Gun Free Zone Shooting - Yet Again

I am including this link because I hope you have had the time to view the short (less than 2 minutes) video at Youtube which is at the link shown below in the previous post.

Mocking the stupidity of something is a good way to show the absolute uselessness of it as a means of actually saving precious lives but even though many of us at this site can hopefully understand that the main goal is to actually PREVENT innocents from being murdered, there still exist too many in this nation who opt for SYMBOLISM OVER SUBSTANCE. Such fools continue to advocate for laws which accomplish nothing except to disarm law-abiding citizens and strip them of the means to defend not only their person, but those around them.

Here is the link containing the headline: As a sideline, more years ago than I care to remember, I actually took a couple of courses at this very location.

http://www.breitbart.com/Big-Government/2013/01/22/Another-Gun-Free-Zone-Another-Shooting-This-Time-In-Texas

Happy Days are Here - A Cure for Gun Violence has been Found!

http://www.youtube.com/watch?v=wAFAywYZK-M&feature=youtu.be

Bank of Japan Rally

The big news today is the long-awaited but pretty much expected response by the Bank of Japan to engage in further stimulus measures by basically committing to open-ended purchases of government securities and setting an inflation target of 2%.

The idea is to stave off the deflationary funk that has gripped Japan for well over a decade and more with the deliberate intent to further suppress the value of the Yen on the foreign exchange markets.

Because the purchase commitment seems to have been pushed into 2014 before it begins in earnest, speculators did the exact opposite of what the new government was attempting; they shoved the Yen higher shortcircuiting its steady downward trend.

Now we will have to wait and see what happens next if the Yen continues appreciating instead of depreciating as they had hoped for. If the specs defy the intent of the powers-that-be in Japan and refuse to get on board with the program, my guess is that we will see a public response by the Japanese monetary authorities as their political bosses, not to mention INDUSTRY LEADERS, will pressure them to undercut any Yen strength.

Traders outside of the forex markets are looking at the move by the Japanese as highly inflationary elsewhere which is perhaps the main reason behind the mvoe higher in both gold, silver, copper, platinum and palladium today.

It is ironic however to see the Yen moving higher over disappointment that the Japanese did not adopt an AGGRESSIVE enough policy to induce further yen weakness and by consequence higher inflation while at the same time the metals, both precious and base, were moving higher on expected inflation coming down the road.

Throw in one more weird day in the long bond as interest rates actually moved lower even while the equity markets continue with their giddiness. Nothing fazes the bulls on Wall Street right now and I do mean, nothing. Paper asset inflation is alive and well.

I wanted to show you a weekly chart of the Silver market over at the Comex to give you an indication of where this thing is in the larger scheme of things.

Notice that the pattern shown continues to constrict with an upward bias to it. Can you see how significant that the region beginning from $34.50 up to $35.00 has become?

Silver is currently attempting to make up the losses it incurred in December of last year. It began that month near $33.50 and then fell down below $30 hitting a low near $29.25 before rebounding slightly to end the year.

It is currently about $1.20 lower than from where it started December 2012. If talk about silver shortages to the extent that are being rumored is true, then this market will CONFIRM those rumors by launching a breakout on this technical chart and that means, at a bare minimum, a solid breach of $35.50 on a weekly closing basis. For now the chart bias is not wildly bullish but it is friendly as the market is in a consolidation pattern with a slightly higher bias.

As stated previously, higher platinum and palladium prices are tending to reinforce momentum based buying in the silver market. It also aids the cause of the metal that the soybean market is responding to some potential weather issues in South America with prices moving higher over at the CME group futures. A very large crop is expected from down that way this year so traders will be monitoring any indication that the weather might impact yields and thus overall supply. Rising grain prices tend to keep upward pressure on the Continuous Commodity Index ( CCI ) and thus helps silver as traders buy on the expecation of inflation pressures at the wholesale level.

Excerpt from Reverend Martin Luther King's "A Knock at Midnight" Speech

I wonder what Dr. King would be thinking were he alive today to survey the current age in which moral relativism seems to now be the rule rather than the exception. By that term, I mean the notion that one man's morality is as good as the other's. That "sin" is in the eye of the beholder and that there exists no absolute measurement as to what constitutes right and what constitutes wrong or sin.

Here is a powerful excerpt from that famous speech which I highly urge readers of this site to take time to review and carefully consider:

"It is also midnight within the moral order. At midnight colours lose their distinctiveness and become a sullen shade of grey. Moral principles have lost their distinctiveness. For modern man, absolute right and wrong are a matter of what the majority is doing. Right and wrong are relative to likes and dislikes and the customs of a particular community. We have unconsciously applied Einstein’s theory of relativity, which properly described the physical universe, to the moral and ethical realm.

The entire speech can be read here at the following link:

http://mlk-kpp01.stanford.edu/index.php/encyclopedia/documentsentry/doc_a_knock_at_midnight/

In honor of Martin Luther King Day

Following is a quotation from this CHRISTIAN PASTOR while he sat in a Birmingham, Alabama jail cell. It is of course taken from what is now famously termed, "The Letter from Birmingham Jail".

Here is one excerpt:

You express a great deal of anxiety over our willingness to break laws. This is certainly a legitimate concern. Since we so diligently urge people to obey the Supreme Court's decision of 1954 outlawing segregation in the public schools, it is rather strange and paradoxical to find us consciously breaking laws. One may well ask: "How can you advocate breaking some laws and obeying others?" The answer is found in the fact that there are two types of laws: There are just and there are unjust laws. I would agree with Saint Augustine that "An unjust law is no law at all."

Here is yet another:

Let us turn to a more concrete example of just and unjust laws. An unjust law is a code that a majority inflicts on a minority that is not binding on itself. This is difference made legal. On the other hand a just law is a code that a majority compels a minority to follow that it is willing to follow itself. This is sameness made legal.
Let me give another explanation. An unjust law is a code inflicted upon a minority which that minority had no part in enacting or creating because they did not have the unhampered right to vote. Who can say that the legislature of Alabama which set up the segregation laws was democratically elected? Throughout the state of Alabama all types of conniving methods are used to prevent Negroes from becoming registered voters and there are some counties without a single Negro registered to vote despite the fact that the Negro constitutes a majority of the population. Can any law set up in such a state be considered democratically structured

And yet her is one more:

Of course, there is nothing new about this kind of civil disobedience. It was seen sublimely in the refusal of Shadrach, Meshach and Abednego to obey the laws of Nebuchadnezzar because a higher moral law was involved. It was practiced superbly by the early Christians who were willing to face hungry lions and the excruciating pain of chopping blocks, before submitting to certain unjust laws of the Roman empire. To a degree academic freedom is a reality today because Socrates practiced civil disobedience.


Notice how Dr. King drew on the idea of natural law or a higher moral law as he terms it. It is on this basis that an unjust law is no law and is therefore to be disobeyed.

You will also notice that this letter is chocked full of references to the Scriptures. It makes me wonder if Dr. King would even be welcome in today's Democratic party which just this past year was determined to strip any reference of God whatsoever out of its official party platform.


Here is the link to the entire letter. I highly recommend that it be read in full as it is rich with insight.

http://users.wfu.edu/zulick/341/birmingham.html

Trader Dan Interviewed on King World News Metals Wrap

Please click on the following link to listen in to my regular weekly radio interview with Eric King on the KWN Markets and Metals Wrap.

http://kingworldnews.com/kingworldnews/Broadcast/Entries/2013/1/19_KWN_Weekly_Metals_Wrap.html

Do You Support "Individual Freedoms"?...

Then guess what - according to a study done by a West Point "Think Tank" funded by none else than your own taxpayer money, America needs to be warned against you and those like you! Think I am making this idiocy up? Read the following link:

http://www.washingtontimes.com/news/2013/jan/17/west-point-center-cites-dangers-far-right-us/

Yes, instead of studying the tactics of Islamic terrorists or digging deeper into the brilliant strategies of Alexander the Great, Genghis Khan, Julius Caesar, Hannibal, etc., what apparently is the now pressing need of US military officers is how to deal with all those folks who actually subscribe to something called "A Bill of Rights"!

My goodness, this very phrase, "Bill of Rights" is terrifyingly dangerous now is it not? It sure as hell closely resembles that dangerous belief cited in the study as "individual freedoms" YIKES!

Here in a nutshell is the conclusion that this nonsensical study has come to... are you ready? Here it comes:

LIBERALS/PROGRESSIVES = GOOD
CONSERATIVES              = BAD

It wasn't enough that the left has taken over the schools and institutions of higher learning and used those to spread its political correctness lunacy. One would have thought that at least the military academies would be immune from this. Apparently not.

Wake up folks.... the day appears to be coming sooner than many of us expected where even allegiance to the basic freedoms and rights prescribed in our Founding documents is enough to make you an enemy of the state.

Yes, if you cherish individual liberty, limited self government and a system of Federalism as laid out in the Constitution, you are now included in the same class as those who would advocate a violent overthrow of the US government.

Commodity Complex Showing Signs of Life

The following chart of the Continuous Commodity Complex or CCI, shows a downtrending channel that has held the complex for the last several months. In November of last year, the index broke through the 50 day moving average and remained ABOVE it for more than a week before succumbing to selling pressure heading into the end of last year.

Early this year it was trading below both the 50 day moving average and the 200 day moving average. As of today, it is now back above both and is also nearing the downsloping line that marks the top of the trend channel. It is no surprise therefore to see SILVER looking very strong on its chart right now especially with the very bullish patterns on the platinum group metals showing no signs of abating for the immediate near term.

Were it not for the weakness in the grain complex this morning, the CCI would be right on that line at the top of the channel. Let's watch this action very closely as it will indicate whether these incipient signs of life in the commodity complex are the beginning of a period of sustained upward trending moves across this sector.

Keep in mind that in spite of the massive injections of liquidity by the Central Banks of the WEst (I include Japan in this category), commodity prices have heretofore been rather unresponsive. The reason has been that traders were initially more fearful of a global slowdown than they were of any inflationary result. Based on the jobless claims number this AM here in the US and data from other global regions, that the slowdown fears are receding and growth expectations are solidly in place. In other words, it appears that for now, the Central Banks have won the battle over deflation.

So what does this mean for commodity prices? Simple - based on the charts, and the action in the interest rate markets (more on that later), traders are speculators are beginning to transition towards the growth play (RISK ON) and away from the slowing global growth scenario (RISK OFF).

Watch that solid blue line that I have marked as RESISTANCE near 575 - 577. If this index pushes FIRMLY past that line, we will know that the price of wholesale commodities in general are going to begin a sustained rise higher. This should further unleash bullish forces in the precious metals but especially in silver compared to gold.

With this in mind, take a look at the chart I have constructed below. It is a ratio chart comparing the level of the S&P 500 ( a broad view of the US equity markets) to the level of the US Long Bond. I use this as a type of indicator to help me discern where money flows are heading and whether or not speculators have an appetite for risk.

Notice since late in 2011, the trend has been in favor of equities over bonds. Yes, there have been periods within this trend where RISK has been out of favor leading to money flows out of equities and back into bonds, but the trend is pretty solid. What I wish to point out especially however is that the ratio is accelerating and has been since late spring of last year. It has increased even more sharply since fall of last year. Any wonder why the equity markets are shooting higher? Hot money is flowing into equities at the expense of bonds all in anticipation of GREATER RETURNS in this ultra low interest rate environment.

In this light, can you understand why we now have a top in the US Long Bond? As mentioned in a post a while back, I would be surprised by a RAPID, SHARP DROP in the long bond as the economy is certainly not strong enough to sustain any pressure from rising rates. At the same time however, I expect to see a SLOW GRADUAL GRIND LOWER which will accelerate as the impact from all the liquidity created by the Fed's QE programs begins to gather steam and inflation expectations increase.

I want to also emphasize that I expect significant difficulties to arise once the Fed attempts to unwind its balance sheet. Personally I am beginning to wonder if they are ever going to be able to do so?

Note on the chart that bonds have fallen to major chart support but managed to eke out a return above that level and are currently holding. However, their rally off the level looks weak. Watch out if this support level gives way on a weekly basis close, as it will entail the definitive shift away from deflation fears and shift the balance of power to the hands of those looking for inflation as the next worry.

Once such an event occurs, I would anticipate a solid move higher in silver in particular.