The Most Significant Developments of 2011 with Trends in 2012

As always the four great variables in human history are weather, disease, war, and religion.  The first two are of God and the latter of men.

Weather spans a wide range of natural phenomenon including earthquakes, and similarly religion includes secular movements and philosophies such as fascism and communism,  essentially godless religions that involve the ordering of the relationship of the

Warren Pollock Interviews James Kotoulas on MF Global and JP Morgan's Role In Its Bankruptcy

Gold Daily and Silver Weekly Charts - Gold Finishes Eleventh Straight Year Higher

The metals bounced today, but were pushed down into the close on extremely light trading.

I am going to be busy preparing for New Year's Eve but I may post some thoughts on Sunday evening about the year ahead.

Have a Happy New Year everyone.

SP 500 and NDX Futures Daily Charts - SP Cash Finished Year Dead Even

Boring day overall, but the big excitement was that Wall Street was able to bring the cash SP 500 in at dead even for the year.

Have a Happy Holiday everyone. Keep in mind that the US markets are closed on Monday.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Lawrence Lessig: Republic, Lost - The Quiet Coup D'etat

"Money Buys Results In Congress"

Summary: The reason for the failure of the American economy and the inability of the government to address it is because of the corruption and distortions inherent in a system where campaign contributions control the politicians and the policy, and less than one percent of the people control the vast majority of those campaign contributions and therefore the

Chris Powell: Financial Repression

10:35p ET Thursday, December 29, 2011

Referring to Financial Times editor Gillian Tett's December 22 column, "Ties Between Sovereigns and Banks Set to Deepen," to which the GATA Dispatch called your attention the other night with the headline "Citing 'Financial Repression,' FT's Gillian Tett Sounds Like Jim Rickards and Rob Kirby" http://www.gata.org/node/10828, a friend asks:

"Is the message

Gold Daily and Silver Weekly Charts - Painting the Tape Red

There was intraday commentary here.

The thought is that the big metals shorts are hammering the paper prices in thin trading to 'paint the tape' for their year end mark-to-market. 

It smelled like a capitulation today, but as the volumes were so thin I would not care to call it.   But 1524 had the look of a bottom.  Aggressive traders must be chomping at the bit. 

Let's see how the year

SP 500 and NDX Futues Daily Charts - Quiet Days Are Good for Painting

Very light volume day, and the tape was duly painted into the year end.

The commmentary on the financial news networks is so disassociated from reality it is almost like something out of Sunset Boulevard.

I'm ready for my closeup Mr. DeMille.

Five Charts Useful for Framing the Economic Debate in 2012

These charts are from a collection of favorite charts put together by Jared Bernstein from material put out by the Center on Budget and Policy Priorities.

The End of Year Precious Metal Bullion Bear Raid - Another Form of Window Dressing?

Like many others who watch the markets I have wondered what might be prompting this obvious bear raid on the paper precious metals market over past four weeks.

It could be explained by any number of economic developments including the decline of the Euro, but that does not really explain the downward market action which has been sporadic and not associated with news, moreso than fundamental.

Gold Daily and Silver Weekly Charts - Dr. Bernanke's Imaginarium

They bombed the thin markets early on, running the stop loss orders and forcing liquidation not only in the futures but in the related markets like the miners and the ETFs.

The first chart shows this fairly well.

This permits a liquidation of certain assets to occur, profits on related plays and short positions and of course the obtaining of key assets on the cheap for the next ride up.

I

SP 500 and NDX Futures Daily Charts - Light Volumes

Watch for window dressing at the end of week unless Europe blows up.

These are just the preliminary portfolio adjustments no matter how much 'analysis' they may wish to wrap around this dead fish.

History Lesson

History Lesson by Arthur C. Clarke has been one of my favorite short stories since boyhood. It contains an allegorical lesson about the importance of context and assumptions in scientific and historical study. It has served me well throughout the years.

The story is of course an intellectual descendant of Plato's Allegory of the Cave, from Book VII of The Republic, which I also enjoyed as a

Gold Daily and Silver Weekly Charts - Comex, What Is It Good For?

The Comex. What is it good for?

Originally it provided a useful platform for buyers and producers to hedge their risks and set markets based on supply and demand.

Now it seems to have degenerated into a platform for fraudulent price manipulation and the confiscation of productive capital by those who neither buy nor produce, but merely game the system and break the rules, simply because they

SP 500 and NDX Futures Daily Charts - Much Ado About Nothing

Very light volumes.

Lack of interest? Apparently so.

And it looked like most of that thin volume was just the wiseguys tossing the hot potatoes around.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Franklin Roosevelt's 1936 Address

Campaign Address at Madison Square Garden, New York City.
"We Have Only Just Begun to Fight."
October 31, 1936


Senator Wagner, Governor Lehman, ladies and gentlemen:

ON THE eve of a national election, it is well for us to stop for a moment and analyze calmly and without prejudice the effect on our Nation of a victory by either of the major political parties.

The problem of the electorate

Gold Daily and Silver Weekly Charts

Today was hardly worth the time and energy expended to watch them fluff the markets to suit their year end bonuses.

Have a Merry Christmas everyone.

SP 500 and NDX Futures Daily Charts

As boring days go this one was right up there.

Gold Daily and Silver Weekly Charts

The long only funds were promoting their end of year stock results today on very light volumes. Miners and metals are such a slight holding amongst them that they are easily ignored in favor of a paper-only policy.

The market sat on the price of gold and silver all day throughout the paper rally to keep a lid on them. It could be getting easier in the short term as individual investors shun

SP 500 and NDX Futures Daily Charts

Like watching paint dry on a virtual house in Farmville.

The only real excitement was an announcement that SP had cut Goldman's debt rating from their web site that took the stock down. That was a disavowed a few hours later and the stock rebounded.

The NDX is lagging from the SP which has been leading the rally higher. This sort of 'broad rally' is often driven by the buying of the SP

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Ann Barnhardt Discusses MF Global with Peter Schiff - "There Is No Rule of Law Anymore"

There are some interesting facts brought out in this discussion. I do not necessarily agree with everything she says, and she is obviously outraged.

I do not believe in capital punishment except for the most extreme crimes against humanity, and I also think that boycotts and reforms must be targeted to be effective.

Peter Schiff is promoting his agenda, and this leads to a rather comical

Gold Daily and Silver Weekly Charts - 2012: The Year of Living Dangerously

There is nothing 'modern' at all in Modern Monetary Theory. It is the same old fish wrapped in slightly different paper. The godfathers of Modern Monetary Theory are John Law, G.F. Knapp, J.M. Keynes, and most lately Alan Greenspan.  But its roots go back to any ruling group that ever debased a currency or seized private property by fraud.

It is in the nature of a Ponzi scheme. As long as its

SP 500 and NDX Futures Daily Charts - Light Volume, Phony Action

Richard Russell says what is on my mind quite well.

The outlier is the Fed, and a willingness to print to nominal results without regard to the value at risk of the currency.

“I talked with my good friend, Joe Granville, over the weekend, and Joe is as bearish as I’ve ever seen or heard him, based on his OBV volume figures. This checks with my own work and studies.

While fundamentalists

JP Morgan's 'Suspicious Involvement' in the Collapse of MF Global

James Koutoulas on JP Morgan's involvement in the MF Global collapse:
"[JP Morgan] wears way too many hats in this situation. Their fingers are all over this. They were a custodian of customer segregated funds, they were a primary lender to MF Global,...they were head of the creditors' committee in bankruptcy court, they're buying customer claims for pennies on the dollar—vulture claims, and it

Guess Where a Big Chunk of MF Global Customer Money Just Turned Up? At JPM London

Let's see.  MF transferred $200 million to their clearing bank JP Morgan in London three days before their bankruptcy according to the WSJ.  Dealbook says it was on the LAST business day.   And it took the regulators THIS long to find it?

And allegedly at the time JPM London suspected that the money might be coming from the customer accounts.  I wonder why that would occur to them?  

Read

Income Inequality in Post-War America

Regarding Occupy Wall Street and voices protesting the widespread fraud and inequity in the US financial system, Home Depot co-founder Bernard Marcus said, "Who gives a crap about some imbeciles? Are you kidding me?”

JPMorgan Chase & Co. CEO Jamie Dimon, whose 2010 income was $23 million, talked about hostility toward bankers. “Sometimes there’s a bad apple, yet we denigrate the whole.”

Gold Daily and Silver Weekly Charts - Big Relief Rally, But No Breakout Yet

Today was what we call a 'technical trade.' The insiders saw an opportunity to make some quick cash by running the market up.

There was no real news underlying the rally, just greed meets opportunity in a light volume market.

As I cautioned yesterday, it is sometimes perilous to short a dull market.

Oracle warned after the bell.

Europe remains a significant risk. The US economy is

SP 500 and NDX Futures Daily Charts - Santa Claus Came on Light Volumes

Utterly fraudulent rally on light volume.

The wiseguys saw an opportunity to run stocks higher in a dull market as I had cautioned they might yesterday.

This may or may not stick depending on whether the news intrudes into their ponzi Christmas scheme.

But it was a rally based on pure fumes and greed, and nothing more.

I used it to square up and sold into it, and am now holding a paired

Net Asset Value of Certain Precious Metal Trusts and Funds

Gold Daily and Silver Weekly Charts - Raid on Silver, Gold's Turn at Resilience

This is a thinly traded market in Europe and the States. And it will get thinner as the week goes on.

The paper metals market is diverging from the physical bullion market.

SP 500 and NDX Futures Daily Charts

The futures have now rolled to the front month of March.

Thin volumes today and they will get thinner as the week progresses.

Keep one eye on Europe. And be careful in 'shorting a dull market.'

They may jam one for Santa.

Trustee to Seize and Liquidate Even the Stored Customer Gold and Silver Bullion From MF Global

The bottom line is that apparently some warehouses and bullion dealers are not a safe place to store your gold and silver, even if you hold a specific warehouse receipt.  In an oligarchy, private ownership is merely a concept, subject to interpretation and confiscation.

Although the details and the individual perpetrators are yet to be disclosed, what is now painfully clear is that the CFTC

Gold Daily and Silver Weekly Charts - A Bounce in Bullion and Miners on Quad Witching

Gold and Silver bounced today, and that is all that we can call it so far.

Key resistance for gold is 1620. The gold chart has been changed to reflect a repeating formation from earlier this year, on a much larger scale.

A special thanks goes out to my friends at ThirdEyeOpenTrades for reminding me about redrawing the distribution cycle to match that of the beginning of the year.   Bob helped

SP 500 and NDX Futures Daily Chart - Zynga Pops 'n Flops on the Quad Witch

Today was a quad witching day and the SP and Russell are also re-balancing after the bell. So much of the volume today is back end loaded.

Zynga popped at 11 and flopped below its IPO price of 10. Not exactly bullish for US equities.

See you Sunday evening.

Gold Daily Chart - Gold Rally and Decline Tracks Chart Formation From First Half of Year

This formation, if activated and valid, would target gold to a much higher level than the previous high.

Let's see how this develops. I will be tracking both this and my normal scenario obviously. Both are bullish but this alternative view promises a wilder ride.

The similarity between the big accumulation-liquidation cycle and the previous cycle from March to July is remarkable in many

Gold Daily and Silver Weekly Charts - A Market of Pros and Schmoes, With Investors Sidelined

Hermes: 'Alas?' This word of regret the mighty Zeus does not understand.

Prometheus: Time in its aging course teaches all.


Aeschylus, Prometheus Bound
I liked the silver action a bit today, and added back some protective stock index hedges to cover a dalliance into the beaten down silver and gold miners, while adding to the existing bullion positions as well.

This market is as phony as a

SP 500 and NDX Futures Daily Charts

UK Public 'the Worst Off' of the developed G7 Countries With 4.5% Negative Interest Rates

Perhaps this is why the western Central Banks are so determined to prevent the price of gold from breaking out, and keep putting out disinformation from within a cloak of secrecy about their inflationary policies and money creation.

Negative real interest rates are very bullish for gold, and highly corrosive to the ordinary savings of those who lack the sophisticated financial instruments to

NY Fed Granted MF Global Primary Dealer Status Despite Concerns and Lack of Due Diligence

So how persistent was Jon Corleone in that private meeting?

Confidence begins with honesty, a sense of fairness, and respect for justice. Not just the letter of the law, but the spirit of the law as well.

"If we desire respect for the law, we must first make the law respectable...Our government teaches the whole people by its example. If the government becomes the lawbreaker, it breeds

CFTC's Sommers: "We Know Where the Customer Money Went"

Ok, Jill, spill.  Don't bogart the 411 and go all Federal Reserve on us.

Where did it go, and when do the customers get it back?

Or do we have to wait until the dirty laundry comes out of the spin cycle?

And how come Bart Chilton says you DON'T know where all the money went?

Oh and if you find that missing money, can you also check and see where the investigation into manipulation in the

Gold Daily and Silver Weekly Charts

The US Dollar continued to benefit today from weakness in the euro.

Gold was hit hard, and silver confirmed the breakdown in a determined bear raid.

Intraday commentary on the metals here.

The long bullion - short stocks paired trade continued to work today. I added some metal positions during the battering. And I took off the short hedges, but I may put them back on depending on how things

SP 500 and NDX Futures Daily Charts

VIX remains elevated, but relatively low in the current range for the kind of rhetoric the financial press was putting out today.

Let's see if the SP will break down further.

Credit Agricole was lowered by Fitch after the bell but the outlook remains 'stable.'

Perhaps Europe will collapse and the SP will roll over. But I am highly suspicious of this low volume trade. Still it is better

The LIBOR-Gold Forwards Pain Index - Gold Lease Rates Plunged - More Than Meets the Eye

This is the reason for the ferocity of this sell off in my judgement, coupled of course with a general liquidation in stocks and other 'risk assets.'  I cannot help but notice that despite the message of panic, the SP futures remain in a fairly well defined trading range that goes back to late October.  The lower bound of its triangle is around 1180.

Maybe things will fall out of bed, and

Net Asset Value of Certain Precious Metal Trusts and Funds

I wonder how the availability of physical bullion is at these prices today.

Gold Daily and Silver Weekly Charts - Gold Breaks But No Silver Confirm - Did Jonny Lie?

Stocks were rallying until the afternoon and the FOMC announcement which withheld the QE Christmas candy.

Stocks went down hard led by the banks. Gold was hit very hard by a bear raid sell off down to 1620, while silver maintained some strength.

The stock market rebounded into the close somewhat as did gold. Silver has not confirmed the breakdown by gold out of its symmetrical triangle.

Why

SP 500 and NDX Futures Daily Charts - Big Intraday Reversal As Benny Whimpers into Year End

There was a big intra-day reversal in stocks as Benny failed to provide any QE Christmas Candy in the FOMC stocking today.

The index fell out of its triangle. The bulls have their work before them to save the day and get the Zynga IPO out the door.

MF Global Cash at JP Morgan 'Presumed Its Own' So It Can Pay the Bankruptcy Trustees

So what is MF Global going to do with that $25 million in cash held in their account at JPM?

Presumably it will be used to pay the Bankruptcy Trustees and lawyers who decided that it belongs to MF Global and not the cheated customers whose accounts have been looted.

JPM apparently cut a deal with the Trustee saying they could have the cash if MFG granted JPM a lien on ALL the company's assets

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

The MF Global Management: I Know Nothing, NOTHING!

Why WERE all these jokers being paid so much?
What did they actually do to earn it? 

They weren't involved with the trades, and they weren't involved with the management of billions of cash, and the customer accounts,  their most sacred trust.

Have a Futures Account on the CME? Sleep well.
Your money is in the hands of those who know

Money Supply Update - Strong Money Growth But Slack Velocity

Although organic growth in the real economy is slack, the Fed has managed to maintain about 10 percent growth rate in M2, and around 8.5 percent in MZM.

As you might expect with money growth this high and real economic activity hovering at recession levels, the velocity of money is at record lows.

This is not yet stagflation, but it is the setup for such a condition to develop. The question

Gold Daily and Silver Weekly Charts - Bear Raids and Perception Management

The lease rates indicate that someone dumped physical gold in a non-profit seeking manner into the gold-paper markets last week. I wonder who that could be. I suspect it helped fuel the bear raid on gold today.

Bloomberg TV was having an all day anti-gold festival, so I will surmise that something gold-friendly is coming up in the next few weeks.

Perverse logic perhaps. But it is what it is

SP 500 and NDX Futures Daily Charts - Real and Unreal, Intel and Zynga

The US markets were moving lower after a warning by Intel on their forecast. As you may recall I had said last week that my tech sector information was that sales were going to be weak. This has nothing to do with a lack of hard drives, which was the excuse presented.

The stock markets are still within their triangles and I would expect them to stay there unless something really happens to

Gold and Silver Lease Rates

Tom McClellan put forward a hypothesis today on Bloomberg TV that the spread between gold lease rates and LIBOR has been extraordinarily wide, and therefore it has been difficult to short gold. This sustained gold at an unusually high price. But now it is correcting so gold will fall much more in price as the shorts pile in.

I cannot speak to LIBOR, but the gold lease rates have hardly been

Gold's 150 Day Moving Average

This is a delivery month for gold and silver.

The Fed will be giving its last rate decision for the year tomorrow.

This is one of the more active weeks for stock IPOs of the year.

I came into today heavy on the stock short side and lighter on gold. I have lately taken about half those shorts off and picked up more bullion near 1660.

Let's see which way the stock and precious metal triangles

Net Asset Value Premiums of Certain Precious Metal Funds and Trusts

The European Union Is No Different Than Russia and China?

I was astonished, when I started to read what promised to be an interesting piece about the Fed swap lines, that Chris Whalen thinks that with regard to political and economic freedom there is no distinction to be made among Europe, Russia and China. Perhaps he is writing from the perspective of the banks, who are quite unhappy with some proposed European restraints.

"Many readers of The IRA

The Big Question: Are Funds At US Financial Firms Safe?

The short answer is 'maybe.' It is more of a buyer beware situation than most had thought, and still think.

It is nice to see someone in the mainstream media addressing this situation intelligently and without making an apology for what is apparently a criminal act and surely an egregious abuse of the public trust.

It is an axiom that it is not the initial crime that does the greatest and

Gold Daily and Silver Weekly Charts - Divvying Up the MF Gold and Silver

Do you think you own that gold you have in storage?

Maybe, maybe not.

This is nothing compared to what will happen in the event of a major default.

Bloomberg
HSBC Sues MF Global Brokerage Over 20 Bars of Gold, Silver on Deposit
By Linda Sandler and Tiffany Kary
Dec 9, 2011 3:24 PM ET

HSBC Holdings Plc (HSBA) sued the MF Global Inc. brokerage trustee to establish whether he or another

SP 500 and NDX Futures Daily Charts

This felt like a 'drift higher' day more than anything else.

The VIX fell.

Watch for a possible SP downgrade of Eurozone debt next week.

MF Global: The Issue Is Fraud and the Attempt to Cover Up a Wider Circle of Involvement

Janet Tavakoli does her usual great job of cutting to the heart of the matter. Below is an excerpt of her Huffington Post piece on MF Global today.

I keep thinking that nothing will shock me anymore in this US financial fraud fest. But the coverup of the MF Global stealing of customer money in a cloud of legal doubletalk, supposedly the one pristine and untouchable principle on Wall Street, is

Not a Clue: What Happened to the MF Global Customers' $1.2 Billion?

Jon Corzine said today that he does not know what happened to the missing $1.2 billion in customers' money.

If the CEO does not know, and if the regulators do not yet know, how can we possibly know?

But it's fun to take a guess. Here is mine.





The Truth is out there.

Gold Daily and Silver Weekly Charts

Gold is cheap relative to the idea that you could have a life’s fortune on a statement from a clearing agent and then find out that you don’t have a penny left anywhere. Which should you have had, physical gold or that clearing house statement? Gold is cheap because of the condition of other things.

Jim Sinclair
There was a very obvious drop in gold today. It was coincident with a decline in

SP 500 and NDX Futures Daily Charts - Ugly Selloff Into the Close

The US equity long only fund managers would dearly like to rally this market to ensure their year end bonuses.

And once again they made a play to take the markets off their lows this afternoon, until another report (rumour) swept the market that Germany would not back any new treaty proposal tomorrow.

And so the markets sold off and went out very near their lows.

Texas Instruments lowered

CFTC Issues A Clear Statement: MF Global Customers Have Priority In This Bankruptcy

"A good parson once said that where mystery begins, religion ends. Cannot I say, as truly at least,
of human laws, that where mystery begins, justice ends?"

Edmund Burke
Jill Sommers, the CFTC Commissioner who is leading the investigation into the MF Global bankruptcy gave some important testimony to the House today that has been overshadowed by the expected appearance of Jon Corzine.

If

Corzine To Take the 'CEO Defense' - The Re-Hypothecation Scheme - Customers Have Priority

"I will be as harsh as truth, and as uncompromising as justice. On this subject, I do not wish to think, or speak, or write, with moderation. Tell a man whose house is on fire, to give a moderate alarm; tell him to moderately rescue his wife from the hand of the ravisher; tell the mother to gradually extricate her babe from the fire into which it has fallen; but urge me not to use moderation in

Gold Daily and Silver Weekly Charts - Flight to Safety Lifts Gold

Just about everything is coiling for a move.

SP 500 and NDX Futures Daily Charts

A light volume, headline-driven market.

There is a lot of desire on the Street to rally stocks into the year end.

Europe is a stumbling block.

What Is the Primary Trend In Gold?

The market maven Richard Russell often speaks about 'the primary trend' in certain assets and markets.

I speak of it as the fundamentals, and also the primary trend.

Someone asked, "What is the primary trend in gold?"

Here is the big picture chart with the trend marked in green.




The primary trend in gold is being driven by two major fundamentals:
1. The Central Banks were net sellers of

Gold Daily and Silver Weekly Charts - Another Bear Raid Down to Support That Fails

There are a lot of 'fingerprints' on the tape these days.

The bear raid in bullion diverged significantly from the miners this morning, as the wiseguys were playing the old fake 'em and take 'em on the public.

Intraday commentary on that topic here.

What next? The markets are looking for a BIG move on Friday based on European headlines. They may not get it, whatever it turns out to be, but

SP 500 and NDX Futures Daily Charts - Pop and Flop

Another wide ranging day that accomplished very little, and on light volumes.

The option purchasing is showing a lot of convexity. People are looking for a big move on Friday tied to the European summit meeting. They just don't agree on which way it will move.

The Gold Bull Market Back to the Cup and Handle in 2010

I am probably going to truncate the existing daily gold chart again because it is becoming a bit unwieldy. As you know I reduce its scope occasionally to facilitate showing it on the cafe blog.

But for those who asked for it, here is a copy of the 'big picture chart' showing the original breakout formation of the cup and handle going back to 2010.

You may not be able to view it here, but

Intraday: Today's Gold/Silver Cross Trade Between Bullion and Miners Seemed Particularly Blatant

Here is a message to some trading friends this morning with gold around support at 1710.

They normally hit the miners hard before a smackdown in gold and silver. They did this on Friday. But today we saw the opposite happening, at least this morning. Earlier I had sent out a message saying, 'I think the bottom is in.'

Denver Dave and I had come to the same conclusion after some email

Categorizing Those Unemployed by the Recession Caused by the Financial Crisis

Words like 'shameful' and 'national disgrace' do come to mind.

Rutgers University Working Paper
Categorizing the Unemployed by the Impact of the Recession
By Dr. Cliff Zukin, Dr. Carl E. Van Horn, and Charley Stone

In August 2009, the John J. Heldrich Center for Workforce Development at Rutgers, The State University of New Jersey began following a nationally representative sample of American

Gold Daily and Silver Weekly Charts - Light Volumes and Frivolous Day Trader Markets

“The world is short water, energy, & commodities. We’ve under-invested in our natural resources as a society and as a consequence, we’ll see higher prices around the globe.”

Mark Cutifani, CEO, AngloGold-Ashanti
Gold was hit early on, and silver shortly followed, despite the rally in stocks and the falling dollar.

This struck me as price manipulation tied to the settlement negotiations that

SP 500 and NDX Futures Daily Charts - Light Volumes and Rumours

The stock markets rallied early on with the news that a deal had been struck between German and France.

The volumes were very light and lacked conviction with little follow through even as the SP 500 seemed to break out of its triangle formation.

In the afternoon another headline swept the markets, that Standard & Poors would be placing the entire Euro zone on ratings watch depending on what

Net Asset Value of Certain Precious Metal Trusts and Funds

The Difference Between Eurodollars and M3 Eurodollars

My friend Bart at Nowandfutures.com and I have discovered the cause of the discrepancy between his, and presumably John Williams' estimate of Eurodollars for their M3 estimates, and the BIS reports of Eurodollars.

The Fed's estimate seems to be limited to foreign branches of US banks only.

The Board of Governors of the Federal Reserve discontinued the Weekly Report of Eurodollar Liabilities

Gold and US Official Debt Instruments Held by Central Banks

If the Eurodollars chart wasn't enough heartburn for the paper-huggers, here is a chart from Ed Yardeni showing the correlation between the price of gold and the amount of US Treasury and Agency Debt held by Central Banks.

Personally I like to track the Eurodollars and the real interest rates, but this works about the same as I had suggested.   Central banks are not profit-seeking

Gold, Eurodollars, and the Black Swan That Will Devour the US Futures and Derivatives Markets

The Eurodollars estimate in the chart below is based on the BIS Banking Statistics from Commercial Banks and may not include official reserves held by Central Banks. 

As you know the Federal Reserve stopped reporting Eurodollars some years ago, with the consequence that it also stopped reporting M3 money supply.

I like to think of Eurodollars and banking system derivatives as the Fed's

Gold Daily and Silver Weekly Charts

Gold and silver popped with stocks today, but gave up most of their gains into the close.

I think this is a period when they pause, and will tend to follow stocks at least for the short term as the markets move up and down with rumours and headlines.

The fundamental trend is still very much intact. And the recent Fed activity in providing more dollars to Europe will at some point trigger a

SP 500 and NDX Futures Daily Charts - Second Flop, One More Try At Most

This is the second day in a row that the SP 500 has 'popped and flopped' in a failure to advance its admirable weekly gain on the back of the Central Bank initiative to make more dollars available globally.

The big drop in the headline unemployment percentage was totally misleading.  And we took some shorts near the apex of that pump and dump,  flipping them into the close. 

So what next?

Euro Dollars - The Great Dollar Overhang and Missing M3 Component - Gold and Silver

These figures are from the Preliminary BIS Reports of November 2011 which reflect reporting bank positions as of the Jun 2011 quarter. Obviously therefore they do not yet reflect the recent Fed expansion of the swap lines for dollars.  The first chart represents the total dollars held by banks as 'foreign currency.'

As you will recall, a 'euro dollar' is any US dollar being held overseas, in

Gold Daily and Silver Weekly Charts - The Pause That Refreshes?

I changed the weighting of the long gold - short stocks pair back to 'neutral' to slightly short.

There might be some tax loss selling in early December and headline risk remains highly elevated.

Still it is wise not to underestimate the Fed's willingness to debase the currency for their friends.

As a reminder, the Non-Farm Payrolls Report is tomorrow.

I still think the Europeans should

SP 500 and NDX Futures Daily Charts - Wall Street Talking Up a 'Santa Claus Rally'

The SP 500 has managed to work its way back into the symmetrical triangle from which it had broken down, with a lot of help from Bernanke and the western Central Banks.

Let's see if they can hold it here, and even break out. Headline risk remains elevated, and nothing has really changed except for a short term blast of dollar liquidity.

As a reminder, tomorrow is the Non-Farm Payrolls Report

The Y-T-D Performance of Various Assets: Gold, Silver, US Stocks, Bonds, and AAPL





Doing Nothing Is Still Making a Choice
And the winner is gold, at least for now with one month left in the year.

I included AAPL because it is the poster child for the stock rally and is often touted by shills for Wall Street and the hedge funds as a superior investment amongst stocks on chat boards and 'news programs.'

It should be noted that recently the US 30 Year Bond has