PM Daily Market Commentary - 1/13/2016

davefairtex
By davefairtex on Thu, Jan 14, 2016 - 3:14am

Gold rose +7.30 to 1093.30 on heavy volume, while silver climbed a big +0.38 to 14.15 on moderately heavy volume.  Rallies in PM came amidst the attempt by oil to put in a low alongside a major sell-off in equities.  The easy answer seems to be: equities down, gold up.

Gold sold off in Asia and London, but it started to rally about half an hour before the US market opened.  From the chart perspective, gold found support at its 50 MA, and rallied back above its 9 EMA.  This is what you want to see if you're looking for gold to move higher; the support at the 50 is a good sign.

Silver staged a strong rally today, starting at around 8:30 Eastern - about 30 minutes before gold started its own move higher.  COMEX buyers drove silver back up through its 9 EMA all the way to the 50 MA, where the rally stopped.  If silver can close above the 50, that would be a bullish sign; the rally last week met serious selling pressure at the 50.  A close above it would say that the balance of forces between buyers and sellers has changed.

The miners were totally unimpressed with today's rally in gold and silver: GDX was unchanged on light volume, while GDXJ lost -0.53% on moderate volume.  GDX remains below all 3 moving averages, and its reaction today to the gold and silver rally looks bearish.  Something has changed in the miner space, and in a relatively short period of time.  You can see in the ratio chart below that the GDX:$GOLD ratio was steadily rising up until Monday - before Monday, miners were preferred to gold.  Then on Monday, a plug somewhere was pulled, and the ratio is now heading briskly downhill.  Perhaps a sovereign wealth fund somewhere was instructed to liquidate rather than accumulate...and so the miners get thrown right off the lifeboat.

Platinum rose +1.49%, palladium jumped +3.45% and printed a swing low, but copper fell -0.26%; PM is improving, but copper remains a dissenting vote.

The buck attempted to rally but failed, ending the day down just -0.01 to 98.98.  While the buck seems unable to rally right now, the uptrend remains intact.

SPX was hammered, dropping -48.40 to 1890.28, smashing through its previous low and ending the day not far from the lows set back in August.  SPX is oversold right now and there is a support zone around 1870 where dip-buyers should appear, but if there aren't enough buyers at 1870, a move below that could lead to some fairly dramatic outcomes.  VIX rose +2.75 to 25.22.  Computer model is once again short SPX.  I have to have a talk with that computer model about going long two days ago.

The Shanghai Exchange fell -2.42%, also making a new low.  That likely didn't help SPX, but it wasn't the proximate cause of the SPX selloff - SPX had rallied in the futures markets and only started selling after market open at 09:30 Eastern.  If SPX "manipulation" happened overnight in the futures markets, then all they managed to accomplish was higher selling prices for the traders looking to get out.

JNK was absolutely hammered, falling -1.34% and dropping quite near to the previous low set back in December.  My thoughts yesterday that the selling might be over in JNK were quite premature - likely tied to the swing low in equities which has now failed.

Long bond ETF TLT continued higher, rising +0.99% and breaking cleanly above its recent trading range.  Bonds are clearly the beneficiary from the fall in equity prices.

CRB rose +0.20%, a modest move.  Downtrend remains unaffected.

WTIC tried staging a rally today but failed, closing down just -0.02 to 30.56.  Oil was up almost 1.20 until the Petroleum Status Report came out at 10:30 Eastern that showed a slight build in inventories, which caused oil to immediately plummet back down to just above 30.  Round number 30 does seem to be providing some measure of support to oil - WTIC is now moving sideways.  The market is funny that way; there is no reason why "30" should provide support for oil, but the round numbers do sometimes seem to have this effect, because the market is still by and large a human construct.  "I'll buy oil if it drops to 30" - it is a very human thing to say.

Right now, gold seems to like equity market sell-offs, while silver - I have no idea what is happening with silver.  Last week it jumped 40 cents, next day down 40 cents, and now today its up 38 cents.  Sometimes it seems to be about oil, other times it is the big players either hammering price lower or driving prices higher, as they did today.  Silver is a tough trade right now, and sometimes it just seems to be the plaything of big money.  Until it picks a direction, its probably best to watch.

If equities don't stop at 1870, things could get really interesting.  Gold would probably benefit, who knows what happens to silver, and the miners probably sell off - based on current trends anyway.

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31 Comments

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Armstrong on Gold: "religion aside..."

For the goldbugs, the summary of the article would be: "Armstrong predicts $5000 gold!!"

The "whys" of the move are more interesting to me.  In paragraph 3, he states: "Gold will only respond when the majority of people see the crisis unfolding."  Makes sense to me.

That might happen right along the time of a COMEX default - when the majority of people see the crisis unfolding.  That's when gold vanishes from the shelves.

http://www.armstrongeconomics.com/archives/40680

To some, this is a religious battle. To others, it is just a time to rip off a lot of people by selling fantasies and sophistry. I have stated this many times, so here it goes again: Gold rises when people lose confidence in government. It has nothing to do with inflation. So, you start to worry about government survival or who’s going to win a war when gold rises — not before.

Short term, we still have the risk of gold going under $1,000 per ounce. It’s going to flip when everything is right — not before. It will probably max out at $5,000 per ounce or perhaps $6,000 at best. That we will not know until we have the low and the projection angle from that low. We’re dealing with a very profound event, religion aside. Such events of political-economic trend resets come around every 309.6 years. The last one was the global revolution against monarchy which began in the United States.

Gold will respond ONLY when the majority sees the crisis unfolding. Just because you may understand it and see the logical outcome does not mean that the bulk of the population will. During the American Revolution, they actually issued currency backed by assets confiscated from “Tories” or those who supported the king against the people.

There is no time for nonsense conspiracy theories or other sophistry. This is about a major shift in political economic trend, which is far more important than the job to sell gold by people pretending to be analysts with nothing new to add to the issue other than inflation, fiat, and the theory that all paper currency is evil.

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Armstrong

Hi Dave,

I saw that update from Armstrong as well and it did feel good to see him calling such a price target.  I've been finding myself generally agreeing with his views on gold, that it will continue to behave more as a commodity and will therefore probably keep dropping until the majority of people catch on that government has failed them, or if we go to major war and people don't know if we'll win.  However, I still feel like [for me] it's good to keep buying even if there's more movement downwards because I'd rather be too early than too late in this case.  I'm still averaging my way in towards a higher allocation of gold so with the downwards movement we've seen I'm glad to be reminded that the upside later is [probably] going to be well worth it.

- Aaron

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For my taste...Armstrong isn't it...
bostonJumper wrote:

Hi Dave,

I saw that update from Armstrong as well and it did feel good to see him calling such a price target.  I've been finding myself generally agreeing with his views on gold, that it will continue to behave more as a commodity and will therefore probably keep dropping until the majority of people catch on that government has failed them, or if we go to major war and people don't know if we'll win.  However, I still feel like [for me] it's good to keep buying even if there's more movement downwards because I'd rather be too early than too late in this case.  I'm still averaging my way in towards a higher allocation of gold so with the downwards movement we've seen I'm glad to be reminded that the upside later is [probably] going to be well worth it.

I prefer Grant William's approach...he's got the evidence, and he's got an appropriate dose of humility...this may be pure projection on my part, but I always seem to detect a strong whiff of "I'm smarter than everybody" in Armstrong's writings.

While he paints it in terms of 'his computer model' his writing seems to betray zero latitude for other opinions.  He denigrates goldbugs without naming them specifically.  He's dismissive of alternative explanations that run counter to his own.

While he may be right - who knows? - I strongly prefer those who display at least some humor and humility because - get this(!) - nobody knows!

So whether Armstrong confirms my preferred beliefs or not, I take little comfort (or offense) from his writings because they are just a tad too sure.  But, of course, I read them and take them in, just as I do dozens of other points of view.

But in this case, I think Armstrong's views are best summarized by Grant's piece from a few weeks ago which in the west boils down to "Nobody Cares."

Someday they will, and then there will be a new price for gold, but putting a price target on it?  That's beyond me...too many variables including "loss of faith" (measured in Tribles I assume) and "the value of a dollar" which may be decidedly higher or lower than today.

 

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Thanks

Thanks, Chris.  I'll take a look into Grant Williams.  I agree Armstrong's style of writing is a little arrogant, although I do like reading some of his posts because of the different slant he takes - the different perspectives help me fine tune my own views.  I like the idea of these long cycles à la "Fourth Turning."

For the record (on the subject of style), I appreciate PP more than all other sources in particular because of the thoughtful, evidence-based discussions and the regular dose of reality that's injected into everything.

- Aaron

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computer models

While he paints it in terms of 'his computer model' his writing seems to betray zero latitude for other opinions.  He denigrates goldbugs without naming them specifically.  He's dismissive of alternative explanations that run counter to his own.

Zero latitude is right.  Its more than a whiff of "I know more than you."  I think part of the problem is, his model has worked quite well for him, and - it might actually be possible that he really does know more than you.  And me.  And the rest of us.  Certainly its nicer to deal with fantastic personalities, but if he's right...I can deal with it.

In engineering, you're allowed to have this attitude, but only if you are right.

He is the only person I know who is predicting a moonshot in equities from a crisis in confidence in government.  If this comes to pass...then there is something in his methodology that trumps pretty much anything else you might object to about his attitude.

That doesn't mean he's fun on a date, or right about, say, climate change, but that's ok.  I can ignore his opinions on areas that are not his main field of study and focus on the areas where he does have decades of actual expertise.

While he may be right - who knows? - I strongly prefer those who display at least some humor and humility because - get this(!) - nobody knows!

Again, if he's right, I can deal with the personality quirks.  Its just not an issue for me if someone ends up being correct.

I'm waiting for this phase transition.  If he nails this one, I'll be sold, because its something I never would have seen coming on my own.

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Armstrong is just using different words
davefairtex wrote:

He is the only person I know who is predicting a moonshot in equities from a crisis in confidence in government.  If this comes to pass...then there is something in his methodology that trumps pretty much anything else you might object to about his attitude.

He's not the only person, not by a long shot...but he's the only person I know that's the placed the emphasis on people's confidence in government.

Most people, including myself, would place the emphasis on a loss of faith in the currency, with the first stop on that blame train being the central bank.  If I have no confidence in the ability of my central bank to manage a currency crisis, then I too will be buying anything and everything that I can, including stocks.

I could see myself having some faith in my government but a profound loss of faith in my central bank achieving the same outcome he predicts.  That is, a loss of confidence in government is not a requirement for an equity moon shot.

But a loss of faith in dollars is.

The landscape is littered with examples including these (note that the German experience is on a log scale!):

That moonshot took the Weimar stock market from around 400 to just under 100 billion.

This next example comes to us from modern day Venezuela where the stock market there has gone up nearly 40,000% since 2004...despite the country plunging into the worst recession/depression ever....

But it would be a mistake to say the stock market went up based on people's confidence levels in the government...it went up due to people's lack of confidence in the handling of the nation's money.

Adam and I have long said that when we in the US get to the "money for Main Street" part of the Fed's program that everyone should go out and buy anything that isn't nailed down. 

Just buy.  Run, don't walk, and spend whatever the Fed has gifted you because that's the end of the old regime and the beginning of the new one.

Now...here's the thing I don't know yet...is it better to buy equities during such a phase...or gold...or land?

I'll note that even as Zimbabwe's economy collapsed and industrial production plunged by 90% the ZIMB stock market launched just like the Weimar market....but people who put their money there still lost purchasing power...even on a straight basis...but on an after tax basis they lost a lot more.  After all, they were parking their money in the equities of companies that were busy losing 90% of their productive output...I'm hard pressed to understand how that's a good investment.

Which is why I continue to think that having your money parked in a cash-flowing business that can survive the inevitable raw material and input shortages that will cripple other businesses, you should be able to ride it all out better than those who were hoping for passive gains in an equity index?  

But, again, I don't know yet...I'll have to do more digging...but the Venezuela experience says "buy gold."

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weimar doesn't apply

Chris-

The story you lay out is the standard Weimar Republic goldbug print-fest hyperinflationary outcome.  This story I've heard a zillion times.  Is it happening?  No, it isn't.  Except in Venezuela.  In the core economies of the world, we're seeing the opposite happen.

Armstrong has made the point repeatedly that Weimar, Zimbabwe, and Venezuela were not core economies, and as a result, it is a mistake to equate their outcome with the outcome in a core economy.

As a result, there are real distinctions between what you just laid out, and Armstrong's projected path.  He sees a deflationary hunt-for-taxes slowly strangling the world economy, and finally money will simply run and hide anywhere that the government can't get at it rather than engaging in productive activity.

Do you see the distinction between that and the Weimar hyperinflationary outcome?  The stock market boom Armstrong projects isn't driven by Weimar-style hyperinflation, its a side effect of capital flight from public (treasury) assets into private assets such as equities - and gold.

Your case, and his case, are very different.

The thing that attracts me to Armstrong's storyline is one simple thing: it ties in with what is actually happening right now.  I see no signs of hyperinflation.  I do see signs of taxation, money fleeing off grid, and general deflation.

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What to buy?

Armstrong's stuff always leaves me wanting.. like many who deny manipulation, he never, ever discusses the structure of the market (price discovery through trading of paper futures), nor the leverage, nor the natural interests of the (bullion) banks that control the markets (protecting the false sanctity of their product;  debt based fiat currency).  Armstrong lives in a computer model vacuum and he gets more arrogant by the day based on the fact that he has been correct on price (but for the wrong reasons).  Whatever. 

Chris said,

  Now...here's the thing I don't know yet...is it better to buy equities during such a phase...or gold...or land?

Or Palladium?  This is the real question in my mind - what assets?  As well.. we need to think about what assets to front run, because some may not even be available by the time the Main street money spigots open.  For instance, there is NO Palladium in one ounce or greater form available from Apmex right now that is not a, "pre-sale".  Gainesville shows zero Pd in stock.  As an inveterate watcher of pricing and availability for all kinds of PM's, that is just unprecedented.  You won't see articles about this in the news because Pt and Pd are very, very small markets.. but just like with Silver from time-to-time, the leveraged futures markets are playing havoc with price relative to true physical demand, and the result is retail shortage.  The fact that just a few PM-bugs who have branched out into Pd have sucked up the available coin/bar supply suggests to me that these assets will be gone before you even see them mentioned on Zerohedge.  

My last PM buy was (another) ounce of Pd.       

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paper gold: stocks vs flows

JimH-

Armstrong's stuff always leaves me wanting.. like many who deny manipulation, he never, ever discusses the structure of the market (price discovery through trading of paper futures), nor the leverage, nor the natural interests of the (bullion) banks that control the markets (protecting the false sanctity of their product;  debt based fiat currency).

The whole "paper markets price suppression through leverage" concept is a fallacy.  COMEX represents a supply of 1200 "paper tons" in a 170,000 ton physical market.  COMEX "paper supply" is a small fraction of the total above-ground physical supply.

Goldbug commentators always focus on flow, not on stock, when they talk about how COMEX suppresses "real price discovery" because "X number of tons were traded today", but that's a classic stocks vs flows misunderstanding.

Yes, the bullion banks can theoretically generate as many paper tons as they want - but the reality is, they've generated less than 1200 tons of paper gold in a 170,000 ton physical market.

Yesterday, there were 656 tons of paper gold traded at COMEX, against an open interest of 1127 tons.  How many "paper gold tons" were created yesterday by the bullion banks in their attempt to suppress price?  Was the number 656?  1127?

Actually, the number is 13.  That's the difference between yesterday's open interest (358,033) and today's open interest (362,332).  If the number 13 surprises you, its because you're conflating stocks with flows, same as the goldbug storytellers.

Open interest = "paper gold stock."  Suppresses gold price.

Daily trading volume = "paper gold flow."  Does not suppress gold price.

They are not the same thing.

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That would be a mistake...
davefairtex wrote:

He sees a deflationary hunt-for-taxes slowly strangling the world economy, and finally money will simply run and hide anywhere that the government can't get at it rather than engaging in productive activity.

It would be a colossal mistake to think that you could "hide in equities" to escape taxes.  If you've accurately captured his position I think it's a silly one.

Rules are made to be changed and a government desperate for taxes will do exactly that.  It's a core tenet of mine and this site.  

Once governments are desperate and starving they will come after anything and everything.  

I think it would be better to predict a meteoric rise in the black markets of desperate countries rather than their stock markets.  

But I could be wrong.

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Chris and Dave - back and forth..

I can see you spend a lot of energy challenging each other's views and bringing information necessary to explore various points in depth.  Just want to say it's *highly* valued for me and I do want you to know that I gain a lot from it.

Thank you.

Every thought of doing a podcast with Dave, Chris?

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As a currency devalues it

As a currency devalues it makes sense its stock indices would increase because assets get revalued in the weaker currency.   What isn't seen are the companies that went out of business.  Another example of survivor bias.  Regarding Wiemer those that did "best" sent some wealth out of the country.   The problem today is most modern countries are extremely risky too (central banks printing money wildly including the Swiss).  If global war doesn't occur, then my next best guess is political upheaval in the USA.

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SPX new low: 1859.60, down -62

SPX has now made a new low, breaking below the low point from August.  Next stop: previous low of about 1820 dating back to late-2014.  VIX is 28.05, up +4.45.

Its starting to get ugly.

Since the Fed can print an infinite amount of money, and they aren't afraid to use all of it to keep the markets propped up, perhaps someone who has that belief system can explain to me why we just broke support.

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hiding from taxes in equities?

If thats the impression I gave you - that people would be hiding in equities to avoid taxes - then either I mis-spoke, or you mis-understood.

Assets move from public (treasury bonds) to private (stocks, and corp bonds) for a variety of reasons.  Once there is a crisis of confidence in the core nation's government's ability to pay, money starts to flee that asset class.  Where does money go when "risk free" sovereign debt starts to look risky, and the banking system is known to be an iffy proposition - and this happens in the core economy?  By definition there is no external safe haven, so equities and corporate bonds are the only pool big enough for that money to go.  Its just a process of elimination.

Additionally, public assets are more readily subject to confiscation by the government.  Specifically, arbitrary maturity extensions can (will?) happen if/when it becomes impossible to fund the debt after a collapse of confidence in government.

We can argue if maturity extension is more likely than outright monetization; I can see a case made either way.  We know about the monetization case, but monetization assumes the Fed retains unlimited freedom to act.

Right now, confidence in the US and the USD public assets remains, even though the Fed has monetized 4 trillion of them.  Once confidence snaps, the Fed monetizing Treasury bonds will harm confidence, not help it - it will result in a huge sell-off in the treasury market.  Of course the Fed could simply buy "all of them", but if there is a confidence issue, that action would probably crash the dollar, as all those overseas treasury bonds would get sent right to the Fed - possibly swapped for equities - anything that wasn't printable.  Likely that process wouldn't play out completely, the Fed would halt it once it was clear what the consequences were.

Once confidence in government snaps, it is entirely possible the Fed would find its monetization ability hemmed in by the dollar on one side, and a fragile Treasury market on the other.

At this moment, because confidence remains, the Fed has virtually unlimited freedom of action.  Once confidence is gone, they will be forced to choose: either get hosed by the Treasury market, or by the forex market.  The government might well end up deciding to extend maturities in an attempt to avoid either (unpleasant) outcome.  As a "temporary" measure, of course.

But any of those outcomes - and the process of exploring them - will result in money fleeing treasury bonds and moving into equities and corporates, thus creating the phase transition.

That's the scenario as I understand it.

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Faith in Government

Chris Wrote:

Most people, including myself, would place the emphasis on a loss of faith in the currency, with the first stop on that blame train being the central bank.

I wonder if faith in government could also include faith in the currency.  I realize that the central bank technically isn't a part of the government, but a) the power to create money was legislated to it by Congress, and b) most people probably believe central bank is a part of the government.  In fact, I'd be willing to bet if you asked most people who prints their money they'd say either "the government" or "the treasury" and if you asked most people what the Fed is they'd probably say "the government."  Actually, I'd be curious to see if there are any polls on this.  When a full breakdown of faith happens, it will be about what the masses think, not us.

- Aaron

PS: In saying that I liked hearing Armstrong call a $5k price target I was really just acknowledging Dave's inference that goldbugs love it whenever they hear anybody call a really high target.

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Why did Fed allow SPX to break support?

Brandon Smith has been saying the Fed's intention now is to destroy the economy and the dollar. Toward that end he's predicting they will continue to raise rates this year. We'll see about that.

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fed's intention

Tom-

I'm not sure who Brandon Smith is, but - really.  People can say just about anything.  Doesn't make it true.

Occam and his razor suggest that the Fed is trying to do their best to support the banks and the government, the two paymasters of the Fed.  People come a distant second.  How on earth would destroying the dollar and the economy support the banks and the government?

Again, if the Fed were master manipulators with infinite power, we never should have made a lower low today.  That's a BFD from a chart perspective.  Therefore, I must conclude that their power and enthusiasm to manipulate the markets are substantially less than what people imagine them to be.

 

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alt-market
davefairtex wrote:

Tom-

I'm not sure who Brandon Smith is, but - really.  People can say just about anything.  Doesn't make it true.

dave,

brandon smith runs http://www.alt-market.com/, it is a decent prepping site with some interesting content.

brandon is a fairly smart guy, especially as young as he is. he has written some good and informative articles in the past, though i don't agree with some of what he says.

brandon is predicting that the fed will continue on its projected path of rate hikes in order to intentionally crash the usa economy and the dollar. if i understand him correctly, he is theorizing that the globalists are attempting to bring about a one-world-government because out of the ruins and panic of worldwide collapse there will be calls for "strong leadership", allowing them to establish a one world government.

you can have a look for yourself if you're interested, this is the article i believe tom was referring to:

http://www.alt-market.com/articles/2769-what-fresh-horror-awaits-the-eco...

it seems pretty speculative to me, although may be possible, who knows. but as far as i'm concerned, collapse is coming, with or without the fed's help.

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$
bostonJumper wrote:

  In fact, I'd be willing to bet if you asked most people who prints their money they'd say either "the government" or "the treasury" and if you asked most people what the Fed is they'd probably say "the government."

sorry to nitpick, but nobody prints money - money can't be printed. one of the qualities of money is *scarcity*. if it can be printed on a printer, then it's not scarce, and therefore not money. at best it's currency.

you're right about the general public being asleep at the wheel, though.

bostonJumper wrote:

PS: In saying that I liked hearing Armstrong call a $5k price target I was really just acknowledging Dave's inference that goldbugs love it whenever they hear anybody call a really high target.

$5k is a high target? that's not a lot when you consider the intrinsic [lack of] value of the dollar.

i read an article not long ago that if you take the us money supply, and divide it by the gold in fort knox (i know, the gold there is probably long-gone, but let's give ol' uncle sam the benefit of the doubt), that it comes out to about $52,000 per ounce. so if the dollar were backed by gold today, that would be its price.

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imho

Brandon Smith is a liar and conspiracy theorist. I've detailed my reasons for this conclusion elsewhere on this blog and won't repeat them now. As far as I know he has no expertise in financial or economic matters. He's found himself a hidey hole somewhere in Montana financed by his blog flowers. Trust him at your peril.

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We trust NO ONE!

JUST ourselves.  However, we do read others for info.  Concerning Brandon Smith, just calling him a liar doesn't square it with me.  For then we must also call Griffin, The Creature from Jekyll Island a liar too.

And if you read Griffin in-depth, you might see whence Brendon comes.  So, if one realizes that the Fed does NOT have infinite power (Dave), still HOW MUCH power do they have?  Or, maybe better said, WHAT is their role in the GREAT PROJECT, along with the banking-political elites? If the IMF and SDRs are in the plans, where does the Fed fit in??  Name calling NEVER does it for me--show me EVIDENCE of what you say.

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personal

The basis of my name calling is personal experience with Smith. He definitely lied about me, but personal experience is not subject to proof when he controls the evidence.

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the usual canard

reflector-

So I just have one bone to pick with what you said:

i read an article not long ago that if you take the us money supply, and divide it by the gold in fort knox (i know, the gold there is probably long-gone, but let's give ol' uncle sam the benefit of the doubt), that it comes out to about $52,000 per ounce. so if the dollar were backed by gold today, that would be its price.

The dollar does not need to be backed by some commodity to have value.  It just doesn't.  We have an existence proof in front of our very noses.  The dollar is accepted around the world as having value, without being backed by gold.

If you doubt my words - please send me all your spare (valueless) dollars.

Every currency is backed by the productivity of the nation that issues that currency.  Why is this?  Because from the standpoint of a foreigner, using that currency, you can buy goods and services from that productive nation.  Its just that simple.

Japan did extremely well, and it had no gold-backed currency.  That nation had very little in the way of resources too.  The Yen did very well for a long time because of the people.  Not the gold, or the resources - people drive value of currency.

There are a flock of other things that drive particular exchange rates, but in the modern age we do not have to have gold backing for the currency to have value.

Again, if you doubt this - please send me all your worthless dollars.  Nobody yet has taken me up on this offer.  I am not really sure why, but there it is.

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Brandon Smith

Wait!  I thought WE were the conspiracy theorists.  Besides, haven't we decided here that calling someone a conspiracy theorist is a lame attempt to shut down certain points of view without consideration?

I don't trust Brandon Smith and I don't know much about him.  He has also never lied about me.  I'm just taking his oddball (contrarian to the contrarians) viewpoint as something interesting to consider.  The Federal Reserve was conceived in sin (secrecy, fraud and lies) and operates the same way to this day.  My main point in bringing up his idea is this: you know an institution is performing very poorly if critics can make a decent fact-based case that they are trying to destroy the very things they're supposed to be protecting and sustaining.  Currently, the majority are operating on the assumption that the Fed is just making monumental mistakes.  Others have also said TPTB are moving us to eventually dump the fiat US dollar (the last sovereign reserve currency) to replace it with a global fiat currency with themselves as the masters of that currency (and us too)!

Let's debate the ideas and not shut that debate down by remarking how bad the person is who said this or that.  However, I do strongly believe there is great value in considering a person's moral character along with their ideas.

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super mega conspiracy

Tom-

It kind of feels to me like the "mainstream" Fed conspiracy wasn't exciting enough for some people, so they had to invent a super mega conspiracy to trump the (now boring) original Fed conspiracy that pretty much everyone in the alternative media space now takes as gospel.  "Listen you lame mainstream conspiracy believer, you don't know anything.  The Super Mega Conspirators have a much bigger plan than your lame Fed conspiracy can possibly conceive of."  My conspiracy is bigger than your conspiracy.

Me, I think the banks just want to keep the gravy train flowing (maximize debt, and NO debtor defaults, please!), and the deep state & politicans just want to stay in power, and the Fed is an awesome policy tool for doing just that.  Its not a very exciting conspiracy, but it does have simplicity to recommend it.  Power & greed explains everything.  I think Occam would find it acceptable.

But let's talke a walk down Mega Conspiracy Lane for a moment.  I'll use CAF as my inspiration, since she comes across as pretty level-headed, even when talking about UFOs, mind control, black budgets, and the like.

CAF likes to talk about Mr Global.  Let's look at Mr Global.  Would he want to destroy the dollar?  Since Mr Global swiped so many US assets after the 2008 meltdown, it would seem ill-advised to actually crush the value of all those stolen assets.  That's why CAF talks about the "slow burn" vs the "end-o-the-world scenario."  And so far, Slow Burn has been the outcome, when many other really smart people have been talking for years about goetterdammerung, so points for her on getting that one right.  Its one reason I listen to what she has to say.  She's been right so far.

Mr Global's plan was to steal the assets of the US, re-investing a bunch of the money in emerging markets while handing over the liabilities (pensions, medicare, social security) to the government, which will eventually have to default on those liabilities.  And - success - it all worked out for Mr Global.  Less well for us, though.

But in looking at the Mr Global incentive structure, my sense is that Mr Global does not want to deliberately destroy the dollar.  He went to all that trouble to steal all those assets (both debt and equity) denominated in dollars, and so now he certainly doesn't want the value of those assets (and that cash flow) to get chopped in half.  Or worse.

So from two perspectives, I don't buy the "torch the US economy and the buck" conspiracy theory.  I like my own simpler conspiracy theory, or CAF's conspiracy theory, a whole lot better.

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Super mega Conspiracy on the back burner

This super mega conspiracy is on the way back burner in my mind. I will, however, revisit it if (as Smith predicts)  our private bank cartel (the Fed) raises interest rates in 2016 into the teeth of this accelerating deflation.

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fair enough

Tom-

You are a lot like me.  When someone's prediction ends up being correct, you sit up and take notice.  That's why I'm listening to Armstrong and CAF.  Plunging gold, and "the slow burn" have my attention.

I'm with the majority here in projecting that it is unlikely the Fed will raise rates into the teeth of the deflationary wave.  The hesitancy they showed at raising rates mid-2015 as well as after the big China crash in August is my evidence.  If they were out to blow things up, they'd have raised rates then.  They didn't.

The Fed has shown an abundance of caution to date.  Raising rates in a presidential election year: unlikely.  Raising rates during a deflationary wave: unlikely.  Raising rates with a (projected) GDP for 4Q 2015 of 0.6%: also unlikely.

https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1

If, contrary to my expectations, the Fed raises rates in the teeth of this storm, I'll go read more of what Mr Brandon Smith has to say, because clearly something in my model of the world will have been wrong, and I'll need to make some adustments.

 

 

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Super Mega Conspiracy Discussion

Dave stated:

I'm with the majority here in projecting that it is unlikely the Fed will raise rates into the teeth of the deflationary wave.  The hesitancy they showed at raising rates mid-2015 as well as after the big China crash in August is my evidence.  If they were out to blow things up, they'd have raised rates then.  They didn't.

Who is to say at what point do they blow things up?  Maybe NOW is still not the time?

Dave.  Have you read Griffin's The Creature from Jeykll Island--in depth, no skimming, please.  Is his work and that of Quickly Super Mega Conspiracy?  Does Griffin present EVIDENCE from solid research?  I am not trying to be right here, just really wondering how much of Griffin's work is valid--still, for me, the best overall, perspective.  What would Armstrong say about Griffin's research? Is there NO overall project, no overall PERSPECTIVE that's worthwhile that explains much of what goes on--just greedy folks/countries trying to squeeze out more $ and power?

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conspiracies, cycles, armstrong, and opinion

Ken-

Armstrong's view is that there is no conspiracy, at least not a multi-generational banking conspiracy, just bankers trying to get rich quick off a "sure thing trade" by changing laws, using inside information, rigging markets - tactically - and more or less lying, cheating, and thieving from their clients and everyone else in order to make a quick buck.  And society's willingness to put up with this runs in cycles, so the banker ownership of the levers of power ebbs and flows with the cycle.

He's said that, "behind the curtain", its basically chaos with politicians having no clue what to do, writing laws that they think will work one way, but end up having massive unintended consequences, with revolving doors between politicians and banks, paid-for judges, and the like.  And unless the popular trend is with you, there's no real hope of changing anything.  He likes to say, "its just not yet time."

Armstrong likes the Fed - but only as per its original mission dating back to 1913, which was lender of last resort.  I have to agree with him here.  If you have fractional reserve lending, you need a lender of last resort.  The Fed's serious mission creep since then - that, we don't need.

Armstrong seems to believe in the force of history, a la Asimov/Hari Seldon.  According to him, people don't make history, its the historical imperative that lifts up individuals based on whatever trend is in place.  Take Hitler and Germany - without the historical imperative, you have the 1923 Beer Hall Putsch, which failed, leading to a 5 year jail term (for which he served 8 months) out of which the only worldly impact was 720 pages of "Mein Kampf."   With the historical imperative behind him, you have the 1933 election, which eventually led to the global conflagration with millions dead.  Without Hitler personally - would Germany have attacked once again?  The itch certainly was there, left by Versailles, and at some level, it was probably going to have to get scratched.

Trump is another case in point.  Would a thoughtful, educated public give this guy more than two minutes?  But because of the current "dreadfully tired of politicians" trend, here he is out in front.  In 2008, nobody woud have paid him the slightest attention.  The wave just wasn't there to lift him out of his self-named building and onto the political stage.

Perhaps it is people in combination with history.  Its just not possible for HItler to do this thing without the historical imperative behind him.  And - perhaps - there are hundreds, thousands of Hitlers, all around the world, waiting for the right moment for the river of history to lift them out of obscurity and into a position of power.  How's that for a thought?  We'd kind of like to believe if you shoot one guy, the problem is solved.  What if the problem runs a whole lot deeper?

Honestly, I'm still sorting through what I believe. Currently, I think - for the most part - Armstrong is right about banking.  There may be an underlying "black budget" (a la CAF), but the for the surface stuff it appears that Armstrong is right.  Otherwise - why on earth did Citibank impale itself on its own horrible real estate trade if not as a result of stupidity + short term greed?  If they were all-knowing plotters in complete control, that just wouldn't have happened.

I believe you have a bunch of greedy, short-term thinking humans blissfully unaware of cyclical patterns in charge of a dreadfully complicated machine that is the world economy.  They ignore cyclical effects at the worst possible time - mainly because human memory and emotion are themselves the cause of much of the cyclical behavior and its dreadfully difficult to self-observe.  Especially when you are really busy being greedy.  A man's paycheck, belief, and so on.

I believe there is a deep state doing their best to do the deep state thing, but I'm not sure how competent they are.  Or, just perhaps, they are operating with more assets in place than shows up on the standard US military Order of Battle.  They have their own motivations, and I'm less clear about that.  That's the wildcard for me.  They strike me as fulfilling the role of Roman bureaucrats - they keep the Empire ticking along even if the current Caesar has a room-temperature IQ; and sometimes he certainly does.

Ultimately, here's what I fall back on.  Fortunes tend not to last more than a couple of generations.  That's why I don't really think effective multi-generational plots are likely.  Keeping the momentum alive and the focus intact for that long is just as difficult as keeping that fortune intact, or the promise of a revolution - be it communist, or American.  Those that come after aren't nearly as motivated as the founders.  Corruption happens.  That's a natural human cyclical thing - we see that played out in literally every historlcal cycle, in every empire, in every part of the world.  Why would it be any different for conspiracies?

I don't believe in an operational (human) Grand Plan.  I'm sure there are Grand Plans being attempted from time to time, but as we all know from our own personal experience, Grand Plans really never survive contact with the enemy.

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DaveF: Can you integrate in the 9/11 False Flag with this view

I appreciate the intelligence you bring to this topic and how clearly you think through and articulate your reasoning.

Metaphor diversion:

Two shepherds lie on a hill and look at a section of the night sky.

Shepherd 1:  Ah, Look.  The great bear.

Shepherd 2:  (Shocked)  That is not a bear, it is a spoon!

Both are looking at the same section of the sky.  But the stars (facts) included are different and the story (pattern recognition applied to the facts) is different.

So my question is can the 9/11 False Flag be integrated into this pattern of "there is no overarching  conspiracy?"  Not just the False Flag itself, but what appears to be a coordinated re-engineering of the world based on this event.

Be sure to include the 5 year media blackout of showing WTC7's collapse on TV,  the absolute lack of honest public newspaper or TV discussion of the inconsistencies in the story (except for a few hit pieces in the Daily Mail), the Patriot Act, initiated because of 9/11 which was written before 9/11, and the ubiquitous spread of electronic surveillance activities which is in clear violation of the US 4th Amendment.

Who is it that designs and implements the great myths of our era:  "The global war on terror," and the "clash of civilizations."

Who, or how, are these myths designed, coordinated across media outlets and nations, disseminated and maintained in the public mind? 

 

 

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false flag integration

SP-

So my question is can the 9/11 False Flag be integrated into this pattern of "there is no overarching  conspiracy?"  Not just the False Flag itself, but what appears to be a coordinated re-engineering of the world based on this event.

Definitely the period 1990-2001 was one where the national viewpoint moved from "peace dividend" to "GWOT"; it was as if someone didn't want to take the US off the cold war footing after 1989. My parallel would be Harry Truman's desire to "scare hell out of the American people" in the post-war period in order to get America re-armed to fight the Cold War.  Its pretty clear this US post-cold-war rearmament has happened; what's unclear is why.

So 9/11 would come under the heading of "deep state operations."

The more standard "political science" (budgetary/power/bureaucratic) explanation is, military and intelligence services were not happy about Clinton's attempt to collect the "peace dividend" and felt it was important to demonstrate that the world was still a dangerous place.  Likely those groups felt that strong viligence and a capable military was required to navigate what they viewed as tough times ahead (long-term LTG, resources, etc).  Hence we got GWOT, mass surveillence, budget increases, and an overall tightening of control.  In this scenario, the greater deep state (which loosely encompasses the deep state within the Five Eyes nations - US, UK, Canada, Australia, New Zealand, with US leadership) most probably did not organize the attack themselves, but they could have allowed it to happen and/or were prepared to take advantage of it when it did.  "Chance favors the prepared mind."  (WTC 7 could have been an example of "taking advantage")  They also:

  • didn't want their budgets cut and their group's influence diminished
  • see the world as a dangerous place - terrorists with nukes - and want their "soft, democratic" nations to be as paranoid as they are
  • see resource wars coming; they are believers in peak resources, and a whole bunch of energy is sitting on the other side of the "fault line"
  • know that it takes quite a while to build a capable military; better to have one in place ahead of time rather than scramble at the last minute when the actual threat appears
  • Disclosure of peak resources issue might exacerbate the danger, if discussed openly.

The less conventional explanation is, a similar (but much smaller) group of deep state actors is aware of an ongoing external threat from off-planet, perhaps starting at or near the dawn of the nuclear age, and that over time, that group has diverted a considerable amount of funding from the military budget to development of technology in order to confront the potential (or real) off-planet threat.  Anything (such as peace breaking out) that threatens to decrease that budget is seen as an existential threat to the planet, and must be dealt with by any means necessary.

Second (CAF, "black budget") explanation.  Deep state:

  • needed to have a justification for continued large military spending
  • needed a justification for mass surveillence - dual purpose goal: domestic political control via complete information on everyone to keep that funding coming, plus actual defense "early detection" needs.

And perhaps its a plan within a plan.  Smaller group is read in on case 2, with the larger group focused on case 1.

But I don't believe this is some "control the world" plan hatched back at the dawn of the 1900s.  I guess that's all I was trying to say.  I still don't feel this is some multi generational "world government" attempt.  Its just a group of US/Five Eyes deep state actors doing their best, driven by a medium term threat that they feel cannot be explicitly disclosed without great risk to society.

That's my current thinking anyway.

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