make money until the music stops.
"Ben Bernanke inexplicably took it on himself to convince stock traders the Federal Reserve was effectively backstopping the stock markets."
"I think Trinity is right, this Mark fella could work for whoever the opposite of KWN is with the headlines he puts up."
DeleteIts a conspiracy! We should ban Mark from posting!
Insane goldbug controlfreak cultists. We may consider ourselves very luck the wolrld isnt run by the likes of barney because they would turn it into north korea in an instance.
Apparently you miss the irony in your comments Jasper.
DeleteFinancial engineering of the stock markets is a controlfreak thing in that the central banks are not letting the markets be Free.
Marks comments below say it all. The central planners are controlling the markets direction.
"Looks to me that the "Central Planners" completed a heroic effort of banishing bear markets and recessions indefinitely."
Seems the equities liked the jobs report today. Also gold seemed to be supported by the report (at least it didn't sell off on the news of the Ukraine cease fire agreement). Lousy jobs report = perception of higher likelihood of a more dovish Fed = delay interest rate hike and lets keep the party going. With a jobs report miss like the one today, will be interesting to see how the Fed will proceed to finally end QE in October and for how long.
ReplyDeleteLooks like the HUI filled the gap today from June 18 and touched the 200 mda. Looks like a decent band of support at this level for the HUI. As Dan has been saying, Gold is in for an uphill battle as long as equities and the dollar are rallying.
Indeed Trinity bad news is good news for the stock markets same as it has been for years.
DeleteBad news just means more easy money for the markets.
The Fed desperately wants to end QE though and even raise interest rates a bit so they have some ammo to fight the recession that has never ended.
As Dan says deflation is still there and looks to be taking over again now.
Thanks for the links Lan.
ReplyDeleteUnfortunately, the bellicose people of Europe, who already started 2 world wars, are perfectly capable to start a third one out of their sheer stupidity.
Who today remembers this quote?
"Naturally the common people don't want war: Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, IT IS THE LEADERS of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is TELL THEM THEY ARE BEING ATTACKED, and denounce the peacemakers for lack of patriotism and exposing the country to danger. IT WORKS THE SAME IN ANY COUNTRY."
--Hermann Goering at the Nuremberg Trials
Yes Hubert, and as a result of the trials, many of the Nazis did not even serve out the full terms of their so called convictions, and were soon returned to their former positions in society and captains of industry and so on. And of course we all know about GE's, IBM, and Ford's roles in the years leading up to the War. Not exactly a bunch of choir boys.
Deletelol, you'll be happy to learn that this youtube link is not available in France.
ReplyDeleteI don't get in...it's in China that there is censorship, right?
Well...I'll wait to be back to Armenia next week to have a look at it.
SP500.
ReplyDeleteHere is why I'm insisting on making a speculative short somewhere around 2015-2020.
Monthly time unit : hitting the mlh sup.
http://i59.tinypic.com/120kltv.jpg
Weekly time unit : hitting the top of the upwards channel.
http://i59.tinypic.com/jb4tup.jpg
The daily / 2day time units show that there could still be some small upside potential from the current 2007.
the 2 day time unit is fine : around 10 continuous highs for now, if it could grow another 2 or 3 candles and reach slowly 2015+...without going beyond the long term resistances, I may have an opportunity to short with a close stop loss.
But...the upwards trend is simply very strong.
So, actually and honestly, I'm doing this FOR FUN and with a very small line, in order to do some "top picking" and say "I called the top on SP500!" and launch my 20.000 $ newsletter a year.
Anyhow, my short order is around 2017 for the next few days.
Hey Mark, I wonder if you would be so kind as to explain to me how the consumer (who has never been stronger, right?) has fueled the high valuations in the S&P.
ReplyDeleteIMHO the main driver for this artificial recovery has been the low cost of borrowing and executive greed. Stock buybacks are near all time highs. The only time corporate buybacks were any higher than Q1 2014 was in the first 2 quarters of 2007. :<) Corporations are skewing any supply and demand fundamentals by using debt (nearly interest free) to fund stock purchases which give the impression of demand and effectively lower the supply of available shares.
This cheap cost of borrowing has helped create an environment in which corporate debt loads are at all time highs. The tide is ebbing and this engineered economy has no britches!
Also, the flows are not just domestic but international.
DeleteIf US is being considered a safer place than Europe, SP500 will suck in more money.
Look at the DAX30 and SP500 recent performance.
SP500 is already above its previous highs.
Dax is still under it.
If SP500 breaches through my upper resistance near 2020, I'm out.
http://www.anderweltonline.com/wissenschaft-und-technik/luftfahrt-2014/shocking-analysis-of-the-shooting-down-of-malaysian-mh17/
ReplyDeletehttp://www.cbc.ca/news/world/malaysia-airlines-mh17-michael-bociurkiw-talks-about-being-first-at-the-crash-site-1.2721007?cmp=rss&partner=sky
Not sure about credibility here, the first one kind of looks like a KWN headline. As Zhang says, make up your own mind. :<D
you can trade on the theory of deflation and what is being sold in the media but for everyone else in the real world it is obviously not true.even cnbc had a few articles showing the increase in prices.
ReplyDeletejan.1/14 striploin steak at our costco $12.99/kg
july1/14 striploin steak $23.99/kg
Sept1/14 striploin steak $17.99/kg
Sure glad to get that pricing relief and that there is no inflation. seriously no sarcasm intended.Really
Noles14;
Deletemeat prices will be coming down in the 4th quarter and into the first quarter of next year. Grain prices are at 4 year lows.
Markets are by nature forward looking; not present or past looking.
In the real world, gasoline prices, heating oil prices have been coming down along with crude. Look at the price of cell phones, tablets, desktops and laptops and big screen TVs... all coming down in price.
What is going up is the stuff that the government interferes with like heath insurance and the cost of compliance with government regulation.
The reason we do not have any strong inflationary pressures is because wages are stagnant. Why are wages stagnant? Because we have an administration which is hostile to business and whose policies are choking growth.
If we get a chance in administration in 2016 to one which is more business friendly, I suspect we will have to watch for some inflationary pressures to assert themselves at that point but that is a good way's off at the moment and a lot can happen between now and then.
Dan- what are the driving force you see for lower meat prices in the 4Q? Is it lower seasonal demand? A little surprising how much prices have firmed up in the last couple weeks. Lean cattle are back to their previous highs. Lean hog prices are rallying too. Longer dated lean hogs sold off on the announcement of the new vaccine for PEDv, but prices rebounded a day later. Seems the market in pricing in tight supplies.
Deletelive cattle not lean cattle...
Deletetrinity trader;
DeleteI am of the view that the high price of beef is going to kill demand as chicken producers are ramping up production because of cheap feed costs. Hog guys are probably in an expansion mode as well as profits are too tempting to pass up.
For now the trend in cattle is strong as those tight supplies are going to be with us for a while as the herd rebuilds but restuarants cannot pass on the higher costs without cutting the size of the portion or they will lose business traffic.
Throw in a higher US Dollar and US beef is incredibly expensive on the export market front.
One cannot fight the trend in cattle for now and make money but at some point demand will taper off.
I am optimistic that the two new approved vaccines for pedv and continued enhanced biosecurity measures will help with that terrible disease. A large Utah hog farm ( one of the biggest in the nation) got hit with PEDv recently. The disease is still out there and will be a factor but the heavy weights are helping to offset some of the impact from reduced slaughter numbers.
Livestock markets are treacherous and can turn on a dime with little to no warning so one has to be very careful ( and ALERT) when trading them.
Ok that makes sense (demand). with herd expansion would have a delayed effect on supplies 1-2 years out?
DeleteYes hopefully the disease can be stemmed - it would make the large animal veterinarian's job a little easier (the vets trying to treat this issue are in a unenviable position) and lower food costs for us omnivores. MAybe the Utah farm incident is part of the reason for the rebound in hog prices.
As volatile as these markets are, I can understand why have the limits up and down.
And in today's online version of the Wall Street Journal an article clearly saying "...the aircraft was shot down by a missile from rebell held territory".
ReplyDeleteHi Dan I appreciate your reply.i own a construction company up in canada.its a small family run business and I can tell you not one item we use in the course of business has come down in price since 2000.i am telling the truth.when oil plunged from 150 to 30 in 2008 I thought we would see some prices drop.not ONE item did.everything has gone up in price except what we can charge.we are always busy but our pricing power has been held in check.i know this is a trading blog and people trade on what the trends are but i guess my point is in real life the middle class is being whittled away.
ReplyDeletenoles14;
DeleteNo argument whatsoever from me on that point my friend. Most of the people I Know are having trouble keeping up because their wages are flat. Property taxes, fees, insurance costs are all up. Meanwhile the cost of electronics is coming down. It is a mixed bag. Some stuff is going up, some going down.
Business is trying to keep its profit margins and thus have been reluctant to hike wages or in many cases, even pass on increased costs to their customers choosing to eat the difference.
I can tell you first hand that one of the things that irritates me is that certain items are always slow to come down in price, if it all, even when those input costs are dropping. Case in point is dry dog food. That stuff is outrageous in price. The grains that are used are definitely coming down and will help but the meat or protein inputs are very slow to come down in price ( you mentioned beef). Also, plain bird seed is ridiculous. It should be trading at least 10% below where it was a couple of years ago but it is not.
The market perception of all this seems to be indifference. One looks at that TIP spread and it is showing declining inflation expectations but at some point, if the economy is really gathering some steam, it should shift. The wage thing is the problem.
That will have to change if we are to keep a middle class. Folks can buy their electronic devices much more cheaply than ever but it is the other stuff, like insurance, medical costs, fees, taxes, school tuitions ( for those in private schools), etc. that keep going up.
In other words Noles and Dan, everything one needs daily to survive goes up in price for years now and what one does not need to survive goes down in price.
DeleteKeeps wages from rising too by under reporting inflation.
Of course the items one needs to survive seem to be mostly ignored in the inflation stats so they can claim inflation is below 2% and this allows them to continue with their easy money polices.
I agree Dan.it just always seems like the wrong things go down in price.not to belittle the wealthy or be envious of them but it is amazing how the 70 inch big screen tv is one of the items that has come down in price.hmmm
ReplyDeleteAnyways have a good weekend.i am going to enjoy a BBQ today and go to a football game with my son and some friends.that is a lot more affordable up here in Canada than down there.i was blessed with the opportunity to visit Jerry's stadium last week for the FSU vs OSU game.WOW talk about pricey.almost needed a second mortgage for that cowboy cheesesteak and a pop.
This weekend is the 6 year anniversary of the failure of Fannie, Freddie, and the FHLB.
ReplyDeleteSoon thereafter, the "Central Planners" would engage on the most fantastic money experiment in world history, which would end up being a resounding success.
Here we are, 6 years later, with the S & P 500 at new highs, the 10-yr. yield at 45 year lows, grain prices crashing, crude prices crashing, and the most liquid and continuous credit markets ever experienced.
Now that the Central Banks have such a huge buffer, they are now free to continue the "Infinite Fiat" experiment indefinitely, as there is now no reason whatsoever to discontinue what has worked magically the last 5 years.
In fact, there may be absolutely no willingness to turn off the spigot for the next 10 - 15 years.
Any little problem like Ukraine, Gaza, Iraq, etc. will simply be met by more "Infinite Fiat".
And yes, there is the possibility that inflation could rise, just like it did from 2010 - 2011, but the "Central Planners" will dismiss this and simply claim that printing even more money will eventually produce lower prices as we saw in 2012 - 2014.
So that stage is pretty much set.
No end to the bull market for the indefinite future.
If anyone has any doubt, just go to Yahoo Finance and pull up a 20-year chart of Argentina's Merval Index, which is now approching 12,000 after making a low of around 250 in 2001.
As Tim Wood used to say, "You Have Been Warned", LOL!!!!!
Wait a minute Mark, how is the Fed going to unwind the multi trillion debt balance sheet?
DeleteMandate rollover of all those low interest billas notes and bonds?
DeleteNope.
Got any ideas folks?
Odds are they are just going to keep rolling all those trillions of dollars of bonds over, this is a one way trip,
Deleteunless there is actually a real recovery going on here?
Either that or try and reverse repo them onto someone elses balance sheet temporarily and then buy them back later.
The difficulty I see in both rollover and reverse repo is the these debts are still earning interest. A simple increase in interest rates makes the debt service unsupportable as the shorter term instruments rollover to new higher interest rates. What earns a fraction of a percent now could earn several percent quite quickly.
DeleteTo counter this we need increased federal goveremt income without taxing people to oblivion. This means business growth without increase spending on other programs.
Don't see how this can happen in the current anti-business pro intervention environment or any of the likely successors.
Pay off debs and interest with fresh created money. Keep reporting low inflation. Problem solved.
DeleteBingo Michael, the way it's always done. You inflate them away....print, print, print,....
DeleteInteresting points.
DeleteSeems they will keep trying to delay raising interest rates then and hope growth finally comes.
If not try to keep the same game going or give up and let it all deflate.
Mark, the low in the 10 Year was made over 2 years ago.
ReplyDeletehttp://www.mrci.com/pdf/ty.pdf
Steve, yes your are correct, however the 10-yr. yield is still at the lowest end of the range in the last 45 years.
ReplyDeleteThe ultimate low 2 years ago during the EuroZone crisis was a 60-year low, LOL....
By the way, to answer everyone's question:
What happens when the Fed unwinds?
Or interest rates increase?
Answer: Nothing.
Why? Because the Fed will simply print more money and drive interest rates down even further, just like they did in 2014.
There is NO REASON WHATSOEVER for the Fed to unwind anything.
They can simply print to infinity, as they are accountable to no one.
And so far, no need to stop as long as interest rates and commodity prices stay low forever, via "jawboning" and spooked Algo/Robo/Igor hedge funds who sell any commodity in an instant upon rumors of Fed intervention.
Never before has Central Banking been so easy.
Greenspan and Trichet are probably kicking themselves for not launching this program earlier, that way they would have received the credit for the economic boom and world record run in stocks.
Your just trying to be funny right Mark?
DeleteYou don't actually believe your statement below do you?
"They can simply print to infinity, as they are accountable to no one."
Is the Fed not accountable to the foreign countries that hold trillions of dollars worth of US treasury bonds?
What of foreign countries started to dump them and sell them into the market as they got tired of money printing?
I am unaware of the mechanics that get the money into the goveremt shads to pay the interest.
ReplyDeleteThat said I fear you may be right.
Mark said "They can simply print to infinity, as they are accountable to no one."
ReplyDeleteThey are accountable to the end users of the dollars they are "printing". This dollar based system is losing credibility and I fear that it's customers will demand changes in the way it is managed. That is when Yellin calls Ben to borrow his helicopters. How can all the major world currencies devalue at the same time?
Right now the market is laughing at the bond bears and dollar bears.
ReplyDeleteHow many times have we heard about "unsustainable deficits" and "currency wars"?
Only to result in an immediate slingshot higher in U.S. Bonds and USDX.
At the moment, the trillions in U.S, Bonds and U.S. Dollars is not enough, there is an acute shortage of both, ergo driving prices higher and higher.
The market has spoken.
The herd is always the last to figure it out.
DeleteNasdaq bubble bust
Housing bubble bust
There were lots of warnings before they burst too.
The talk back then sounded just like the talk now.
No barneyb6, this time they have it all figured out. Janet is a student of the 2008 crash and knows how to keep pumping that liquidity. :<D
DeleteExactly Gene and also they have learned from 2008 never raise interest rates into a bubble or it bursts.
DeleteRecall pre 2008 the Fed raised interest rates to try and cool things off and the whole thing imploded.
The "market" can change it's mind quickly. Don't all these paper claims floating around eventually start bidding for real stuff? When is more paper not enough?
ReplyDeleteCurrency markets just opened.
ReplyDeleteU.S. Dollar gaps away again, to the upside.
Another "Cataclysmic Great Unwind and Meltdown" for U.S. Dollar bears.
I'm still not saving in them. BTW what role do savings play in this magical, mystical central banking nirvana? Probably be outlawed?
Deletegrains 'traded' a 'frostier' forecast friday than currently tonite, giving some funds courage to do their burst of buying, or was it short covering.
ReplyDeletemixed calls tonite:
ADM InvestorServices @TradeADMIS
"Mixed to lower grain calls this evening."
if the crop condition report is monday nite, gotta think the same ZS ZC result as last week, gonna be near record conditions for the date.
ZS nov needs to get over the string of lows from 8/26-9/2 at 1020-00, if it gaps down tonite will be looking like the downtrend is still intact... when beans hit 1038-00 on 9/2 it couldn't get over that string of lows there at 1038-00 from 8/14-22, kept the downtrend intact.
ZC dec needs over the former contract low at 358-00, if it gets over there more short covering can occur, if not the downtrend is intact.
british pound huge gap down tonite on scotland secession fears, us dollar should be firm.
people in India don't think much of gold:
http://www.thehindubusinessline.com/features/investment-world/real-assets/outlook-turns-bleak-for-gold/article6388629.ece
cheers!
John "Big Mac" Williams must be really sucking wind.
ReplyDeleteAfter repeatedly predicting hyperinflation, we have seen the steepest, fastest crash in commodity prices since 2008, and a resounding sign of strength in the U.S. Dollar.
Never before has the world financial markets benefited so much from a thirst for paper and a disdain for hard assets.
As an example, just look at the once in a lifetime gains in PIIGS debt since 2012:
As an example, Portuguese bond yields have collapsed from 16.5% to 3.0%
Italian bond yields have plunged from 7.2% to 2.25%, now lower than U.S. treasuries.
Never before has so much wealth been created in paper assets, simply extraordinary. Those investors can now cash out, use the money to buy an income property, and retire, never looking at a trading screen again.
Another person who bought gold and silver during the screams of "This Is It!! and It Is Now!" in 2012 have lost so much they will never be able to retire. They pretty much experienced the "Endgame" of their dreams of retirement.
Mark unfortunately is correct about this. I'm glad I learned some good market lessons here in my mid 30's - rather then closer to 65 and approaching retirement betting on what appeared to be a "sure shot" - if there is such a thing in investing/trading.
DeleteI think gold and silver will rally again but unlikely those who got creamed will ever touch a precious metal again.
Marks comments are almost too stupid to be stupid, I think he knows its all a fantasy. Hes just trying to get people to comment.
Deletebarney how about some hard numbers - my 98K investment in gold was worth 180K in 2011.
DeleteToday it would be worth 20K. I jumped out with a small profit, and not sure what my mental state would be right now if I hadn't let go when I did.
I can't imagine sitting there at 65 looking at my decimated account contemplating a second job to make up the gap.
Oh and thinking about how I was just victimized by the gold bug community - which by the sounds of it has always been around duping people out of hard earned money.
DeleteNobody had to lose money in gold investments if one had the discipline to sell into strength just like you should do with any investment. And its a cop out to blame the " gold bug community " when you should have been doing your own due diligence.
DeleteOh I see Prophet, so what you are saying is gold did you wrong but the Dow and S&P will never do you wrong and will never crash or correct again?
DeleteIts just up always now for the Dow and S&P in this great economic recovery right?
Gold did you wrong but the S&P and Dow rise is forever real and lasting right?
We can just hold forever now? The Dow and S&P will never do anyone wrong like gold did?
Oh and like KJM said why did you not sell your gold at the top in 2011?
DeleteOr did you think someone would ring a bell and tell you it was the top?
No one is going to ring a bell for the Dow and S&P top either.
If the Dow and S&P crash you will all be as mad at it as you are at gold right now.
Nothing goes up in a straight line forever people, get a clue.
And one more here.
DeleteImagine some one posting here another record high gold it can never go down.
Same thing for gold it won't go up forever either and didn't as of 2011
Gravity always wins on earth no matter what market it is.
Amazing how people love whats up at record highs and hate whats going down.
When one goes to the grocery store do you look to buy at record high prices for your groceries?
Only in the stock markets do people like to buy at record high prices, its the way its always been.
Cause i wasted too much time at jsmineset
Deletebarneyb6 and kjm;
DeleteYou two need to knock it of already. I can count on one hand the number of people who sold gold at the exact top so any inference that both or either of you sold at the exact top is a load of crap.
Most people were bullish gold even after failed to make it back above $1800 after several tries. The trend was still up until it broke down below support at $1530. That is when it entered a bear market. Most every gold oriented web site out there was still singing the praises of the metal as it continued to move lower and lower. They still are today.
Only those who studied the charts and sold when it failed to hold major support at $1530 managed to prevent far deeper losses than they would otherwise have incurred had they bought and held the metal.
The gold perma bulls gave no warning to anyone and still do not. They are Johnnie one notes.
There are only two kinds of people who sell at the exact top - liars and newsletter writers who tell everyone AFTER The fact that they sold at the exact top, which puts them in the same category as the first group.
Let it go already. I am getting worn out reading your backseat driving.
Sorry Dan, I was not claiming I sold anything at the top.
DeleteJust making the point when something crashes everyone hates it and when something is up everyone loves it.
We now have Dow perma bulls and gold perma bears.
And very few warned that housing and the Dow were going to crash and the few that did were laughed off the Tv pre 2008
The real fleecing will come when these mainstream markets that ma and pa and JoeSP are "saving" in come crashing down. Those who invested in goldish paper (gold stocks, GLD, paper futures, etc.) for the most part are risk taking investors anyway. Most of the ones I know are doing fine (including me).
DeleteMost of the traders here will be fine as they will pay attention to the technical signals and sell (or short) when the charts tell them to. To the extent that Mark relives the past 4 or 5 years (over and over again) or states that the charts are telling him to stay the course you'll get no argument from me. He is right. Statements like "the consumer has never been stronger", or "central banking has never been so easy" are however, laughable. I also thought (like barneyb6) that Mark was being sarcastic.
In my work environment this engineered stock market recovery is actually starting to help. The wealthy clientele I deal with are starting to spend some money. There is a chance that this could eventually "trickle down" throughout the economy but it hasn't yet.
I would love to be proven wrong about my worldview but I haven't seen anything yet to convince me the Janet has it all figured out. For now I'll keep working and stacking (real not paper). :<D
"Amazing how people love whats up at record highs and hate whats going down. When one goes to the grocery store do you look to buy at record high prices for your groceries?"
ReplyDeleteBarney, first watch this :
https://www.youtube.com/watch?v=uAXtO5dMqEI
Now : trading is not buying something at a grocery store that you will eat, not resell later. What is the truth? Price is not so important. Direction is important. If prices go up, we buy. When they start going down, then we sell with a profit. And we buy with a nice stop loss, so that the risk reward ratio makes such decisions profitable on the long term.
It is really that simple.
oh, look, another spam bot!
ReplyDeleteThose bots and their stupid websites seem to be spreading faster than Ebola!
Once you are in one of their databases, they invade your blog like an army of cockroaches. Blogspot help us all!
Crude oil breaking major support and uptrend line for the last 4 years.
ReplyDeleteWhich only means more spectacular gains for retail stocks and airlines
Cant believe oil is falling apart like this with all the war tension. Just goes to show you follow the charts not fun-dumb-mentals.
DeleteMaybe my prophesized rip your face off hulkamania rally in energy will be put on hold afterall
GDX new lows for the move.
ReplyDeleteGold Bugs savings could be "destroyed overnight", if that support level gives way, LOL...
ReplyDeleteGold Bugs savings could be "destroyed overnight", if that support level gives way,
DeleteAnd why would that be funny Mark?
S&P Bugs could be destroyed overnite too.......hopefully not, but nothing is impossible in the markets.
Whats left of gold bug savings after listening to the liars and frauds leading the gold bug "community" over the cliff could be destroyed too.
DeletePM prices goin' down, down, down...PM prices, oops! about to slip down...
ReplyDeleteCargo Cult over at Turdland growing ever more bumptious, with now truly wacky material (like AM, who lives in his parents' basement in Olde Dublin Towne...or maybe it's Passaic, N.J....).
Keep Stackin'!
Hi all,
ReplyDeleteFor the record, I've just bought the second 1/3 of my short position in gold (1314 $) at 1253 $, as planned. I'm keeping the remaining 1/3.
P.S : I'm waiting for silver with a buy order in the 18.40-18.70 area.
DeleteHere is the chart regarding gold.
DeleteRed channel.
short near the resistance, buy at the support, especially when it meets the inf bollinger band 100 period, i.e the bollinger band of the weekly time unit, and the daily inf bollinger band as well.
http://i58.tinypic.com/okbolx.jpg
found :)
ReplyDeletegood clean trade Hubert
ReplyDeleteOnly a few more pennies before TRX goes on sale at $1.99
ReplyDeleteMeanwhile, GoPro is now over $62
Soon to dump XLE and go back to XLY as one of my allocation choices. Not gonna fight the tape.
ReplyDeleteGDX just took out it's 200 day to the downside, joining the metals which (oddly) preceded it.
ReplyDeleteDefinitely some nuclear bombs going off at Sprott, Matternhorn, First Eagle, U.S. Global, and all the other funds investing in gold or currencies.
ReplyDeleteTotal and complete destruction today.
Who said that things don't go up in a straight line?
ReplyDeleteUSDX is doing just that.
Simply phenomenal.
Hi Dan,
ReplyDeletecould you please tell me which indicator is shown on the above charts?
Thanks,
Kris