Huey, Dewey & Louie

huey.dewey.louieLooking around the gold sector at some of those who have tried to keep ‘em bullish all the way down.  The peddlers of hope are irrepressible.

Huey writes that gold stocks are well supported by the enormous expansion in the global gold jewelry business.  In fact, according to Huey Western mining stock shareholders stand to reap substantial reward from the relentless growth in gold jewellery demand.

Do you hear that?  Not just have an end put to their misery but if they will just hang in there a while longer they will be in line for a substantial reward… all due to a supposed fundamental underpinning that has nothing to do with the investment case for gold miners… and is not nearly the best driver for gold either.  Keep bafflin’ ‘em with bullshit Huey.  All the way down… unbelievable.

Dewey is getting excited about the Switzerland gold vote.  This has less to do with a fundamental case on gold than Huey’s constant hair brained babbling about Modi, Indian Weddings, China’s demand and whatever else he throws at the wall that sticks.  Dewey recently got some serious play at MarketWatch and indeed is often seen in the mainstream media.  He also sells gold.  How convenient.

As to the Swiss vote, if it goes positive any hype driven upside will not last.  If it goes negative as I think it might, any downside based on that would be bogus as well.

Louie (who I have never heard of before but works with a key silver figurehead who I have heard a lot of) is going on about the streams of gold leaving Western vaults and heading east.  Yes, it’s the old China demand thing.  The same China demand thing that we had to ignore in 2013 and 2014 to our benefit.  Unfortunately, people who keep grasping at these straws laid out by promoters keep finding disappointment after the hype wears off.

A peak in bullshit was during the summer with all the Ukraine/global geopolitical tensions hype.  They will try to find anything to promote a bullish case for gold.  Ebola?  That was a low point as someone I thought reputable allowed himself to get tangled up in a headline about Ebola being the thing that would finally drive gold and silver prices.  It’s a sickness with this sector.  It’s dumb, dumber and dumberer.

I have tried to lay out some signs to look for with respect to the propped up US economy and even further propped up stock markets.  Gold is not going anywhere until economic signals start to come in (it’s why I posted about something as boring as the Semi sector’s book-to-bill ratio).  Some signs are coming, but not nearly to the degree needed.  Meanwhile, these clowns with their theories that have long-since been discredited, ply their trade.

Now of course, as we have been noting all along, technicals may preceded a full fundamental engagement and so technicals I shall continue to use.  There is improvement and being a long-term gold bull I’ll keep on it every step of the way.

But what we will do is real charting (i.e. charting that does not pretend to predict the future), that explains the positive and negative probabilities; not this charting I often see that portrays what the chartist wants it to portray.  Huey actually wrote that “silver bulls need to put on their cheerleading uniforms, and cheer for a breakout.”

You can’t make this up.

[edit]  It is not lost on me that on the internet the delivery of easy to digest content is king.  I sometimes get propositioned about mutually beneficial relationships and what it takes to really rake in the eyeballs.  I get advice like you get X% more opens if you put a shiny picture of gold in an article (seriously). 

I get asked to write bullish things about silver to mutual benefit (i.e. I’d be positioned as a ‘featured’ writer on a given website).  Yes, a lot of the sites you visit that have featured writers – as if they are above the other writers – is simply because those writers took a deal of some sort. 

I have even been labeled an “expert” (which I find a little embarrassing) simply because I write a lot, I guess.  There’s a lot of bullshit out here on the internet folks.  A ton of it.  As I try to become better at marketing my services, I am constantly faced with making decisions to avoid this crap.

I’ve written the word “bullshit” a few times in this post and that speaks for itself.  Information may be free but it is well massaged and thoroughly evaluated for its potential… to sell something… to somebody.

Around the Web

  • Saving Credit (PDF) by one of my personal heroes, Raghuram Rajan, head of the Reserve Bank of India.
  • Updated Thanksgiving week breakdown from QuantEdges.  Just as one little human in the machine, I have noticed over my years in the market that Black Friday almost always seems to be bullish.

 

Another Keynesian Debt Boondoggle

Guest Post by Stealthflation (David Stockman)

Another Keynesian Debt Boondoggle: How Brussels Plans To Turn $26 Billion Into $390 Billion

The desperation and fraud of the Keynesian policy apparatus gets more stunning by the day. Apparently, the pettifoggers in Brussels will soon be announcing a new $400 billion bazooka to blast the euro-economy out of its lethargy. This massive new “stimulus” is supposed to spur all manner of infrastructure and private investment that is purportedly bottled-up for want of cheap capital in the private markets.

Are they kidding? Thanks to the Draghi Put (“whatever it takes”) and the hedge fund gamblers who have gone all-in front running the promised ECB bond-buying campaign, this very morning the corrupt and bankrupt government of Spain can borrow all the money it could possibly need for infrastructure at hardly 2.0% for ten years. And any healthy German exporter or machinery maker can borrow at a small spread off the German 10-year bond which is trading at 73 basis points. For all intents and purposes, sovereigns of any stripe and reasonably healthy businesses in most parts of Europe can access capital at central bank repressed rates which are tantamount to free money.

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Buy the All Time High

Guest Post by James Howard Kunstler

Wall Street is only one of several financial roach motels in what has become a giant slum of a global economy. Notional “money” scuttles in for safety and nourishment, but may never get out alive. Tom Friedman of The New York Times really put one over on the soft-headed American public when he declared in a string of books that the global economy was a permanent installation in the human condition. What we’re seeing “out there” these days is the basic operating system of that economy trying to shake itself to pieces.

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Around the Web

[edit]  Let’s add a new post at NFTRH.com… Semi Equipment Book-to-Bill Ratio Moderating.

  • NFTRH Dovetails some public content (Stocks vs. CPI and vs. Gold) with some of what this weeks report discussed regarding a potential plan for stocks.
  • Josh Brown on how unfairly Jim Cramer was treated by Jon Stewart during the financial crisis.  Well Josh, I had to laugh at this bit… “Had Cramer pushed back and brought up his vigorously alerting the Federal Reserve to the markets’ problems in advance, it would have been entirely justified.”  I remember the screaming monkey show by a guy who became a made-for-TV alarmist after touting touting and touting stocks some more right into and through the top.  Spare me.  I have however, also been a Daily Show fan from day 1; going all the way back to Craig Kilborn.

 

Pity the Sub-Genius

Guest Post by Tim Knight

[edit] Any post with Bob Dobbs is okay by me

They say be careful what you wish for. And, as is often the case, “they” are right.

As a kid, I wished the world favored the smart. I was a smart kid, and it seemed like the world – at least my world – was dominated by bullies and airheads. Might made right, just like in the times of old. My high IQ and love of learning were no match for popular dolts, so a portion of my childhood was wasted just trying to disappear into the background.

Unknown to me at the time, much of the adult world operated the same way. It didn’t take a 1123-sublot of intellect to have a respectable, enjoyable middle class existence in the world of the 1970s. The willingness to put in a full day’s work (or, if protected by a union, a portion of a day’s work) was enough to trump the potential impediment of a double-digit IQ. As I’ve mentioned before, my own uncle had a nice house, an even larger vacation home, and plenty of leisure time, and he worked inside the stink of a Louisiana paper mill.

The world did change, however, exactly as I hoped. My first indication was a cover story of California magazine titled “Revenge of the Nerds” with Steve Wozniak’s smiling face and Apple-logo eyeglasses. It turns out the grey matter languishing in my head started to have value. At 15 years of age, I began writing articles for nationally-distributed computer magazines. At 16 years old, I wrote my first published book, which was followed by a couple dozen others. I was earning enough money to buy a Porsche in high school. It was suddenly cool – and profitable – to be smart.

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NFTRH 318 Out Now

We begin the report with some interesting developments in the Semiconductor Equipment sector, which is where it (‘it’ being the phase where a Semi Equip. ramp up implied coming strength in ISM, ‘jobs’, economy) all began nearly 2 years ago in January of 2013.

We continue through the global economy, implied confidence in policy making, the US stock market’s ‘to blow off or not to blow off?’ question and so much more.

A good, solid report as most of them have been because like or not what is going on lately, the markets have been very readable and thus, interpretable.

Check out a subscription to the value that is the full NFTRH service. Unless you are a momentum oriented day trader, you will probably be glad you did. Indeed, even if you are a momo you will probably be pleased. ;-)

nftrh318

Memories of 2012 & 2007

Guest Post by Doug Noland

Draghi and the PBOC throw gas on a fire.

November 21 – Reuters (John O’Donnell and Eva Taylor): “European Central Bank President Mario Draghi threw the door wide open on Friday for more dramatic action to rescue the euro zone economy, saying ‘excessively low’ inflation had to be raised quickly by whatever means necessary… ‘We will continue to meet our responsibility – we will do what we must to raise inflation and inflation expectations as fast as possible, as our price stability mandate requires of us,’ Draghi said… ‘If on its current trajectory our policy is not effective enough to achieve this, or further risks to the inflation outlook materialise, we would step up the pressure and broaden even more the channels through which we intervene, by altering accordingly the size, pace and composition of our purchases.’ ‘Draghi all but announced that the central bank will step up monetary easing soon. Mr Maybe has become Mr Definitely,’ said Nick Kounis, an economist with ABN Amro. …Draghi’s remarks were almost as dramatic as his ‘whatever it takes’ speech in the summer of 2012 with which he pulled the euro zone back from the brink. Having earlier in the week pointed to early signs of improvements, Draghi on Friday said the economic situation remained difficult and the latest business survey suggested a stronger recovery was unlikely in the coming months.”

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Investors Hated Gold…

Guest Post by EWI

Investors Hated Gold at Precisely the Wrong Time: What About Now?

Sentiment extremes often foretell major turns in financial markets

Editor’s note: You’ll find the text version of the story below the video.

I came across this sentence in an article about gold:

Nobody expects gold prices to turn up soon…

Another observer put it this way:

There doesn’t seem to be anything on the horizon that will make gold prices go up.

It would be easy to think these comments published last week, when gold’s price reached a 4 1/2 year low ($1,131.85).

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How Fed’s ZIRP is Fueling the Next Subprime Bust

Guest Post from StealthFlation (David Stockman)

Deformations On The Dealer Lots: How The Fed’s ZIRP Is Fueling The Next Subprime Bust

On any given day, Janet Yellen is busy squinting at 19 essentially meaningless labor market graphs on her “dashboard”, apparently looking for evidence that ZIRP is working. Well, after 71 months of zero money market rates—-an unprecedented financial absurdity—-there are plenty of footprints dotting the financial landscape.

But they have nothing to do with sustainable jobs. Instead, ZIRP has fueled myriad financial bubbles and speculations owing to the desperate scramble for “yield” that it has elicited among traders and money managers. Indeed, the financial system is literally booby-trapped with accidents waiting to happen owing to the vast mispricings and bloated valuations that have been generated by the Fed’s free money.

Nowhere is this more evident than in the subprime auto loan sector. That’s where Wall Street speculators have organized fly-by-night lenders who make predatory 20% interest rate loans at 115% of the vehicle’s value to consumers who are essentially one paycheck away from default.

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Draghi Speaks the Truth

Draghi Speaks the Truth; ECB Will ‘Do What it Must’

Words are important.  This is not just a headline, it is a reality…

Draghi says ECB will ‘do what it must’ on asset buying to lift inflation

Not ‘do what it thinks would be the best course for the European economy’, not ‘choose the path of least resistance in guiding the financial system to recovery’… the ECB will DO WHAT IT MUST.

As I have written til I’m blue in the face for the last 10 years, we are in the age of ‘Inflation onDemand‘©, 24/7 and 365.  “…do what it must”… let that sink in for a moment.

Japan is trying to kill the Yen, China is dropping interest rates and the world over we have a rolling inflationary operation that is little more than a game of Whack-a-Mole.  BoJ popped up a couple weeks ago and now this one…

draghi
Source: MarketWatch

US Situation

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