The abnormal activity in the repo market threatened the liquidity of banks and the stability of money market funds. Nervous Fed officials responded with a massive $203 billion injection of cash over the past few days. It was the central bank’s biggest emergency intervention into financial markets since 2008.
Yet investors seem totally complacent about the risks of another financial crisis taking hold. The lack of any fear gauges flashing in stock market suggests investors view the Fed’s reversion to rate cuts and Quantitative Easing as some kind of new normal. Full Story
As for the various ‘reflation trades’, they should participate if cyclical inflation is at the root of it, which I think stands a good chance of being the case. The counter-cyclical gold stock sector would no longer be uniquely featured in such a situation (as it was this past summer and could be again in Q4), but it could participate if we echo the 2003-2008 phase where its fundamentals degraded and its prices kept rising. Full Story
By now, it would have been hard not to have read about the Justice Department’s landmark criminal indictments against three additional precious metals traders from JPMorgan. Two of the traders charged are current employees and include the head of global metals trading. The charges involve spoofing and market manipulation that extend back for nearly a decade. In a very serious turn, the Justice Department invoked the Racketeering and Corrupt Organization Act (RICO) and referred to the pattern of wrongdoing at JPMorgan as that of a criminal enterprise. I am grateful that the new charges validate virtually everything I have alleged about JPMorgan for more than ten years to the point where a subscriber quipped that the DOJ was plagiarizing my work.
Simply put, the Justice Department leveled the most serious (and deserved) charges against traders of JPMorgan possible, but stopped short of stepping over the critical line of charging the bank itself. This is not a knock on the Justice Department, whose case has been near flawless to this point. As much as I am convinced that JPMorgan has been the prime precious metals manipulator since 2008, indicting the bank for that would likely be a death sentence for JPMorgan with incomprehensible collateral damage to the financial system and society in general. Full Story
For these reasons it may give you some comfort to know what I am doing with the capital generated by the sale of my stock: after paying tens of millions in taxes (after all, “We didn’t build that,” right?) by Friday the rest will be in investments that are counter-cyclical to the economy: Gold, silver, and two flavors of crypto. The gold and silver are stored outside of the United States, in Switzerland, and within two weeks, will be scattered in other locations that are even more outside of the reach of the Deep State, but are places that are safe for me. The crypto is stored in the place where all crypto is stored: in mathematical mist, behind long keys held only in the memory of someone who is quite good at storing such things in memory (with paper backups in the hands of a priest I met 35 years ago who never sits foot in the West). Full Story
The global financial system is unsustainably over-leveraged. This problem is compounded by the massive increase in OTC derivatives. The U.S. financial system, in exceptional fashion, leads the way. Trump calls it “the greatest economy ever.” Yet the Fed was unable to “normalize” the Fed Funds Rate back up to just the historically average level without crashing the financial system. In fact, the Fed couldn’t even get halfway there before it had to reverse course and take rates lower plus hint a more money printing. Full Story
Delighted as we all may be with this week's news -- the new indictments of JPMorganChase employees involved with the gold market, the U.S. Justice Department's designation of the investment bank as a criminal enterprise, and the prospects of more indictments -- GATA has to admit a couple of things about the situation.
First, the market manipulation of which the bank's employees and supervisors stand accused -- rigging prices largely by "spoofing" other traders -- is not the sort of manipulation GATA long has complained about. Full Story
By: Gary Christenson, Deviant Investor - 19 September, 2019
Bonds are bought not for their yield, but because central banks are “gaming” the financial system and forcing yields down, which pushes prices higher. Front-running works until it doesn’t.
Will heavy-handed central bank interest rate interventions end well?
President Trump asked, “who is our bigger enemy, Jay Powell or Chairman Xi?” He asks a good question. The U.S. does not need a central bank.
Gold sells at all-time high prices in many currencies, but not the U.S. dollar. Full Story
The July and August statements of account for the Bank for International Settlements indicate that the bank has continued to engage in gold swaps this summer. The BIS uses swaps and other gold derivatives to gain access to gold held by commercial banks.
But recent swap levels at the BIS remain much lower than in the second half of last year. Full Story
By: Avi Gilburt, Elliott Wave Trader - 18 September, 2019
But, if you are a buy and hold investor in the metals market, I can assure you that these cases have no bearing on your investment holdings. So, you would be best to summarily ignore these cases.
Moreover, it would also be best for you to ignore those who are trying to convince you that these “manipulators” caused the market drop between 2011-2015. They simply need a scapegoat for their lack of ability to foresee that correction coming. The real question is why you continue to read them or trust them? Full Story
“We expect spot gold prices to trade stronger for longer, possibly breaching $2,000 an ounce and posting new cyclical highs at some point in the next year or two,” Citi analyst Aakash Doshi wrote in a note dated September 10, and reported by Bloomberg.
I agree with Citi’s projection. Last week I joined fellow goldwatchers Peter Schiff and Imaru Cassanova on Liz Claman’s Countdown to the Close, and I pointed out that gold is looking more and more attractive as central banks pursue easy money policies. When governments offer you a negative rate of return, that automatically makes gold much more appealing. What’s more, I think this easing cycle has just begun. Full Story
By: Avi Gilburt, Elliott Wave Trader - 17 September, 2019
You see, the beauty of Elliott Wave analysis (as enhanced by our Fibonacci Pinball methodology) is not just the accuracy of identifying market turning points as well as precise targets. It is not just in its ability to outline where we are in the larger degree structures, and provide us with market context which is not available through any other methodology. Rather, one of the main advantages of using our Fibonacci Pinball method is that it provides you with objective indications as to when you need to revise your perspectives.
So, as long as the market does not provide us with the break out set up noted above, I must maintain an expectation for a return to the 2600-2700SPX region in the coming months. Full Story
The Justice Department and federal regulators might end up being the least of the bullion banks’ worries. Class-action attorneys and the victims they represent are readying civil lawsuits.
If they can provide proof to juries that traders at multiple banks spent years operating a large and well-coordinated racket, under the supervision and direction of very senior executives, the potential liability will be huge. Full Story
Whether the massive global bond bubble crashes first or the massive US stock bubble has always been a conundrum to me. What is not in question for me (at least, not much) is the recession we are entering and that the recession will take down stocks.
One reason I’m less sure of how and when the bond bubble finally implodes is that a recession may breathe new hot air into the bubble as the Fed reverts to more ultimately failing QE and interest-rate reductions. That QE will without a doubt be much less effective so may not last long before the Fed has to switch to even more drastic manipulations and controls, as I am teasing out this year from the central banksters’ own words. Full Story
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