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    Gold Down Despite Inflation Rising Like 1974

    Weekly Market Update - 7/23/2021
    by davefairtex

    Sunday, July 25, 2021, 8:03 PM

Market Update

The metals are mostly in a downtrend, but there are hints of a reversal in silver. The silver Open Interest is showing signs of the “wash and rinse” cycle ending – silver’s OI hasn’t been this low since mid-2020. Silver’s (single candle) reversal bar looks reasonably strong. Silver’s friend copper is more clearly breaking higher; copper’s OI is also near a 1-year low as well. And after getting chopped in half in 10 weeks, lumber too may be putting in a low. It is possible that the modest “commodity correction” has run its course.

The “not-so-transient” inflation thesis remains intact. My inflation gauge: the PPI (Producer Price Index), which has been around since 1913. This month it was up +1.79% m/m, or an annualized 21%, with y/y change: 19%. Last time we were here? 1974.

Note that behind the scenes, the Fed is engaging in reverse repos (36B) almost as fast as they print money. The Fed Giveth, and in the same moment, The Fed Taketh Away. I see this as them ending the printing campaign, while pretending not to do so. Who wants a market crash before everyone’s ready for it?

After dipping a bit, SPX is once again making new highs. This is probably helped by the slowly rising dollar (which suggests capital inflows from overseas), as well as a confirming rebound by crappy debt. Call it mild risk on.

Items that caught my eye this week:

Uncle Sam is arranging free transport for illegals coming across the border, presumably to avoid them piling up in camps in Texas. The whole “Kids in Cages” thing was embarrassing, and this is how they’re avoiding it. Sure, free plane flights (paid for by You and Me) are maybe a bit more expensive than a mass holding cell on the Texas border, but importing a bunch of new workers who won’t complain is well worth the cost.

https://www.dailywire.com/news/report-biden-administration-quietly-flying-migrant-children-into-tennessee-gop-leaders-blast-administration


Vaccine effectiveness is declining rapidly in Israel, which has served as the country-level clinical trial for mass vaccination.

Currently, Israel says the shot is:

  • 39% effective against infection
  • 41% effective against symptomatic COVID.
  • 91% effective against serious illness.

https://www.timesofisrael.com/israeli-uk-data-offer-mixed-signals-on-vaccines-potency-against-delta-strain/


Little known fact: anyone can run for Speaker of the House – it doesn’t have to be a member of Congress, that’s just the convention. The Speaker is 3rd in line to the Presidency. Rumor is, the Bad Orange Man is thinking of applying for the slot. In the background, I hear the MSM cheering. Their audiences have dropped by more than half since El Hombre Naranja Malo was exiled to Florida. How could this play out Well let’s say those vote audits revealed some shenanigans in some Congressional races…probably won’t happen, but, you never know.

https://www.armstrongeconomics.com/international-news/politics/anyone-can-run-for-speaker-of-the-house-in-congress/


“The right” is now learning what “the left” learned back in the 70s: the FBI loves to stage crimes, and then arrest people for “committing” them. Back in the 70s, Hoover called it “COINTELPRO” and the op was run on black people. Today, Wray calls it “white supremacy”, and the op is run on white people. In reality, the FBI appears to be just the enforcement arm of the Oligarchy – one reason I’m am disturbed by the thought of a defunded “local” police, and increased funding for “Federal” police.

https://news.yahoo.com/group-accused-plotting-kidnap-michigan-144724252.html


The unelected Italian PM – Mario Draghi, former ECB chair – has just mandated the use of a vaccine passport. Of course, no mention was made of immunity from prior infection. Get the shot or else! I guess Mario is “doing whatever it takes” once more. So how exactly did he get to run Italy again?

The new measure forces people to show proof of vaccination if they want to engage in any of a wide range of day to day activities like eating indoors at restaurants. It also makes getting the jab compulsory for healthcare workers.

https://www.thegatewaypundit.com/2021/07/another-uprising-thousands-protest-italy-mandates-health-pass-will-restrict-unvaccinated-many-activities/


Up-and-coming Artist Hunter Biden is planning a schmooze session with his potential art buyers prior to the sales. Price tag for the apparently high-demand art items: “up to” $500,000. Related: “The president has established the highest ethical standards of any administration in American history, and his family’s commitment to rigorous processes like this is a prime example.”

Curiously, the tone of the CBS piece on the story was actually mildly critical. Is this the start of a new trend?

https://www.cbsnews.com/news/hunter-biden-artwork-for-sale-meeting-buyers/


Pizza-lover, and long time political operator Tony Podesta has signed on to be a lobbyist for Huawei. Nothing says “I love my country” like working for the CCP.

https://www.politico.com/news/2021/07/23/huawei-hires-tony-podesta-500649


So the moratorium on evictions and foreclosures will end July 31st. Does that herald a flood of evictions and foreclosures and – gulp – downstream bank failures? No signal for that outcome from stock prices. FHA has signed up for “loan mods for everyone” – of payment terms, but I’m guessing, not balances. Will that be enough? Maybe that reduces the impact. But I still think there will be defaults, for folks with lockdown-destroyed businesses who have just lived in their homes for free for the last year or so. They’ll have to sell. I mean – I think. This is one “grey swan” on the very-near-term horizon. I’m going to be watching the “Mean Home Sale Price” series (381k, highest value ever) for signs of “too much supply.” No sign of that at all yet.

Under the COVID-19 ALM program, eligible borrowers get a minimum 25% reduction in their monthly mortgage payment’s principal and interest portion.


The COVID-19 ALM program is automatic: servicers must review eligible borrowers for this option and provide loan modification documents that will significantly reduce the borrowers’ monthly payments. Borrowers don’t need to contact their lender or servicer to get this modification.

https://www.nolo.com/legal-updates/fha-announces-new-covid-19-loan-modification-program-for-mortgage-borrowers.html


Finally – it now looks as though we’re going to get those boosters we’ve been waiting for, to extend (for another six months) the protection of the shots that were administered over the last six months. Of course, normally your tetanus shot lasts for 10 years – but that’s the Old Normal. Shots every six months – that’s the New Normal.

While the article is written in a relatively “soft” tone (“we forgive you, vaccine-companies-who-can-do-no-wrong, for your failures”), the headline picture – a man with an armful of multi-colored syringes – conveys an entirely different, much more alarming tone. “You will need 20 shots to be safe”, it seems to suggest. Is Pharma starting to lose MSM?

Vaccine manufacturers have been warning for months that some Americans could require booster shots as soon as September.

https://news.yahoo.com/biden-officials-see-booster-shots-090012247.html


Related: a humor break. Alex Berenson has been preparing for this moment for quite some time:

Attention citizens! Your Dept. Of Pandemia wishes to report that it is retiring the word “booster.” Henceforth, citizens shall refer only to “bonus vaccines.”

JANUARY 2022: BIDEN BLAMES BOOSTER-HESITANT FOR FIFTH WAVE, GOVERNMENT ANNOUNCES FREE PAID SIDE EFFECT WEEK

MODERNA STOCK HITS $3000 AS REST OF MARKET COLLAPSES. “TRUST THE SCIENCE,” FAUCI TELLS RAND PAUL.

https://twitter.com/alexberenson

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22 Comments

  • Sun, Jul 25, 2021 - 11:59pm

    #1
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    9

    silver & copper

    That low OI I was mentioning.  Theoretically, that's the banksters fleeing prior to the rally that may be on the way.

    And copper.  Low OI there too.  What bankster wants to be short if inflation turns out not to be transitory after all?  Copper may be leading.

    Lumber may be putting in a low too.  Quite the drop though.  Looks like there's a wash & rinse cycle for lumber that basically stopped happening with that monster rally that happened in March 2021.  This tells me the banksters were ... concerned  ... about how high lumber could actually go.  Otherwise they'd have jumped in short.  Which they didn't.

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  • Mon, Jul 26, 2021 - 12:07am

    #2
    Grover

    Grover

    Status: Gold Member

    Joined: Feb 15 2011

    Posts: 1027

    15

    Note of Appreciation

    Dave,

    I, for one, missed all of the above for far too long. Glad your toe is back in the water.

    Grover

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  • Mon, Jul 26, 2021 - 12:27am

    #3
    hail

    hail

    Status: Member

    Joined: Jul 06 2012

    Posts: 47

    7

    Note of appreciation

    I second what Grover said.

    Especially appreciate the OI info on silver.

    I live in Southern Oregon and the lumber mills have double the amount of logs sitting in their yards waiting to get milled.  "Transitory" labor shortage.  The miners might experience an uptick in production also as labor comes back.

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  • Mon, Jul 26, 2021 - 12:45am

    #4

    thatchmo

    Status: Silver Member

    Joined: Dec 13 2008

    Posts: 331

    9

    Market Update.....

    A sight for sore eyes!  Welcome back, Hombre!  Aloha, Steve

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  • Mon, Jul 26, 2021 - 6:02am

    #5

    sand_puppy

    Status: Member

    Joined: Apr 13 2011

    Posts: 1928

    5

    And BTC popped last night

    From $34,000 at dinner time to $38,000 by the time I went to bed.

    Love your new format!

     

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  • Mon, Jul 26, 2021 - 6:03am

    Carl

    Carl

    Status: Member

    Joined: Jul 17 2008

    Posts: 56

    5

    Appreciated

    Oh, yes. Good to have you back.

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  • Mon, Jul 26, 2021 - 7:30am

    #7

    Tycer

    Status: Gold Member

    Joined: Apr 26 2009

    Posts: 381

    3

    🥲

    I’m so happy.  What a nice surprise. Thanks Dave!

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  • Mon, Jul 26, 2021 - 10:06am

    #8
    JimboJim

    JimboJim

    Status: Bronze Member

    Joined: Nov 14 2017

    Posts: 82

    2

    Yay!

    At first, when I saw the title, I thought my browser was loading an old post of yours - and then I looked at the date. Keep 'em coming Dave!!

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  • Mon, Jul 26, 2021 - 10:18am

    #9
    MGRS

    MGRS

    Status: Silver Member

    Joined: Feb 28 2013

    Posts: 185

    2

    Wooohooo!

    I had to triple check the date to make sure this wasn't an old one that got bumped by a spam-bot... so happy to have this column back!

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  • Mon, Jul 26, 2021 - 10:33am

    #10

    jturbo68

    Status: Silver Member

    Joined: Aug 04 2009

    Posts: 270

    1

    Thx Dave

    Glad to see your report

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  • Mon, Jul 26, 2021 - 11:46am

    #11
    FooBarr

    FooBarr

    Status: Bronze Member

    Joined: Oct 21 2010

    Posts: 124

    7

    Dave, can I borrow your brain for a day?

    Not the reptilian part, but just a chunk of the critical thinking cortex thingy....?

    I do appreciate your post, and as I speed scroll through PP, you're always one of the gems I normally stop to read.  I confess, I got a bit more neanderthal genetics than most and econ 101/102 was over three decades ago and I was typically hung over.   I'd think it'd be really swell if you could do some John Madden tool action on those charts maybe with some notes.  It'd be a good help for the nuckle-draggin mouth-breathers like me.

    Thanks

    PS. I'll be in the back 40 banging rocks together trying to see if they spark.  Damn limestone......

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  • Mon, Jul 26, 2021 - 1:09pm

    #12
    TWalker5

    TWalker5

    Status: Silver Member

    Joined: Mar 13 2020

    Posts: 199

    3

    Great stuff!

    Thanks, Dave. I’m so glad you’re back!

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  • Mon, Jul 26, 2021 - 3:14pm

    #13
    Nate

    Nate

    Status: Silver Member

    Joined: May 05 2009

    Posts: 570

    3

    awesome

    Really good to have you back.  And A++ on the new format.  Love it.

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  • Tue, Jul 27, 2021 - 1:01am

    #14
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    16

    thanks everyone

    Its nice to have my spot back again.   And its even nicer to do it just once a week!  That way I can focus on the bigger picture, which - I think - is probably more important anyway.

    And - full disclosure - I can't take credit for the new format.  That's Aaron - he said something about "chart overkill."  (Me - I love them all!)   But then I realized, I need to do a better job acting as the filter, so you guys only have to see the ones that are important for this particular timeframe.

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  • Tue, Jul 27, 2021 - 1:34am

    westcoastjan

    westcoastjan

    Status: Platinum Member

    Joined: Jun 04 2012

    Posts: 975

    1

    Hmmm...pick your poison...

    Death by Dave chart overkill or death by Fauci et al jab overkill... No brainer! I have yet to see any adverse events/deaths inflicted from excessive charts.

    You go, Dave! Bring on the chartdemic! 😉

     

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  • Tue, Jul 27, 2021 - 12:29pm

    #16
    DennisC

    DennisC

    Status: Silver Member

    Joined: Mar 19 2011

    Posts: 334

    1

    Woohoo too!

    Anyone need another distraction?  Here's some stuff to look at.  Bored with playing the beginning of the healthcare/vaccine "supply chain" (e.g. pharma/healthcare companies)?  For those with an academic interest, how about researching the end of the "supply chain"?

    Here's an interesting screen:

    https://swingtradebot.com/stocks-tagged-as/10000-funeral

    Kind of in the same category as taxes, IMO.

    [No recommendations here, just offering up the information for further potential research, if interested.  I have no direct ownership in of any of  the stocks listed in the screen.]

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  • Wed, Jul 28, 2021 - 1:52pm

    #17

    Montana Native

    Status: Bronze Member

    Joined: Mar 17 2009

    Posts: 184

    1

    YaY!

    This is awesome content........thanks for your return Dave!

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  • Wed, Jul 28, 2021 - 8:50pm

    #18
    macro2682

    macro2682

    Status: Gold Member

    Joined: Sep 03 2009

    Posts: 407

    2

    China responsible for dollar rise…

    China recently decided that private education companies should be run as non profits.  Shareholders were wiped with the stroke of a pen, reminding investors what they know deep down: nobody really OWNS Chinese equities.

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  • Thu, Jul 29, 2021 - 1:37am

    #19
    PdeB

    PdeB

    Status: Bronze Member

    Joined: Dec 29 2009

    Posts: 53

    3

    Christmas in July

    So great to have you back on the charts, Dave, but the commentary is what I really missed. Thanks to you and Chris for making this a reality again!

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  • Thu, Jul 29, 2021 - 11:58am

    #20
    westcoastjan

    westcoastjan

    Status: Platinum Member

    Joined: Jun 04 2012

    Posts: 975

    0

    Great short read re supply chain and other risks

    https://www.globalresearch.ca/prepare-now-global-supply-chains-risk/5751360

     

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  • Sat, Jul 31, 2021 - 10:16am

    #21
    bubbagreen

    bubbagreen

    Status: Member

    Joined: Jan 22 2016

    Posts: 6

    0

    bubbagreen said:

    Great to hear from you Dave!

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  • Sun, Aug 01, 2021 - 8:58am

    #22
    zekard

    zekard

    Status: Member

    Joined: Dec 09 2017

    Posts: 2

    1

    What’s the point of analysis?

    Can someone please explain to me the need for analyzing gold?

    The price of gold, spot gold in this case, is a contract. Controlled by some sleazy filthy wallstreet cretins that resell it 88:1 physical Troy ounce they have on hand. Spot Gold (and spot Silver) has nothing go do with the intrinsic value of either. The 87 extra Troy Ounces don’t exist, you cannot hold them, or redeem them.

    Here is a forecast: Gold and Silver are the ONLY globally accepted currencies with NO COUNTER PARTY RISK. When the system is reset, be holding both. Meanwhile, take advantage of these bargain prices and buy Physical Gold and Silver if you can find it.

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