From Investment Research Dynamics at investmentresearchdynamics.com:
When gold finally breaks out of the Banks’ grip you won’t be able to chart its moves fast enough. It is being smothered by a blanket of undeliverable derivatives, and the realization and reckoning of this overhang will be nothing short of spectacular, a sort of 2008 in reverse. -“Jesse” of Jesse’s Cafe Americain in an email exchange
I wasn’t going to write a general New Year’s post but Bill “Midas” Murphy emailed me wondering why I was quiet. The truth is I was spending this morning hunting down a new pair of tennis shoes because New Balance redesigned the model I’ve been using for the past three years and it no longer works for me. It’s very distressing.
I’m not getting excited about the metals until gold really starts to move – as in shoots up into the mid-1000’s. China/India/Russia combined imported over 3,000 tonnes in 2015. Global production was likely around 2400-2500 tonnes. How are the sellers of this gold making deliveries? Hemingway said that you broke slowly then suddenly. The same dynamic will apply to the initial spike up in gold. Gold is being inexorably held down by fraudulent paper derivatives.
I believe the inability of the banks to fulfill the $800 gold prophecies of Wall Street and newsletter charlatans is because the elitists are slowly losing control of their ability to cap gold with paper. I also am confident that we will wake up one day this year and discover that the price of gold has suddenly spiked up a lot higher. Slowly, then suddenly. People not on that ride will be left in bewilderment, wondering “what happened?”
I don’t see how the global financial system will get even halfway through 2016 without a major destructive earthquake. Oil alone has to be causing derivatives problems that, for now, are being contained and hidden from sight.
I assume you saw the big drop in auto sales for December yesterday. The number was way below Wall St. estimates. Wall St estimates in general are substantially above where economic data will start coming in this year, telling us that expectations “baked into the cake” are way too high.
Housing is going to follow auto sales down the rabbit hole to hell. Over the last three years the banks have been stuffing middle America with subprime quality mortgage, auto and student loan debt. The mortgage products used to inflate the primary housing bubble have been reconstituted, repackaged, re-branded and re-stuffed into a large body of homebuyers who will not be able to afford them before long.
To continue reading: The Federal Reserve’s Salvation Army School of Economics
This might not be too far off base for “watching 2016 unwind”.
http://johngaltfla.com/wordpress/2016/01/06/01-06-breaking-news-chinese-stock-market-stops-trading-after-30-minutes-7-decline/
Regular readers will not be surprised.
Here’s the direct link to the article cited:
http://investmentresearchdynamics.com/the-federal-reserves-salvation-army-school-of-economics-2/
And here’s a VERY interesting piece on the same site:
“. . . the Friday event, when the Fed funds rate crashed below the .25% lower bound of the current FF rate policy . . . Flexing my conspiracy theory brain cells, it must be something big like JPM where it is big enough to have a real demand for funds where these small differentials [i.e. the difference between the .25% lower bound for the FF rate and the lower rate of .12 at which the FF rate was set on Wednesday Dec 31] could matter and is systemically important and they don’t want attention drawn, yet. Like going to the discount window, etc”
http://investmentresearchdynamics.com/is-the-fed-beginning-to-lose-control/
I forgot to link the usual link line to the article in question. Thank you for providing the link, and thanks for the link to the other article. I’m not sure I buy the theory that anything other than end of the year type adjustments were going on with the FF rate on 12/31.