Monday, 25 August a.d. 2014 Browse the commentary archive Some things are so bodaciously stupid that you hardly know where to begin unraveling them, because the stupid sticks out all over. Today theres reports the European Criminal Bank -- whoops, Central bank -- will engage in new stimulus measures, read: inflate more. In a statement that for utterly pure stupidity could hardly be beaten, ABC News reported that Draghi warned that low inflation -- a sign of economic weakness -- could be getting worse. But inflation doesnt result from any act by the economy weak or strong, it can only be done by a central bank, because it is creating new money. But the point of this moronism is the lame idea that somehow new inflationary money can stimulate the economy. In fact, it can only cripple the economy, because it makes money artificially cheap which fools entrepreneurs into investing in unprofitable ventures -- in short, wasting capital. So the result of inflation is not only picking the pockets of all savers, but also misdirecting capital so that a temporary economic crisis can become chronic. Heres proof: the US Federal Reserve has been stimulating the US economy since 2008, and the economic recovery remains one with the Yeti and Bigfoot. Never mind, they keep on doing it anyway, because if they ever stop printing money, their whole system will collapse. Stocks today continued rising higher into irrationality. S&P500 hit 2000 but closed below at 1,997.92, up 9.52 or 0.48%. That was a new high for the S&P500, but not the Dow. It rose 75.65 (0.44%) to 17,076.87. Last high was 17,138.20 on 16 July. It has become pointless to drag out measures of overvaluation for you. In the end reality will take its vengeance. Dow in silver rose 0.66% to 882.16 oz (S$1,140.57 silver dollars), still heading for a double top with Junes high at 892.99 oz (S$1,154.57). Dow in gold rose 0.67% to 13.35 oz (G$275.97 gold dollars). Same show playing here, toward the June high at 13.53 oz (G$279.69). US Dollar Index rose 19 basis points to 82.58, pushing close to my top target at 82.75. This might mark a top that would last a while, which would help gold. Yen today at 96.14 (down 0.1%) has reached the bottom of a 15 month trading range. Must turn up here or dive. Euro lost 0.38% to $1.3194. Euro is greatly oversold, so may show a corrective reversal soon. In the teeth of news about as bad as it could get, a surging dollar, and a break of $1,280 support last week, gold held its ground. Oh, it lost a meager $1.30 (0.1%) to close Comex at 1,277.30. Spot silver also held firm, losing 2.8 cents (0.14%) to 1935.8c. Gold sits just barely above the uptrend line from the December 2013 bottom, and the long term uptrend line on the monthly chart. Im betting gold will hold here. If so, this will prove the buying opportunity of 2014. Silver continues to slide down that downtrend line from the 2013 high. For both metals, I have to ask, Why havent they broken down? Short answer is that buyers are waiting for these low prices. Another part of the answer is lack of interest. Silvers range today was 1930c to 1947c, golds $1,281.6 to $1,276.10. Only thing that could cancel a rosy outlook for silver & gold is a sudden drop through these levels. On 25 August a.d. 325 the Council of Nicaea ended by adopting the Nicene Creed which affirmed the doctrine of the Holy Trinity and rejecting Arianism. On 25 August 1718 hundreds of French colonists arrived in Louisiana, and some settled in what is now New Orleans. It was above sea level back then. Argentum et aurum comparanda sunt — Silver and gold must be bought. — Franklin Sanders, The Moneychanger
Posted on: Tue, 26 Aug 2014 05:56:49 +0000
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