"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


Thursday, July 21, 2011

Another leaked news story suggesting a deal on the debt ceiling

Here we go again! Tuesday it was comments from the President that some progress was being made on the debt ceiling negotiations that derailed gold and sent the US equity markets in a tizzy to the upside. Yesterday, that was walked back as things were once again at an impasse. Today another story hits the newswires that a deal is in the works again. Down goes gold; up go the equity markets and down goes the Dollar.

Only in America in the age of hedge fund computer algorithms could we get an upside reaction in stocks and a downside reaction in gold on news that the US could get the greenlight to plunge itself ever deeper into a morass of indebtedness as its financial condition further deteriorates and works closer to looking more and more like that of a banana republic.

Apparently in this brave new age of unlimited indebtedness, safe havens are only needed when it appears as if a country might actually attempt to hold the line on its spending problems and work towards balancing its budget like the rest of us ignorant clods who still attempt to run our family budgets in a responsible manner. Excuse me for not becoming part of the cheerleading crowd who equate more indebtedness with a good thing.

"The borrower becomes the lender's slave" was written by someone far wiser than the current group of debt-addicted politicians who are sending this nation down the roads towards financial oblivion.''

Either way, gold, after staging a titanic struggle revolving around the $1600 level, was knocked lower once that news story broke which gave the day's victory to the bears who managed to keep the metal from holding firm above $1600. Solid Asian-based buying last evening had pushed it further to the upside from yesterday's pit session close in New York and set the stage for the push above $1600 so we will have to see if those buyers come back in this evening. It does appear that as I write this commentary, buyers have appeared in the $1580's again.

More to come later if time permits...

The Dollar has gotten trashed today as it broke below 75 and then continued to plummet right through a critical support level at 74.50 without even a pause. It's weakness is providing even more volatility to an already volatile trading session as the algorithms generate buying across the commodity complex when the Dollar is weaker and risk trades are back on. That is what has pushed crude oil back to the $100 level again for WTI. However, several of the commodity markets are currently experiencing some bearish fundamental factors which is setting up some wild price swings across the sector in general as some of the algos buy while commercial accounts are providing the selling.

Remember that insanely weird 1 1/2 point rally in the long bond that I commented upon the other day? It never happened! Yep, bonds have erased the totality of those gains and have dropped as low as a full point in today's session. I am of the opinion that the best thing traders can do in these volatile market conditions is to sleep in late and upon waking, indulge heavily in video games. If you miss a couple of trading sessions, not to worry, as prices will eventually go right back to where they were before you took your extended nap. Madness, insanity and idiocy are too mild of a choice of words to describe what our financial markets are being reduced to by these damn computer algorithms.


  1. It's all bull Dan, the outcome is already decided and papers signed.
    This is just for show, to make the sheeple think that they are torn over the agenda.
    The hardest decision these politicians make daily is what to have for lunch.

  2. thanks Dan - always the comfort guiding light

  3. Dan - how would you consider the complexity in trading these markets compared to years past? I've just become interested in the Markets, Technical Analysis, etc and these markets seem very wild.

  4. Hi Dan, thanks for your daily briefings.

    I'm looking to buy more silver in the next month or so - i have been waiting in cash since unloading some at $45 and playing the mid 30s ratio over to gold - right before silver got creamed. Then waited, watching for <$32 which for my stack - never happened. I was interested in understanding if any seasonality trends can be shared. Not that the current state of things allows for such things...but rough thoughts would be appreciated.

  5. "only in America" ... you are sooooooo right on that.

  6. "I am of the opinion that the best thing traders can do in these volatile market conditions is to sleep in late and upon waking, indulge heavily in video games."

    Wahaha...! I really laughed out when i read this! It's what I had been doing these few days...! C.O.H. & FIFA 11 for me now... haha!

    Thanks Dan... for keeping us sane out of these nonsense markets :)

  7. Video Games and sleeping. . . check. Nothing else makes sense at this point in time.

  8. http://www.tfmetalsreport.com/forum/1616/coin-shops

    I'm going to say it again, People! COIN SHOPS! This is why, from Don't Tread On Me:

    6. JP Morgan the ultimate silver buyer? In the final act I do not expect JP Morgan to fall on the sword to defend a failing system. JP along with many other banks know full well the reality of the physical silver market. They have been perpetuating this fraud on a massive scale for years. They have kept the regulators at bay by having their boys actually become the regulators. They know full well that they are trading 100 paper ounces to 1 physical ounces. They are doing this because it is easy money to make now. During this mentality shift they will change with the wind and be first in line for the real metal that they are in control of. These banksters will most likely shift their losing silver short positions on to some other shell company,pension fund,the Federal Reserve or most likely the tax payers. These former silver shorts could ride the physical silver market all the way up. (I may have to change my Blythe Masters Rides The Silver Rocket pictures to ones of ecstasy…)

    The point is, people, is that JP Morgan, Goldman Sachs, and other companies specifically HIRED employees to interview for and land the jobs at the agencies in order to compromise their ability to keep these companies in check. Why are you traders PLAYING THEIR GAME? You know GD well they're not going to change the rules in your favor. That's what Ted Butler needs to get out of his butt.

    You want to stop all these people, you GO to the COIN SHOPS and you clean them all out! Take those metals away from the financial industrial complex so they have no gold or silver to trade on.


  9. If you do this, then you are able to begin to shut down the financial industrial complex as they run out of the ability go control the metal and thusly their ability to pay the electric bill that keeps their high-frequency-trading computers.




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