Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver Holding the Line On a Breakout

Commodities / Gold and Silver 2013 Sep 08, 2013 - 06:40 AM GMT

By: Jesse

Commodities

Today was filled with cross currents, as the Non-Farm Payrolls report came in light, and looked even worse if you peered into the details of it.

The unemployment rate is less meaningful now because of the large number of people who have been long term unemployed and are falling off the unemployment benefits rolls. Labor Participation Rate and average workweek are therefore a bit more important. And things are not looking good because the jobs that are being created tend to be low wage and often part time.


There is no real sustainable recovery, except for a few sectors that were ironically at the heart of the financial crisis five years ago: FIRE sector and the Beltway Elites. Except for some regional pockets of recovery, most everyone else is just getting by.

As you know the failure to reform a broken system is very high on the list of policy failures. Close behind are the Fed's trickle down stimulus approach, and the sequester and failure to act meaningfully on the fiscal side by the political class.

But the more jarring event today was Putin's strong stand on Syria. The case the US has been making is weak, and allies are few. It seems like the Obama Administration is listening to a few groups and advisers, and is tone deaf to what the mass of the public and the rest of the world is saying. This is not to say that Putin is right.

Rather, Putin is playing chess, and Washington is playing checkers, and also playing footsie under the table with the usual special interests, and ignoring the persuasion that must accompany any movement to military action. And the explanations and evidence that must accompany a grave decision were facing a high bar given the context of a war weary public that feels, with much justification, that their politicians are not listening to them, and are quite willing to say whatever it takes to get their way.

When a former US president, Jimmy Carter, says that the country no longer has a functioning democracy, it is hard to make a case that you just didn't know things were that bad. Well, they are, and they are getting worse with every week that passes and the political class continues to muddle through a credibility trap of their own making.

So in times of uncertainty and deception, when it is difficult to correctly price risk, people seek safety in certainty where they can obtain it, and that involves places a percentage of their wealth in things with less counterparty risk.

And so we saw a rally in gold and silver, although there is quite an effort behind the scenes to keep them from breaking out. They will break out, eventually, and the shorts are going to be hard pressed to deliver the bullion which has been rehypothecated many times. And when this does result in a market dislocation, the economists and the politicians and the regulators will stand open mouthed and say, 'who could have known?'

So let's see what happens. Things are not all that bad from an historical perspective, unless you have a somewhat romantic view of the past. My grandparents and parents faced things that were just as bad or worse, and I myself grew up during the Cold War, the Cuban missile crisis, and Vietnam, and riots that tore cities apart.

I remember as a young boy riding a public bus with an overhead advert of Khrushchev pounding a shoe on the table saying, "We will bury you." Now we have the Tea Party and would be demagogues, and then we had the Dixiecrats and Joe McCarthy. And three of our greatest lights for hope, John F. Kennedy, Martin Luther King, and Robert F. Kennedy, were all brutally killed by assassins bullets within a few years.

If you were not a part of it, it is hard to imagine what it was like. Some of my friends say that we are doomed, and things are much worse now than they ever were. Well, they are like this for most generations, that face difficult, almost seemingly insurmountable obstacles. And yet life goes on.

But certain times call for certain actions, and now is a good time to look to your portfolios, and to remain calm and discerning in your thoughts as you take whatever measures that you can to not become a part of the problem, and look to your families and friends.

Have a pleasant weekend.


By Jesse

http://jessescrossroadscafe.blogspot.com

Welcome to Jesse's Café Américain - These are personal observations about the economy and the markets. In plewis

roviding information, we hope this allows you to make your own decisions in an informed manner, even if it is from learning by our mistakes, which are many.

© 2013 Copyright  Jesse's Café Américain - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Jesse Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in