Gold and Silver Update – It’s Game On! – 04.28.16

  • Gold continues to consolidate. Two months of sideways price action is proving the yellow metal’s early-year gains were justified while setting the foundation for another move up.
  • That move will require some kind of impetus and there are many options to provide the push: more stimulus announcements in Europe or Japan, weak Q1 earnings, increasing inflation expectations, rising general economic uncertainty, US dollar weakness, and interest rate roulette, to name a few.
  • We don’t know if these things will transpire, let alone when. The US dollar is certainly declining, if in fits and starts:
  • That helps gold, from both the fundamental angle that gold is priced in greenbacks and the investment rationale that a declining greenback encourages savers to find another safe haven hideout for their savings.
  • But a declining dollar is only one cog in a machine driving investor interest towards gold. Another is the fact that super low interest rates have removed investors’ go-to tool for hedging their stock portfolios: bonds.
  • No matter what you think the odds are of a recession in the near to medium term, the fact is we are in uncharted waters. Very low or zero to even negative interest rates had their intended effect, which was to force savers and investors into riskier assets like bonds and equities. That created a seven-year bull market in equities and bonds – but one not representative of the actual economy, which remained stagnant.
  • That is what already happened. Of interest now is what will happen next.
  • Bonds have long been the go-to hedge against equities. Bonds are supposed to rise in price when recessionary periods push equities down, because recessions prompt central banks to lower interest rates and that lifts bond prices.
  • But how’s that supposed to work when interest rates are already rock bottom?
  • Bonds will not hedge stocks if we enter a recession because central banks can’t do anything to support bonds. That means investors will look elsewhere for a hedge. Gold will be a natural conclusion.

Read more at: Gold and Silver Update – It’s Game On!


George Orwell’s Ghost Is Laughing – Obama’s “No Boots On The Ground” Doublespeak – 04.27.16

  • What’s the difference between “boots on the ground” and military personnel wearing boots who are engaged in combat – and perhaps dying – on the ground? If you can answer that question convincingly, perhaps you’d like to apply for John Kirby’s job, because he’s not doing it very successfully. Kirby is the State Department spokesman who, in answer to a question from a reporter about the 250 US troops being sent to Syria, denied President Obama ever said there’d be “no boots on the ground” in Syria.
  • And here’s the relevant transcript:

“Kirby: there was never this – there was never this, “No boots on the ground.” I don’t know where this keeps coming from.

Question: But yes there – well, yes, yes, there was.

Kirby: There was no – there was – no there wasn’t. There was –

Question: More than –

Question: What?

Kirby: We’re not going to be involved in a large-scale combat mission on the ground. That is what the President has long said.”

  • To anyone who has been following this, Kirby’s argument is patently absurd. The President told the BBC less than twenty-four hours previously that there would be “no boots on the ground” – and then his administration announced that 250 more booted US soldiers would be treading Syrian ground. Not only that, but prior to the summer of last year, the President assured the American people there’d be no “boots on the ground” a total of sixteen times.

Read more at:George Orwell’s Ghost Is Laughing – Obama’s “No Boots On The Ground” Doublespeak


Venezuela Economy Literally Grinds To A Halt As Maduro Orders “Five Day Weekend” For Public Workers – 04.27.16

  • Just three weeks ago, the Venezuela socialist paradise gifted local workers with one extra day of rest each week when, as a result of the crippling economic crisis and collapsing power grid, president Maduro designated every Friday in the months of April and May as a non-working holiday in his desperate bid to save electricity as a prolonged drought pushes water levels to a critical threshold at hydro-generation plants. Never without a scapegoat, Maduro immediately blamed El-Nino for implementing the three-day weekend.
  • “This plan for 60 days, for two months, will allow the country to get through the most difficult period with the most risk,” Maduro said on state television in early April. “I call on families, on the youth, to join this plan with discipline, with conscience and extreme collaboration to confront this extreme situation” of the drought blamed on the El Nino weather system.
  • As a reminder, the reason for the electrical rationing was the water content of Venezuela’s Guri Dam, which supplies more than two-thirds of the country’s electricity. As The Latin American Herald Tribune wrote a month ago, the dam “is less than four meters from reaching the level where power generation will be impossible. Water levels at the hydroelectric dam are 3.56 meters from the start of a ‘collapse’ of the national electric system. Guri water levels are at their lowest levels since 2003, when the a nationwide strike against Hugo Chavez reduced the need for power, masking the problem.”
  • Yesterday the water levels at Guri dam reached a record low of 241.67 meters, according to state power utility Corpoelec. If levels drop below 240 meters, the dam’s operator may be forced to shut down units at the plant that produces about 75 percent of the electricity that Caracas, the country’s capital and largest city, consumes.

Read more at:Venezuela Economy Literally Grinds To A Halt As Maduro Orders “Five Day Weekend” For Public Workers


White House on lockdown for 2nd day in a row

  • The executive mansion has been locked down for the second time in less than 24 hours.
    The lockdown is due to an unknown situation, according to reporters in the press briefing room. The president is believed to be inside the White House.
  • The closure on Wednesday morning came just after 11 a.m. local time. On Tuesday, the White House was placed on a brief lockdown after a robbery suspect fleeing the scene jumped over the fence outside the Eisenhower Executive Office Building (EEOB, also known as the Old Executive Office Building) around 4 p.m. The lockdown was lifted about half an hour later.

Read more at:White House on lockdown for 2nd day in a row


Censored, Surveilled, Watch-Listed, & Jailed: The Absurd Citizenry Of The American Police State – 04.27.16

  • In past ages, those who dared to speak out against tyranny – viewed as an act of treason – were blinded, castrated, disfigured, mutilated, rendered mute by having their tongues cut out of their heads, and ultimately crucified.
  • In the American police state, the price to be paid for speaking truth to power (also increasingly viewed as an act of treason) is surveillance, censorship, jail and ultimately death.
  • It’s a diabolically ingenious tactic for muzzling, disarming and ultimately eliminating one’s critics or potential adversaries.
  • However, where many Americans go wrong is in assuming that you have to be doing something illegal or challenging the government’s authority in order to be flagged as a suspicious character, labeled an enemy of the state and locked up like a dangerous criminal.
  • In fact, as I point out in my book Battlefield America: The War on the American People, all you really need to do is use certain trigger words, surf the internet, communicate using a cell phone, drive a car, stay at a hotel, purchase materials at a hardware store, take flying or boating lessons, appear suspicious, question government authority, or generally live in the United States.
  • With the help of automated eyes and ears, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software, government agents are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potential enemies of the state.
  • It’s the American police state’s take on the dystopian terrors foreshadowed by George Orwell, Aldous Huxley and Phillip K. Dick all rolled up into one oppressive pre-crime and pre-thought crime package.

Read more at:Censored, Surveilled, Watch-Listed, & Jailed: The Absurd Citizenry Of The American Police State


Silver: Do Old Indicators Matter Or Is Physical About To Overrun Paper? – 04.26.16

  • For as long as most gold and silver investors can remember, the paper markets – that is, banks and speculators placing bets with futures contracts – have set the price of those metals. And within the paper markets, “the commercials” – fabricators and big banks – have consistently fooled speculators like hedge funds into going long or short at exactly the wrong time.
  • The data series that tracks this relationship is known as the commitment of traders report (COT), and it’s been a pretty reliable indicator of precious metals’ short-term trajectory.
  • Right now that’s bad news for gold and especially for silver, because the speculators – who, remember, are usually wrong at the extremes – are exuberantly long the latter, implying that the silver recovery is due for a correction. Here’s a recent piece from well-known metals trader Dan Norcini:

By that I mean, it just keeps getting scarier and scarier.

My guess is that every speculator on the planet is long silver/short gold or outright long silver.

That of course is an exaggeration but I am not exaggerating when I categorically state that the silver market is a train wreck just waiting to happen. As I have said before, and will say so again – I would rather miss any more upside in this market than get long now, not with a trade so lopsidedly jammed with speculators on the long side. I will leave that for the daredevils and others who like driving the stagecoach as close to the edge of the mountain pass road as they possibly can.

Here is a look at the hedge fund outrights:

Read more at:Silver: Do Old Indicators Matter Or Is Physical About To Overrun Paper?…

‘Hegemonic logic’: China fumes after Pentagon calls it top target of US ‘freedom of navigation’ ops

  • Beijing has urged Washington to respect international maritime order and stop interfering with other countries’ affairs. It comes in response to a fresh report by the Pentagon, mentioning China as the top target of US ‘freedom of navigation’ operations.
    “We regard the so-called ‘freedom of navigation’ operations as the violent means by which the US promotes its unilateral claims,” Hua Chunying, Chinese Foreign Ministry spokeswoman, said as cited by CCTV.
  • According to Beijing, the actions of the American military reveal “the hegemonic logic of the US towards international maritime order.”
    “We hope the US can respect the sovereignty and security of other countries and contribute more to safeguard international maritime order and regional peace and stability,” Hua Chunying said.
  • The US Defense Department carried out multiple ‘freedom of navigation’ operations against 13 countries between October 1, 2014 and September 30, 2015, according to an annual report released by the Pentagon on Monday.
  • Besides China, American targets included India, Indonesia, Iran, Libya, Malaysia, the Maldives, Oman, the Philippines and Vietnam.
  • The Pentagon sent its warships and planes to the South and East China seas where Beijing is conducting island reclamation activity.

Read more at:‘Hegemonic logic’: China fumes after Pentagon calls it top target of US ‘freedom of navigation’ ops