26 August 2014

Gold Daily and Silver Weekly Charts - Statism is Relativism With Reference Only To Itself

"If relativism signifies contempt for fixed categories and those who claim to be the bearers of objective immortal truth, then there is nothing more relativistic than Fascist attitudes and activity.

From the fact that all ideologies are of equal value, we Fascists conclude that we have the right to create our own ideology and to enforce it with all the energy of which we are capable. ”

Benito Mussolini, Diuturna

That philosophy described by Benito is fiat with a capital 'F.'  

In a fascist or more properly statist regime, the state is above all else.  All values, including money, are whatever we say that they are, to the extent that the state can back them up with whatever amount of fraud and force that are required.  Everything that a tyrant or tyrant state does is legal, because they hold their power as the ultimate source of the law, without the appeal to reasonableness or recourse to equanimity.

This is directly opposed to the principle of a higher justice that is embodied in the rule of law.   There can be no real independent justice if there is no value transcending human power.  If there is no standard of truth, then all ideas are equally meaningless and without inherent value unless backed by power and the will to decree 'let it be done.'  

A trillion dollars may be represented by market tested legal debt, by a finite store of gold, a single platinum coin, or the stalk of a rotting turnip, if we say that it is so.  All of these ideas are equally true says the sophist, and all value is arbitrary, to be decided by the will of the state.

This is the very blueprint for abuse from the extremes of both the left and the right, the statists of the Socio-Political Continuum who see power as the greatest good, whether their perspective is from the left or the right.

The great American innovation was to claim that certain values are self-evident, true without contingency to a counterparty, because they have been endowed as a part of nature by a transcendent power.   They may have made sometimes strong distinctions between human religions and that transcendent power, but the acknowledgement of the subordination of the law to certain higher values is unmistakable.  And because those values did not come from the state, they are 'inalienable' even by the state.

Yes, we can argue about the implications, dimensions and definitions of rights and freedoms.  But we can never cynically dismiss them as did the statists of the 20th century, most of whom also by necessity adopted a state religion, from state atheism to a vague neo-pagan mythology of the blood or some other state sponsored belief that was a tool of their official will.

I know this should be obvious, but it is remarkable how easily people can forget the basis for the great American experiment and the principles that inspired it.  It is the philosophical notion of the legal restraint of power and accountability of government to its source in the people themselves endowed with values and privileged by a power above the state.

Now, one can certainly argue how those standards will be incorporated into the law, and what those standards ought to be in practice.  But it is undeniable that there must be non-arbitrary standards, and that the law is not in any way sufficient to itself.  This is no form of legalism or a religion of the law. 
The law itself is answerable to those standards of authority granted by the consent of the governed with the bounds of recognizing that which exists transcendently.
"If there's no God and no life beyond the grave, doesn't that mean that men will be allowed to do whatever they want?'  

'Didn't you know that already?' he said and laughed again. 'An intelligent man can do anything he likes as long as he's clever enough to get away with it."

Fyodor Dostoevsky, The Brothers Karamazov
And once again, I am not saying that there ought to be a gold standard per se. Not at all. There are many ways to set standards and maintain them, with gold having many of the key characteristics of a good external standard.  And so it can inform us by its historical example.
All things can be turned to evil, even inherently good things.  Our system is capable of corrupting almost anything including the word of God itself, and our own Constitution if we allow it.   Our hypocrisy knows few bounds, and our law has too often descended into a mere ritual of legality with little enough reference to justice.

But those things that are transcendent of human power and our pride at least remind us that we are doing evil, and that we are not sufficient unto ourselves as the arbiters of the universe. 

But I will go so far to say that virtually every would-be statist who wishes to set themselves up as an authority by fiat will almost certainly find gold to be troublesome, an impediment, and something to be feared and if possible, controlled.  

Like private conscience, and a belief in a power greater than the power of the state, gold whispers in the silence to us, that something is terribly wrong.

It was a quiet option expiration on the Comex today.  More on that tomorrow.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Two Markets - First SP 500 Close Over 2000

"Now listen to the first three aims of the corporatist movement in Germany, Italy and France during the 1920s. These were developed by the people who went on to become part of the Fascist experience:
  1. shift power directly to economic and social interest groups;
  2. push entrepreneurial initiative in areas normally reserved for public bodies;
  3. obliterate the boundaries between public and private interest -- that is, challenge the very idea of the public interest.
This sounds like the official program of most contemporary Western governments.”

John Ralston Saul, The Unconscious Civilization
Wall Street was mighty pleased that the cash SP 500 market managed to squeeze out a close over 2,000 for the first time ever.  Huzzah.  As you can see from the chart, the SP futures markets did not stick a close over that magic wash and rinse number.

There was intraday commentary about the two markets that exist in the US today. One market is for the wealthy and powerful, who often act with privileged information, in secret, and selective enforcement of law.  And there is another market for everyone else.

If you are a wealthy insider, you are allowed to see the 'real' market prices.  And if you are not, you get to see the market which they wish you to see.  This has been designed into the system.  This is not some theory. This is what exists today.   There are more twists and turns to this, with asymmetric access to information becoming institutionalized. But this is a nice example.

And if you wish to know which class of citizen you are, then chances are extremely high that you are drinking from the fountain reserved for 'other' whether you realize it or not.  Just be thankful for what they may give you.  As a scam it is so simple that it is almost perfect: brazen, blatant, effective.

Yes we can.

Have a pleasant evening.

A Tale of Two Markets: One for Wealthy Insiders, And Another For the Rest of Us

"We run carelessly to the precipice after we have put up a façade to prevent ourselves from seeing it.”

Blaise Pascal
Here is a brief excerpt from an article today by the amazing team of Pam and Russ Martens at Wall Street On Parade titled, Are U.S. Markets Liquid and Deep or Rigged and Broken? I suggest you read the entire article when you have the opportunity as this is just a snippet.

"...the SEC which oversees stock exchanges has allowed both the New York Stock Exchange and Nasdaq to create a bifurcated market. The unsophisticated investor is given trading data on which to base trading decisions on a slow data feed called the Securities Information Processor or SIP. The SIP is not only slow in getting the data to the technology-challenged investor, but it has limited data.

For the rich and powerful on Wall Street who can afford massive fees, there is another data feed offered by the exchanges called the Direct Feed. The Direct Feed data, which has far more useful information, arrives in the hands of High Frequency Traders and Wall Street’s proprietary traders ahead of the arrival of the SIP data. This allows the Direct Feed users to buy a stock on the cheap and sell the stock back to the SIP user at a higher price...

The New York Stock Exchange and Nasdaq, which also have a mandated regulatory role to ensure that their markets are fair and non-discriminatory, have allowed the two-tiered market to exist because they are collecting hundreds of millions of dollars a year selling the SIP to the dumb money and the Direct Feed to the smart money..."

For someone that is not drinking the daily dose of electronic kool aid from the mainstream media, this is a systemic, institutionalized control fraud that inevitably leads to a financial crisis.   And a close survey of the markets today might lead one to observe, 'My God.  These lunatics are going to do it again.'

That is what it is in plain words.   That is what the price discovery of the US, which controls the reserve currency of the world and sets many of its key prices, is based upon.   This is not some rogue trader, or anomalous abuse.  This is fraud that is deeply woven into the very fabric of the system, and is widely tolerated with a self-serving wink and a nod.

For example, the privately held London Metals Exchange was dismissed as a defendant in the aluminum price fixing case today because it is immune from US prosecution as 'an organ of the UK government.'  That is quite an admission, and some organ.   Droit du seigneur.  Reminds one of the motive for dismissal insinuated by the Barrick motion in the Blanchard gold manipulation suit.

What is it going to take to wake people up?  What markets are left that have not been exposed as deeply rigged at their core?

A big part of the rest of the world isn't buying it anymore. And that is taking us into some very deep, dark, and uncharted waters. 

25 August 2014

Gold Daily And Silver Weekly Charts - Comex September Options Expiration Tomorrow

Just another day on Hamburger Hill.

Been down so long, it looks like up to me.
Would never know about such things happening with silver bullion in the real world if you are just watching Madame Tussauds-on-the-Hudson, also known as the Comex Keno Parlor and Bullion Bucket Shop.
Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Sittin' On Top of the World

"On desperate seas long wont to roam,
Thy hyacinth hair, thy classic face,
Thy Naiad airs have brought me home
To the glory that was Greece,
And the grandeur that was Rome."

Edgar Allen Poe, To Helen

I think we are getting close to the end of this wash cycle. I'd expect a sideways chop for a while, barring false flags and other events unexpected.

VIX shows we are back to relative complacency. Big change from the bottom of the rinse cycle, isn't it? Can't be too skeptical or cynical these days.

It certainly looks like the Imperium Anglo-americae will last for at least one thousand years.

Have a pleasant evening.

Some Wisdom About Leadership From the Depths of the Depression

"Management is doing things right; leadership is doing the right things."

Peter Drucker

In other words, management is about the process of organization. A manager may be a great organizer, but a terrible leader. Management is an essential skill. But it lacks traction in times of great change.  Management will almost always choose what is expedient, but a leader will do what is both practical from within a set of choices that are right.   Superior management skills in the hands of the efficiently immoral, or even amoral, can create a hell on earth.

Leadership is about the substance, the overwhelming sense of what is wrong and what is right based on set of principles that can energize a people to accomplish goals greater than the sum of their parts. The vision of a leader can guide a people through a time of change and turmoil, where the tradeoffs are not clear, and in dispute. Leadership is not possible without a dedication to a set of principles that transcend mere operational goals. 

Goals must be joined together in a coherent manner. To merely state that our goals are low inflation and high employment are not sufficient.  How do they complement one another?  From whence do they derive?  How are priorities to be set between them?

And above all, leadership is more than a title, and power, and high pay.  A leader must have a natural empathy and affinity with those whom they lead, and that concern must be closely aligned and apparent.  They understand the worries and concerns of their people, and more importantly can speak directly to them with not only words but action. Leadership sets an example, and adheres to a set of principles greater than itself.  If the principles are worthy, and the strategy well thought, and the management sound, then the chances of success are good.

The social safety net is certainly important, in that it keeps individuals and families from falling into tragedy and despair because of our no-longer-so-recent financial dislocation.

However, direct government assistance is best as a temporary salve to a problem, especially a natural disaster.  It is not effective as a permanent state of affairs.

The great shortcoming of the liberal economists has been to ignore those conditions which have caused the ongoing financial crisis, which has been ebbing and flowing since at least 2001.   By the way and in their defense, the greater failure of their adversaries or counterparties is to address themselves fruitfully to the problems and conditions of the real world, rather than a world of top down idealisms and slogans of their own creation.  The liquidationists and austerians seek to create a clean slate by blowtorching the landscape of those things that offend their purely intellectual sensibilities, and the victims be damned.

Adding stimulus to a system that is broken only produces more of what has gone before, because the situation has not changed sufficiently to restore the economy to balance, to an equitable distribution of its growth in both profits and wages.

Thanks to Pam Martens for reminding us of that prescient speech by Franklin Roosevelt, delivered in the depth of the Great Depression, about the need for leadership and new ideas, especially those of progressive reform. Memo to Fed: Interest Rates Are a Sideshow; the Problem is Income Inequality Her essay rightly takes the Fed to task on their trickle down approach to The Recovery which is inexcusable in a monetary authority which is also a major banking regulator and economic policy influencer. 

The problem is not so much the inequality itself. No, the problem is in a corrupt system that routinely gives the upper hand to powerful private organizations in formulating political and policy decisions in the halls of Congress and the Courts.  Over time this transforms the economy into a machine for transferring wealth from the public to the Banks, and the corporations that have sprung up around them.

The problem is not so much the inequality, but the corruption of a system intended to reward productivity with a similar amount of benefits for labor as afforded to those who organize it, for the benefit of all.   This is the difference between market capitalism, where labor is fairly compensated, and slavery.  

And it is the proper role of government to address the imbalances of power amongst its various constituents to maintain equal protection, as much as it is the role of government to guard against incursions of the powerful from abroad.

And when government falls into this trap of corruption by private power, the solution is not to further diminish government, giving even more free reign to private power. The solution is to reform and restore balance between public and private interests.

Where power in an economy falls into such an imbalance, and concentrates in fewer and fewer hands, that society will find itself increasingly trying to remain standing on a two legged stool, held up increasingly by more fraud and more force, and the steady erosion of justice and the rule of law.

"I believe that the recent course of our history has demonstrated that, while we may utilize their expert knowledge of certain problems and the special facilities with which. they are familiar, we cannot allow our economic life to be controlled by that small group of men whose chief outlook upon the social welfare is tinctured by the fact that they can make huge profits from the lending of money and the marketing of securities--an outlook which deserves the adjectives 'selfish' and 'opportunist.'

You have been struck, I know, by the tragic irony of our economic situation today. We have not been brought to our present state by any natural calamity--by drought or floods or earthquakes or by the destruction of our productive machine or our man power. Indeed, we have a superabundance of raw materials, a more than ample supply of equipment for manufacturing these materials into the goods which we need, and transportation and commercial facilities for making them available to all who need them. But raw materials stand unused, factories stand idle, railroad traffic continues to dwindle, merchants sell less and less, while millions of able-bodied men and women, in dire need, are clamoring for the opportunity to work. This is the awful paradox with which we are confronted, a stinging rebuke that challenges our power to operate the economic machine which we have created.

We are presented with a multitude of views as to how we may again set into motion that economic machine. Some hold to the theory that the periodic slowing down of our economic machine is one of its inherent peculiarities--a peculiarity which we must grin, if we can, and bear because if we attempt to tamper with it we shall cause even worse ailments. According to this theory, as I see it, if we grin and bear long enough, the economic machine will eventually begin to pick up speed and in the course of an indefinite number of years will again attain that maximum number of revolutions which signifies what we have been wont to miscall prosperity, but which, alas, is but a last ostentatious twirl of the economic machine before it again succumbs to that mysterious impulse to slow down again.

This attitude toward our economic machine requires not only greater stoicism, but greater faith in immutable economic law and less faith in the ability of man to control what he has created than I, for one, have. Whatever elements of truth lie in it, it is an invitation to sit back and do nothing; and all of us are suffering today, I believe, because this comfortable theory was too thoroughly implanted in the minds of some of our leaders, both in finance and in public affairs...

No, our basic trouble was not an insufficiency of capital. It was an insufficient distribution of buying power coupled with an over-sufficient speculation in production. While wages rose in many of our industries, they did not as a whole rise proportionately to the reward to capital, and at the same time the purchasing power of other great groups of our population was permitted to shrink. We accumulated such a superabundance of capital that our great bankers were vying with each other, some of them employing questionable methods, in their efforts to lend this capital at home and abroad.

I believe that we are at the threshold of a fundamental change in our popular economic thought, that in the future we are going to think less about the producer and more about the consumer. Do what we may have to do to inject life into our ailing economic order, we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.

It is well within the inventive capacity of man, who has built up this great social and economic machine capable of satisfying the wants of all, to insure that all who are willing and able to work receive from it at least the necessities of life. In such a system, the reward for a day's work will have to be greater, on the average, than it has been, and the reward to capital, especially capital which is speculative, will have to be less. But I believe that after the experience of the last three years, the average citizen would rather receive a smaller return upon his savings in return for greater security for the principal, than experience for a moment the thrill or the prospect of being a millionaire only to find the next moment that his fortune, actual or expected, has withered in his hand because the economic machine has again broken down.

It is toward that objective that we must move if we are to profit by our recent experiences. Probably few will disagree that the goal is desirable. Yet many, of faint heart, fearful of change, sitting tightly on the roof-tops in the flood, will sternly resist striking out for it, lest they fail to attain it. Even among those who are ready to attempt the journey there will be violent differences of opinion as to how it should be made. So complex, so widely distributed over our whole society are the problems which confront us that men and women of common aim do not agree upon the method of attacking them. Such disagreement leads to doing nothing, to drifting. Agreement may come too late."

Franklin D. Roosevelt, Address at Oglethorpe University, May 22, 1932