PM Weekly Market Commentary - 11/17/2018

davefairtex
By davefairtex on Sat, Nov 17, 2018 - 3:42pm

On Friday, gold rose +8.60 [+0.71%] to 1227.64 on very heavy volume, while silver climbed +0.12 [+0.84%] to 14.39 on very heavy volume also. All the metals actually did quite well, and on top of that, the buck declined -0.49%. We appear to be back in “anticipated tariff relief” mode once again.

An FT article suggested that, while no actual progress had been made, a possibility is that Trump and Xi will reach a “handshake agreement” at the G-20 that will put the next round of tariffs (the 25% tariff level) on hold, but without resolving the underlying issues. This is the same technique Trump used on both North Korea, and Europe.  There were other indications in the article that negotiations are back on once more.

https://www.ft.com/content/a6a3cb08-e887-11e8-8a85-04b8afea6ea3

Armstrong suggests that the UK should employ Trump to execute a BRExit agreement. He thinks it would be both more entertaining, and it would probably yield much better results.

The weekly metals sector map saw the metals recover from last week's sell-off. Silver led gold, with the miners somewhere in the middle.  Palladium and copper did best overall; this definitely looks like a tariff relief rally to me. Almost all items are back above the 9, and more than half are back above the 50.

Name Chart Chg (W) 52w ch MA9 MA50 MA200 50/200 Last Crossing last
Palladium $PALL 5.39% 17.29% rising rising rising rising ema9 on 2018-11-14 2018-11-16
Copper $COPPER 4.18% -8.58% rising rising falling rising ema9 on 2018-11-15 2018-11-16
Silver Miners SIL 2.36% -21.87% falling rising falling rising ema9 on 2018-11-15 2018-11-16
Silver $SILVER 1.84% -15.75% falling rising falling rising ema9 on 2018-11-16 2018-11-16
Senior Miners GDX 1.79% -14.25% falling rising falling rising ema9 on 2018-11-15 2018-11-16
Junior Miners GDXJ 1.40% -13.79% falling rising falling rising ema9 on 2018-11-16 2018-11-16
Gold $GOLD 0.97% -4.42% falling rising falling rising ema9 on 2018-11-16 2018-11-16
Gold/Euro $GOLD:$XEU 0.49% -1.22% falling rising falling rising ema9 on 2018-11-15 2018-11-16
Platinum $PLAT -0.89% -9.24% falling rising falling rising ema9 on 2018-11-09 2018-11-16

Gold rose +12.14 [+1.00%] on the week, marking a low on Tuesday and then rallying for the rest of the week. The weekly long white candle was probably a reversal (59%), while forecaster moved up +0.18 to -0.10. That's still a downtrend, but not a very strong one. Daily forecaster issued a buy signal on Wednesday. Gold is back above the 9 and 50 MA lines, which is a good sign. Gold also appears to be making a higher low. Gold/Euros just barely managed to creep back above its 200 MA; that tells us that a fair amount of gold's move this week was a currency effect. Gold is now in an uptrend in only the daily timeframe.

The December rate-increase chances fell to 65%.

COMEX GC open interest rose 20,553 contracts this week.

COT report shows the commercial net position rose +36k, which was 27k new longs and 9k shorts covered. Managed money net fell by -32k, which was 29k new shorts, and 3k fewer longs. These were fairly large changes, and move the positioning back to a very bullish level.

Silver climbed +0.26 [+1.84%] on the week, making a new low to 13.86, but then reversing on Wednesday and rallying along with gold through Friday. Forecaster issued its buy signal for silver on Wednesday, which puts silver in an uptrend in both daily and monthly timeframes. Silver's weekly bullish harami candle print had a 48% chance of being a bullish reversal. While silver is back above the 9 MA, it has not quite made it back to the 50 just yet.

The gold/silver ratio fell -0.75 to 84.66. That's a decent improvement, and is bullish.

COMEX SI open interest rose +7,585 contracts this week.

COT report shows commercial net rose +14k contracts, which was 11k fewer shorts, and 3k new longs. Managed money net fell by -20k contracts, or 16k new shorts, and 4k fewer longs. Managed money net is close to record levels once more.

Miners reversed along with gold and silver on Wednesday; XAU climbed +2.99%, with the daily forecaster issuing a buy signal on Thursday. Weekly candle print was a spinning top, which had a 63% chance of being a bullish reversal. XAU managed to close back above the 9 and 50 MA lines, and is now in an uptrend in the daily and monthly timeframes.

GDX:$GOLD rose +0.78%, while the GDXJ:GDX ratio dropped -0.38%. That is slightly bullish.

USD

The buck fell -0.45 [-0.47%] to 95.97. After breaking out to new highs (to 97.18) on Monday, the buck spent the rest of the week moving lower, with the forecaster issuing a sell signal on Thursday, and then plunging through the 9 MA on Friday's sell-off. That still leaves the buck in an uptrend in the weekly and monthly timeframes.

The currency moves were mostly positive vs the buck: Euro +0.75%, GBP -1.23% (BRExit – or maybe not-BRExit), AUD +1.42%, JPY +0.79%, with GBP the exception. The much-worried-about denoument of the Italian budget ended up being a non-event; or maybe a not-yet event. More on that one later.

CNY rose vs the buck this week, climbing +0.25%; CNY fell from 6.96 on Monday to 6.94 on Friday.

US Equities/SPX

SPX fell -44.74 [-1.61%] to 2736.27. SPX fell for much of the week, rallying strongly only on Thursday, with little follow-through on Friday. SPX remains below all 3 moving averages, and in a downtrend in both the daily and weekly timeframes.

The sector map shows consumer discretionary (-3.32%) and defense (-3.20%) leading lower, while materials, REITs, and utilities managed to stay in the green. That's somewhat bearish, with hints of commodity rally.

Globally, the US was the worst performer this week, with Emerging Asia doing best. That's risk-on behavior, at least from a money flows standpoint.

VIX rose +0.78 to 18.14.

Name Chart Chg (W) 52w ch MA9 MA50 MA200 50/200 Last Crossing last
Gold Miners GDX 1.79% -14.25% falling rising falling rising ema9 on 2018-11-15 2018-11-16
Materials XLB 0.47% -5.13% rising falling falling falling ema9 on 2018-11-16 2018-11-16
REIT RWR 0.13% -1.21% rising falling rising falling ema9 on 2018-11-16 2018-11-16
Utilities XLU 0.02% -2.35% rising rising rising falling ema9 on 2018-11-16 2018-11-16
Industrials XLI -0.59% 1.55% rising falling falling falling ema9 on 2018-11-16 2018-11-16
Healthcare XLV -0.98% 12.85% rising falling rising falling ema9 on 2018-11-16 2018-11-16
Financials XLF -1.22% 2.29% falling falling falling falling ema9 on 2018-11-12 2018-11-16
Homebuilders XHB -1.27% -17.51% falling falling falling falling ema9 on 2018-11-09 2018-11-16
Cons Staples XLP -1.34% 2.02% rising rising falling rising ema9 on 2018-11-14 2018-11-16
Energy XLE -1.93% 0.12% falling falling falling falling ema9 on 2018-11-12 2018-11-16
Technology XLK -2.33% 6.98% falling falling rising falling ema9 on 2018-11-12 2018-11-16
Telecom XTL -2.36% 5.13% falling falling rising falling ema9 on 2018-11-12 2018-11-16
Defense ITA -3.20% 8.65% falling falling falling falling ema9 on 2018-11-12 2018-11-16
Cons Discretionary XLY -3.32% 14.22% falling falling rising falling ema9 on 2018-11-12 2018-11-16

Gold in Other Currencies

Gold rallied in all currencies this week.

Rates & Commodities

TLT climbed +1.19%, zig-zagging higher, ending the week on a high on Friday. TY did well also, up +0.94%. TY issued a buy signal on Monday, and rallied steadily all week long. The TY chart looks substantially stronger than the TLT chart, having managed to close above the previous high set three weeks ago. TY is in an uptrend in both daily and weekly timeframes. The 10-year yield fell -11.5 bp to 3.07%. That's a pretty strong move.

Is this a flight to safety? I'm not sure. It might be. The really curious move came on Thursday and Friday: TY moved higher, in spite of the rally in equities. It could be that there was a major seller of US 10-year notes that has stopped selling. Perhaps, China?  No need to sell bonds and raise dollars to support RMB if there is progress towards a settlement.

JNK plunged -1.51%, falling 5 days out of 5, making a new low on Friday, which invalidated the possible bullish reversal on Thursday. The plunge in junky debt is a strong sign of risk off.

Crude fell for the 6th straight week, losing -2.94 [-4.89%] to 57.14. Most of the losses in crude came on Tuesday – an appalling 6% plunge in the price of the master resource that turned out to mark the low, at least for now. A Trump tweet that oil prices were way too high (given current supplies) helped push prices lower on Tuesday too. Oil then moved slowly higher over the next 3 days, causing the crude forecaster to issue a buy signal on Friday, but it is hard to know if this is a real rebound or just a dead cat bounce. Crude remains well below the 9 MA, and the 50 and 200 MA lines are distant memories. The weekly long black candle might be a reversal (38% bullish). Another positive sign: a terrible-looking EIA report (crude: +10.3m, gasoline: -3.6m, distillates: -0.8m) released on Thursday did not end up causing a plunge in prices. When bad news fails to cause a sell-off, it is a bullish sign. On that, I hang my hopes that 54.97, hit on Tuesday, will mark the low for this cycle in crude.

Physical Supply Indicators

* The GLD ETF tonnage on hand rose +4.45 tons, with 760 tons in inventory.

* ETF Discount to NAV:

 PHYS 9.77 -1.84% to NAV [decrease]
 PSLV 5.16 -4.76% to NAV [decrease]
 CEF 11.76 -4.66% to NAV [decrease]

* Bullion Vault gold (https://www.bullionvault.com/gold_market.do#!/orderboard) shows a $5 discount for gold and a 5c premium for silver.

* Big bars premiums were: gold [1kg] 0.89% and silver [1000oz] is still sold out. Eagles are back, at a 20% premium ($17.15), while the 100 oz bars have a premium of 4.93%.

Grey Swans & Geopolitics

  • Ebola: total cases 341, with 215 deaths. There were 31 new cases, with 3 of the new cases being health workers. 31 health care workers have been infected to date. There were cases discovered in two new areas. http://www.who.int/csr/don/15-november-2018-ebola-drc/en/

  • Turkey: the 10-year yield fell -61 bp this week to 16.01. Turkey's 10-year yield continues to decline. The TRY/USD pair fell -2.4% to 5.32. Turkey: confidence restored, at least for now anyways. Erdogan couldn't have planned it any better.

  • German Government: Interior minister Horst Seehofer, who tried moving right on migration to avoid electoral disaster – and failed – is resigning as head of the CSU, but retaining his post in government. The biggest surprise of the recent elections is not how the right did, but how voters deserted the SPD for the Greens. Was the SPD pragmatic, or did it just sell out? German voters have spoken clearly: the SPD sold out! Interestingly, during the early 1930s in Germany, support for the corrupt centrist parties collapsed, with voters moving both left (communist) and right (Nazi) in response. Takeaway: in a democracy, when the center gets too bought out, the fringe (both left and right) gets a shot at power.

  • Italy – Budget: The Tuesday deadline for Italy to back down from its 2.4% GDP deficit budget came and went without any action by the EC. A European Commission spokesman said in a statement it was still considering what action to take. My sense: they tried to scare Italy via the bond market, and that didn't work. Will they play right into Salvini's hands and try to issue a spanking via fines – to a net contributor to the EU budget? The whole affair to date has done nothing but strengthen Salvini and M5S. The differential between the previous government's deficit (1.5%) and this one (2.4%) seems pretty trivial to go to war over. This suggests to me that the war is probably more about the EC trying to discredit M5S and Lega, showing Italy's voters (and all the others across the zone) that “going populist” will change nothing, and they should just stick with the pro-EU rubber-stamp parties. https://www.euronews.com/2018/11/16/eu-commission-starts-disciplinary-action-against-italy-over-budget

  • China Tariffs: This week we had a positive Trump Tweet on the potential for settling the US-China trade difficulty, and conflicting reports over whether or not the US had decided to put off the 25% tariff increase for six months. Still, the market appears optimistic about the chances for some kind of settlement. Trump meets Xi at the G-20 in 2 weeks.  A settlement could cause a strong commodity rally, based on the moves we saw this week.

  • Yield Curve Inversion: the 1-10 spread fell -5.5 bp to 39.5 bp. Spread continues to narrow, but if history is a guide, the spread has to cross the 0% line before we need to get worried.

  • US Congressional Elections, 2018: they aren't over yet, but the picture is clearer. Fivethirtyeight.com projects R+2 in the senate, and D+39 in the house. The potential for the midterms being a "grey swan" in terms of a massive repudiation of Trump (and a likely much stronger market correction) has passed. https://fivethirtyeight.com/features/the-16-races-still-too-close-to-call/

  • North Korea: KJU reportedly attended the test of a “new high-tech weapon”, which wasn't actually specified in the North Korean press release. Real or imagined, it was probably a signal of annoyance by North Korea that the progress towards a resolution had stalled. https://www.theguardian.com/world/2018/nov/16/north-korea-kim-jong-un-supervises-test-of-new-ultramodern-weapon

  • Mueller Investigation: Acting AG Whitaker has indicated that the investigation will continue, amid a chorus of requests from Democrats for him to recuse himself as a result of him opining that Mueller should stick to investigating Russian collusion. This would seem to suggest that the Democrats don't believe very strongly in the collusion story either, and are pinning their impeachment/investigation hopes on Mueller digging up “something else."

Summary

The metals reversed this week; everything in the group put in a swing low, forecaster buy signals, the works. The primary driver was the perception that the US-China trade dispute is moving closer to settlement. This drove the buck lower, and the metals higher, led by palladium & copper. Independently, the 10-year treasury is also starting to catch a bid. The 10-year moved higher every day, independently of what equities or commodities did, with yields falling 11 bp. Perhaps a big seller is done liquidating, its hard to say. Crude might have put in a low too, but that reversal is looking a whole lot more iffy. Junky debt is now heading south at a pretty high rate of speed. After having been relatively quiet for a long time, traders woke up this week and decided to bail out.

Big bar gold premiums on gold remain low, silver's premium has increased, while ETF discounts decreased. There is no shortage of gold at these prices, but there does seem to be a shortage of silver, for certain products.

The COT report moved more strongly bullish this week, with gold commercial and managed money net both heading back towards record levels. Silver managed money net has also moved back into a bullish position.

Over the past two weeks, the 10-1 spread has been declining, at least partially due to the rally in the 10-year. The spread is a reasonably good indicator of an impending recession. Here's a chart of what that looks like, dating back to 1965, with a larger context. It shows that we aren't there yet – and furthermore, there is usually a period of a widening spread prior to the actual recession, likely due to the Fed dropping short rates because of what it sees on the horizon. Executive summary: no recession yet, and it is actually good news that the Fed continues to tighten. In some sense anyway.

Weekly trends (in order of strength):

Uptrend: 10-year Treasury, USD, DJIA.

Downtrend: crude, silver, gold/Euros, platinum, bitcoin, SPX, gold, copper, miners.

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16 Comments

Luke Moffat's picture
Luke Moffat
Status: Gold Member (Offline)
Joined: Jan 25 2014
Posts: 384
"Brexit"

DaveF:

Armstrong suggests that the UK should employ Trump to execute a BRExit agreement. He thinks it would be both more entertaining, and it would probably yield much better results.

I'd go along with that. I do wonder if the real negotiations taking place centre around Mrs. May's transition to a future EU role. Looking at the Draft Withdrawal Agreement, Article 7 states the following:

References to the Union and to Member States

1. For the purposes of this Agreement, all references to Member States and competent authorities of Member States in provisions of Union law made applicable by this Agreement shall be understood as including the United Kingdom and its competent authorities, except as regards:

(a) the nomination, appointment or election of members of the institutions, bodies, offices and agencies of the Union, as well as the participation in the decision-making and the attendance in the meetings of the institutions;

(b) the participation in the decision-making and governance of the bodies, offices and agencies of the Union;

Thus the UK will not be allowed to appoint representatives to the European Council and Parliament. Nor will it be allowed to appoint judges to the European Court of Justice. Now check out Article 86:

Pending cases before the Court of Justice of the European Union

1. The Court of Justice of the European Union shall continue to have jurisdiction in any proceedings brought by or against the United Kingdom before the end of the transition period. Such jurisdiction shall apply to all stages of proceedings, including appeal proceedings before the Court of Justice and proceedings before the General Court where the case is referred back to the General Court.

2. The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period.

and Article 158:

References to the Court of Justice of the European Union concerning Part Two

1. Where, in a case which commenced at first instance within 8 years from the end of the transition period before a court or tribunal in the United Kingdom, a question is raised concerning the interpretation of Part Two of this Agreement, and where that court or tribunal considers that a decision on that question is necessary to enable it to give judgment in that case, that court or tribunal may request the Court of Justice of the European Union to give a preliminary ruling on that question.

Thus, the European Court of Justice will have jurisdition over the UK during the transition period (ending 31st December 2020) and then for a further 8 years (31st December 2028) for those items covered in Part 2 of the Agreement.

So the UK surrenders sovereignty and pays £39 billion for the privelege? If someone can tell me how this doesn't equate to treason I'm all ears. It sounds like a treaty you sign after losing a war to me.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
May's not-BRexit

Yeah, I would agree with your assessment.  May's BRExit is actually unconditional surrender.

It is actually worse than just remaining within the EU.

She must have been totally bought off by the financial industry.

phusg's picture
phusg
Status: Bronze Member (Offline)
Joined: Jul 16 2014
Posts: 58
May day

Gents, please, May was given an impossible mandate to fulfill by her poorly informed electorate; leave the EU, but actually, on hindsight, keep all the good things the EU brings at the same time. Rightly dubbed 'having your cake and eating it' and thus impossible to deliver. So we end up with a fudge like this. Personally I think a second referendum should be held with 3 options, Remain | May's deal | Hard brexit WTO rules. Let the people decide based on actual proposals of what the Brexit would look like.

I don't believe either of your ad hominem conspiracy theories are necessary to explain the end-game we're seeing here.

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
winners & losers

phusg-

Ok, so I think this is another clear case of winners & losers.  There is no "England Wins" or "England loses" in BRExit.  Specific groups win and lose, depending on the rules of how it happens.

Its pretty clear that the losers in a hard BRExit are corporations, who would much prefer to have low wage immigrants from the continent, as well as complete access to the EU marketplace.  That much is obvious from the newsflow alone.  When the news gets all shrill about stuff, then its the advertisers and large corps that are always behind it.  That's just how things work these days.  We see that in the US also.

Given that May appears to have constructed an agreement that just happened to check the boxes of the corporate wishlist, one wonders, why did she do so?  Was it simply calculating "what's good for Barclays is good for the UK?  I'm sure it was a multi-faceted decision.  At the end of the day, though, she appears to act just the same as the Republo-crats here in the US.  I'm sure she isn't swayed about her potential opportunities post-public-service at all.  Not like all the rest of them.  She's different.  Bless her.

Or - if it walks like a duck, and quacks like a duck, most likely, its a duck.

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 396
England, Great Britain or the UK?

Brexit is the UK leaving the EU.

Let's not conflate our nationhood here. :-)

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
England vs UK

Brexit is the UK leaving the EU.

Yeah, that's the theory anyway.  I suspect it might actually end up as England leaving the EU.  :)

Certainly that's how the vote went anyway.  City of London might just run off and join the EU by itself, not to mention Scotland.

Same thing could happen to California.  I do wonder, however, would California go in for unlimited immigration if they decided to split off?

 

hammer6166's picture
hammer6166
Status: Bronze Member (Offline)
Joined: Apr 30 2010
Posts: 32
HAA 1000oz silver bars

Hard Assets Alliance appears to have 1000oz silver bars for sale. Unlike APMEX which shows the 1000oz bars as unavailable, HAA allowed me to enter a quantity. Once I entered a quantity, I received a notice that I had insufficient funds for the trade so I can't tell for sure that they are available.

The listed price for 1 bar was $14,889.40 and the ticker price for silver on the site was $14.42/oz which means about a 3.25% premium.

 
 
Luke Moffat's picture
Luke Moffat
Status: Gold Member (Offline)
Joined: Jan 25 2014
Posts: 384
The Terms of Surrender

I'm not sure how one interprets leaving the EU an impossible mandate. My position is that it meant exactly that; a cutoms border between Republic of Ireland and Northern Ireland, annulment of EU laws and policies and adopting World Trade Organisation regulations. That is what it means to leave the EU which, conincidently, is what was on the ballot paper.

May's support comes in the form of big business - so no surprise to see her turn to the Confederation of British Industry to back her plan - https://www.theguardian.com/politics/2018/nov/19/theresa-may-pm-tells-cb...

It's right there in the open, no conspiracy required.

I don't get as riled about this stuff as I used to knowing full well that our contracting energy consumption per capita leads to the dissolution of the EU project anyway. It'd just be much easier to manage if everyone followed the rule of law and didn't commit treason in the process.

Also, just out of curiousity, why the emotinal attachment to the EU? It's something I've never understood.

timot78's picture
timot78
Status: Member (Offline)
Joined: Sep 18 2010
Posts: 13
10 x 100 oz bars

hammer,

 

Provident Metals carries 100 oz bars @ $1496.00 (right now) at q-ties > 5.  So, this is quite equivalent to per oz price you quoted.

 

https://www.providentmetals.com/100-oz-999-fine-silver-bar-our-choice.html

 

-Peter 

 

 

hammer6166's picture
hammer6166
Status: Bronze Member (Offline)
Joined: Apr 30 2010
Posts: 32
1000 vs 100 oz bars

Hello Peter,

Thank you for the comparison. It is good to see our numbers are about the same.

The 1000oz bars are interesting because they are what is transferred on the COMEX. A shortage could indicate a supply squeeze or run on silver. I'm fairly certain that is why Dave tracks 1000oz specifically rather than just the price of silver. They could be one of the canaries in the coal mine.

My limited searching only found two places that have 1000oz bars listed: APMEX and HAA. After pricing out a bar, I do have to wonder how many places like AMPEX keep 1000oz bars around. Maybe they have no inventory and buy it from the dealer market when needed. Of course, that wouldn't explain why APMEX shows they are out of inventory.

Cheers,

Hammer

phusg's picture
phusg
Status: Bronze Member (Offline)
Joined: Jul 16 2014
Posts: 58
May day 2
davefairtex wrote:

Given that May appears to have constructed an agreement that just happened to check the boxes of the corporate wishlist, one wonders, why did she do so? Was it simply calculating "what's good for Barclays is good for the UK?

Yes, largely, I think it was. In a very similar way to how we both think Trumps promise and actual policy on China was motivated by repatriating manufacturing jobs. I see May going for a soft Brexit largely because it maximises British jobs. Alongside kicking the can on the break up of the UK that a hard brexit may well entail.

davefairtex wrote:

I'm sure she isn't swayed about her potential opportunities post-public-service at all.  Not like all the rest of them.  She's different.  Bless her.

Or - if it walks like a duck, and quacks like a duck, most likely, its a duck.

I just don't see why politicians need to bow to corportation will in exchange for job security. I don't mean to say that they aren't bribeable in general, but surely someone with high level experience and inside knowledge of government will always command a sizeable wage afterwards.

Luke Moffat wrote:

I'm not sure how one interprets leaving the EU an impossible mandate. My position is that it meant exactly that; a cutoms border between Republic of Ireland and Northern Ireland, annulment of EU laws and policies and adopting World Trade Organisation regulations. That is what it means to leave the EU which, conincidently, is what was on the ballot paper.

No terms were specified on the ballot paper:

Luke Moffat's picture
Luke Moffat
Status: Gold Member (Offline)
Joined: Jan 25 2014
Posts: 384
EU, BoE, Energy and the Dollar

Phusg,

The European Union is made up of various institutions and bodies - see here (https://europa.eu/european-union/about-eu/institutions-bodies_en). And it's all written down in the EU's own words. I honestly don't understand why you think it's a big mystery. Leaving the EU, as stated on the ballot paper, means leaving its institutions. It's really that simple.

Anywho, moving on, turns out Mr. Carney of Bank of England fame is a fan of the deal:- (https://www.theguardian.com/business/2018/nov/20/mark-carney-backs-there...

My guess is he's in favour of anything that prevents him from having to raise interest rates ever again. It'll have to happen eventually to defend the pound from collapsing given Britain's deteriorating economy and the dollar strength that'll slay all before it. Brent Johnson gives a really incisive (and accessible) presentation on the coming dollar rally:

Back to the UK, I feel, given what's coming our way, that we'll see a rise in nationalism as a coping mechanism (perhaps some of 'Brexit' was precisely that) - "if I can't derive happiness from consumption I'll derive it from identity". I also think it's something that the other side of the vote doesn't understand and so it gets labelled as something else (usually something derogatory).

In short, the UK appears in energy transition (depression) mode. Our energy consumption per capita has been in decline since 2005. I don't think this can be attributed to efficiency breakthroughs in energy utilisation as the ERoI of our primary energy sources (oil and gas) is in steady decline. See below (last chart is from Charles Hall so I can't take the credit for that one) and the data I used comes from BP;

 

Energy transitions, historically speaking, have political consequences. And I really don't think it'll be different this time. Thinking out loud here but given that those who wished to remain in the EU don't object to the EU's technocratic structure, would they object if the UK developed its own technocratic political system? Also, if efficiency can help preserve prosperity would those who voted for "Brexit" object to a "Made in the UK" version of Brussels?

Cheers,

Luke

 

bronsuchecki's picture
bronsuchecki
Status: Bronze Member (Offline)
Joined: Apr 22 2012
Posts: 81
silver canary
hammer6166 wrote:

The 1000oz bars are interesting because they are what is transferred on the COMEX. A shortage could indicate a supply squeeze or run on silver. I'm fairly certain that is why Dave tracks 1000oz specifically rather than just the price of silver. They could be one of the canaries in the coal mine.

I don't think it is much help as a canary. 1000oz bars are not a popular item for retail investors. Comex silver stocks were around 160 million oz in mid 2016 since then it has risen in a straight line up to 295 million oz, hardly indicative of a supply squeeze.

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3213
No Silver Shortage Seen By This Veteran Dealer

I reached out to Robert Mish of Mish International for his opinion. Robert has been a gold dealer for over 50 years, and is a valued "boots on the ground" source for us on the retail bullion market.

Here's what he has to say:

SIlver is not in shortage, only certain products get temporariy short for reasons of production gaps, or coincidence of what any particular dealer has and doesn’t have from buy backs and from what he chose to mint order lately or not.
 
We have plenty of silver…but not “every” product.
 
Premiums are low-middle, not distressed.
 
Our best sellers right now are
1.  old odd weight silver bars, especially smaller ones.
2.  10 oz bars
3.  Nikola Tesla silver 1 oz coins
 
No big players have approached us in months for 6 or 7 figure silver deals.

 

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5694
commanding sizeable wages

I just don't see why politicians need to bow to corportation will in exchange for job security. I don't mean to say that they aren't bribeable in general, but surely someone with high level experience and inside knowledge of government will always command a sizeable wage afterwards.

My goodness.

What would Hillary Clinton have to say that could possibly be worth $400,000 for a 30 minute speech?  To a bank?  Is she a banking expert?  Will she make them millions on their next trade by giving them some bit of vital inside information about how the state department really functions?  Did she, in fact, give them such information?  No.  She was running for President.  It was bribery before-the-fact.

What does Ben Bernanke do for Citidel that justifies a $10,000,000 per year salary?  His insights into Fed rate-setting policy and his rolodex is just that important to a HF trading firm?

Why did Bob Rubin get a slot at Citibank (immediately after the dismantling of Glass Stegall, that Rubin spearheaded, that allowed Citi to make its big acquisition) that paid him $10,000,000 per yer?

All of those are either thank-you for a job well done, or thank-you for a job about to be done.

This is why capitalism has turned into cartel-monopoly-capitalism, where a few big players control the market and set prices accordingly.  Not in every market, but in many important markets.  Like defense, banking, and sickcare, to name a few.  Through such before-or-after bribery, business owns the regulators, and the lawmakers, and so its no surprise that laws are made that favor business, and that the regulatory enforcement also favors business.

I do find it a bit surprising that I need to explain such basic things about modern political life to an obviously intelligent person like you.  What is it that you do, anyway?  MEP?  Staffer to an MEP?

Mark_BC's picture
Mark_BC
Status: Platinum Member (Offline)
Joined: Apr 30 2010
Posts: 522
davefairtex wrote: This is
davefairtex wrote:

This is why capitalism has turned into cartel-monopoly-capitalism, where a few big players control the market and set prices accordingly.  Not in every market, but in many important markets.  Like defense, banking, and sickcare, to name a few.  Through such before-or-after bribery, business owns the regulators, and the lawmakers, and so its no surprise that laws are made that favor business, and that the regulatory enforcement also favors business.

I thought this interview with Dave Janda was good. He explains how he went into the system with good intentions to make positive changes to the medical system and soon discovered that the system is completely corrupt and that the media tells us the opposite of what is actually happening.

 

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