Nearly there?

Hello everyone.

2015 draws to a close, so I thought I'd try to emulate GM Jenkins with a few charts for you. I have found a whizzo new (free) charting site recently, which has enabled me to mess around with some very long term charts.

I'll kick off with a recreation of one of GM's that I know has interested a few of our readers, the ratio of the US 10 year treasury yield and silver, and how this signposts big turning points in the price of gold:

Not long now?

As we can see, the upper trend-line was touched and pierced back in the early summer, and more recently the ratio has moved even further outside of the trend-line. This is not unprecedented, as we saw a similar episode at the bottom of the channel from mid-2011 through to the end of 2013, when gold had its last bubble phase. Whilst the channel doesn't provide a precise timing for turns up or down in the gold price, it does appear to help identify the process of topping and bottoming for the gold price. My feeling is that the gold price has one final plunge ahead very shortly, before the trend reverses for a number of years.

This next two charts show where the gold price might find its support in the next 3-6 months:

Andrews Pitchfork starting in 1999

Here is the same pitchfork extended to a recent date:

These lines will intersect the gold price sooner or later, and there is also strong lateral support in the $950 to $1,000 range

Here's another interesting pitchfork chart from way back in the 70s, which proved to be relevant again more recently:

Down to the bottom then back to the top again?

Everything seems to line up with a move down for gold to around $950 within the next 6 months or so, and I'd guess it will be a sharp move down rather than a drift lower, a classic capitulative finale to a bear market, with weak-handed holders selling in volume. It would then be followed by a relatively swift rebound and the start of a good few years of a strong bull market.

This would coincide with a global recession and the broad markets entering a deep bear market. Here's a quick look at the crash of 1987:

Upper and lower trend-lines from the crash of 1987

Here's the Dow Jones again with those same trend-lines extended to today's prices:

Bubble, what bubble?

Interesting how those trend-lines seem to come into play decades later isn't it?

We appear to be heading to an imminent major turning point for many asset classes based on these charts.

Good luck.

Fibonacci to markets: sorry, your time is up.

This is it folks, the end of the rally, today is the peak.

Here's why, just a couple of charts, the first one key, the second just to show how weak other markets are.

Complacency abounds, the bulls appear to believe clear blue skies lie ahead, when all I see are storms.

Good luck.

Checkpoint 1 : Armstrongs 2015.75

Recently we discussed magnitude of expected financial events and in our 20-year poll, one of the options for date prediction for a WTFUC event was that of Martin Armstrong's 2015.75. Now that date (September) has come and gone I wanted to take a quick snapshot of the results and make a few comments.

Any of the 34 respondents who voted for this option were ... wrong. And I say this not to be narky - in fact I'm very glad last months events did not pan out the way I described in my WTFUC definition. The entire point of the original article (and the 20-year poll) was to help bring discussion to the mental models we carry around with us i.e. an examination of our expectations and time-frames for all things financial. Depending on the settings on your computer the poll will allow you to change your vote.

Regarding the date expressed in Armstrong's economic confidence model (ECM), I'm not entirely sure what to make of it (or his renewed focus on Real Estate for that matter), I always thought the ECM was referring to confidence in government/public sector. I get the impression the turning point will be the focus of quite a good many follow-up articles in the years to come with the benefit of hindsight. In fairness it is not realistic to expect certain events on a very specific slice of time, but this gets us back to the discussion on time frames and relativity. My overall point is that predictions are useless without tests and context for those models. I cringe every time I read a call for COMEX DEFAULT, DERIVATIVES COLLAPSE or Bullion Bank IMPLOSION. The big problem is none of these events have transpired on the purported time frame and that should be a red flag for any continued predictions from the same folk. From a book recently read - I love this paragraph because the author could easily be talking about most precious metals blogs.

"... This desire for complete seamless explanation infests most examples of crank science. When somebody mails me their explanation of the architecture of the Universe derived from the geometry of the Great Pyramid, or the cipher of the Kabbalah, it will usually display a number of features: it will be entirely a work of explanation; there will be no predictions, no tests of its correctness; and nothing lies beyond its encompass. It is not the beginning of any research programme. Beyond refutation, it is always the last word."

The world is an incredibly complex place and it is beneath us to describe it in simple terms. Together, let's keep searching for the right model of gold and international finance. But let's judge and discard models which don't give specific predictions and which fail to explain the significance of the events in the context of their readership.

Next checkpoint is at the end of 2019, let's see what happens over the next 3 years. --Warren

The Sun and the Moon

Hello everyone.

We were long overdue a new post, so here's something a little different.

I'm sure everyone who visits this blog is interested in expanding their knowledge.

I wanted to quickly share something that I have discovered recently that appears to represent a major piece of the jigsaw in terms of understanding human behaviour and major climate cycles over the ages.

It would appear that all activity on our planet is affected by solar activity, lunar positioning, and also the movements of other planets in our solar system. Gravity and magnetic activity are both involved. Major periods of change for humanity have coincided with peaks and troughs in solar activity, as well as other impacts on a more regular basis. It is a fascinating subject. Everyone is affected by the sun, including your friendly central bankers and politicians. As we head into a major solar minimum in c. 2020, expect to see speculative behaviour wither away, with significant impact on business activity and the markets. It's already evident of course, as the latest bubbles begin to burst (Any biotech dip-buyers around yet)?

I don't have the time to explain the details here, so I am simply going to provide a few links to sites that I now follow regularly, and hope you find them interesting.

John Hampson writes regularly on the impact of solar cycles on markets and demographics.

Ben Davidson covers daily solar and climate activity, and their impact here on earth.

This site has a variery of information on solar and lunar matters, as well as other areas I have not looked at.

That's all folks, enjoy your weekend.

The Nexus

It’s time to delve into the murky waters of the nexus between money, central banks, governments, banks, and humankind. Most of my thoughts are focused on the present and the future, rather than the past, so that means there will be a certain amount of informed speculation. It’s much more interesting to look forward and consider where we are going (using current/recent events as a guide) rather than be constantly looking backwards for a guide to the future. Everything is subject to change at all times, so it’s best not to have a fixed view, but to treat matters on the balance of probabilities having considered all available evidence. So, some readers may need to cast aside any existing biases and prejudices they may have around this rather meaty subject, as the future is likely to make those biases irrelevant.

Where to begin? I’ll start by stating that I have seen plenty of evidence that money is and always has been debt, and that it simply evolved that way. The best anthropological evidence of this evolution is contained in the early sections of David Graeber’s book ‘Debt: the First 5,000 Years’.

The Big Picture

One of the biggest challenges I have confronted in trying to discuss money is the difficulty many people have in thinking of money as a type of debt. On a personal level we use money in ways that can make this concept very counter-intuitive. We use currency to settle debts and make purchases. We get paid in money. There’s no obvious creditor and debtor relationship with money as there is with the contract for a housing loan or a car loan.

When a person has paid for something with money I don’t think it’s easy for them to reconceptualise that transaction as actually being an assignment of a debt. Yet, on a system level we can clearly show that money is a type of debt. We can identify the sources of the stock of money and point to their balance sheets where the liabilities (debts) reside that correspond to the total stock of money in the economy.  (Incidentally we can, as Jacques Rueff does in “Balance Of Payments”, also apply these insights to the international monetary, financial and trade system.)

My interim solution to this problem is to apply two different approaches to defining money. I think we need to use multiple functional definitions of money to describe people’s personal relationship with it as a way to try to establish some common ground. But we cannot discuss money from a monetary system perspective without agreeing that it is a type of debt regardless of where that system lies on the spectrum between ‘realist’ and ‘nominalist’. We need a “systems thinking” approach to get the big picture perspective.

The Nominalists And The Realists

Have you ever had a “light bulb” moment? A moment when a huge amount of information just falls into place like the pieces of a puzzle spontaneously rearranging themselves into a clearly recognizable image? Here’s a passage that did that for me a couple of days ago:   

The two extreme types of monetary systems are: the 'realist' under which each unit of money has, as a counter-part in the balance-sheet of the bank that has issued it, an asset that can be sold on the market for an equal value; and the ‘nominalist’ under which money is nothing but a token, void of substance. All the systems that have been, are, or will be in force range somewhere between these two models. (my emphasis)

$1,081 gold bottom?

We've recently been updated by GM Jenkins on the 10 year USTs priced in silver chart, notably the ratio hitting its upper channel line at around the 1.50 level. GM is expecting a final lower low for gold shortly, before the trend changes back to a bull market.

I decided to see if the gold price was Fibonacci-friendly, and the chart below plots the key retracement levels from the bottom back in 1999 through to its peak in late 2011.

Here's the chart (I manually added the 23.6% level at $1,522):

Who knows what will happen, but the fib levels seem significant, so I'll be saving my pennies to buy the bottom at around $1,081, and I reckon it's coming within the next 5 weeks, in the midst of a liquidity crisis as stock markets take a dive.

I'm not expecting the 61.8% fib level to be hit.

Don't believe the hype

Hello everyone.

Just a very quick post on the collapse in the Chinese stock market, and how it's being (mis)reported by mainstream media in China and in the West.

I'll assume all readers know that the Chinese stock market bubble has burst, and that the bursting is ongoing, with many stocks limit down today.

Reports in the media have all been saying the same things, which can be summarised as follows:

1. The Chinese government are doing all they can to stop the collapse.

2.The People's Bank of China is supporting the market, buying shares, helping brokers, and will do anything to keep it all propped up.

3. Interest rates are being slashed again to try to keep the bubble afloat.

4. Eventually, the Chinese will socialise the stock market and maybe the housing market.

The (beginning of the) End

 Greetings friends!



We’re not yet at the end of the great bear market in gold (2011-2015), but I can confidently say it’s the beginning of the end.

[update 6/9] To clarify, based on a question in the comments, re: my statement to "expect a new low soon." Note that although the chart pattern suggests the next up leg in gold should begin when the $TNX/silver ratio hits the green line, in the past these points have been accompanied by a new low in gold first. So my best guess is that a new low is coming soon, while interest rates may also fall to keep the ratio near where it is.

[*update 6/15] Ratio is indeed still at 1.50 at the close of this week, with gold approaching a new low. One thing I should've made more clear is that the pertinent lows on this chart are for weekly closing prices, so a new low would be < $1158, which was the closing price the first week of March of this year. (It was also the lowest closing price in gold in 5 years, going all the way back to April 2010!) ...Working on some cool charts but no time yet to post.

Let it be widely known that I first called this 2 years ago. It actually surprised even me how relevant that post remains. 

However, I regret to say, a video I had posted at the top, the content of which I have only the vaguest recollection, but the titillation derived whereof I distinctly recall, has vanished…

Well, this one should be timeless. 

Note: Below the fold a chart that illustrates the trend in nominal interest rates since 1980, i refer to it in the comments

Quick Analysis on Sticky Gold (chart)

A very quick chart for Gold price (in USD/oz) to demonstrate the gold doldrums. For those who debate Gold's proper value : the market says it is fairly priced at around $1,200/oz. The graph below shows the sample of the mid-point price points for this year, expressed as a percentage of all price samples. The underlying data is for XAU_USD currency pair, from Oanda's trading platform, analysis of all M1 intervals available for calendar year 2015 to date.

$30 range around $1200/oz is highlighted in yellow.
Data points are for Jan - May 2015, from Oanda.

Worldwide Turmoil, Financial Upheaval and Cataclysm

When the Global Financial Crisis (GFC) of 2008 occurred, many including myself were shocked enough to start doing further investigation into the nuts and bolts of our modern financial system. My at-the-time-research led me to be long gold and short sydney property - in 2011. Here we are in 2015 and the result of that is pretty (painfully) clear to me. It's not just my timeframes which were screwy, it became obvious that most of the narrative I had collected was incorrect. Recently I've been exploring this dichotomy, but today I want to bring some definition to something that comes up in a lot of discussion - the idea that the GFC was simply just a dress researsal for something much bigger.

Giving this supposed event a name allows us to study it better, so I'm proposing the term 'Worldwide Turmoil, Financial Upheaval and Cataclysm' or WTFUC for short. We have a new poll running at the right hand side of the page here - I encourage you to vote in it because it's kind of unique - the poll will run for 20 years finishing in 2035 and (fingers crossed) I hope to be around to write a synopsis on the final results. If the blogger platform remains constant then you should always be able to change your vote over time, although it won't let me change the options. The poll allows you to nominate your expected timing for the WTFUC and the hope is that this helps us discuss our beliefs and expectations in a practical fashion (even as they may change over time).

Correlation does not always mean....correlation.

Just a quick post.

I read a lot of stuff, mostly financial, and I'm always interested in others' views. However, I read everything with a critical mindset, especially when there's a paid service being touted. Nevertheless, sometimes 'free' content can highlight some interesting facts about the 'expert' analysis.

I just read this post and noticed something that I decided to share, merely because it is so obvious, it made me smile.

There's a chart within the post which shows the KBW Bank Index plotted against the gold price over the last couple of years. The writer makes the point that the two have been negatively correlated for a long while, and has placed some arrows on the two charts to illustrate this point, with green up arrows on the bank index, and red down arrows on the gold chart. Very easy to follow for the simple souls that might be seeking 'expert' views. (Disclaimer: I am colour blind, but the arrows do look red/green to me).

Trouble is, the arrows don't align at all! Ok, well to be fair, one pair of arrows does align, but two pairs don't align at all, in fact they show that the two charts are positively correlated on those two occasions. Weird eh? Here's the chart with my vertical lines added:

What's most interesting about this little slip up is that the writer often criticises sloppy analysis elsewhere, but isn't immune to it himself. No one is perfect of course (perhaps his ruler slipped), but some are more sanctimonious than others.

Good luck.

Sunday PM pre-game, 5/17/2015

 Greetings, friends!

There's been a rally in gold and silver since last we spoke, and my educated guess is that it has provoked and inspired a lot of chatter on the net that the tide has turned, gold is finally headed to $2000, etc.

Now, regarding the online chatter from the usual suspects, that's only a guess, since I haven't been online recently. Truth be told, I don't have a computer. Can't afford one. I'm currently at the public library next to the Beckley, West Virginia Hooters. (Speaking of which, I love hearing the laughter of children, but not when I'm eating French fries at Hooters. I might have to start looking elsewhere to dine.)

Anyway, the next long term bull cycle in the PM market is not here yet, but I'm seeing this August as a legitimate candidate for a final bottom. You heard it here first. But since that's still months away, here are some charts to keep you guys busy. I'm gonna get right to it here, as my hour at the public library is just about up.

The situation in gold hasn't changed since my last post. Outlook bearish until $1250 can be cleared. But there are so many different lines and curves of resistance there, I don't see it happening. For example, here's a chart I haven't pulled out in a while: the 89-week (Fib) moving average (green), the breaking of which augured the April 2013 crash

Here's a similar chart to the one from my last post. Like the 2-year MA, the 21-month (Fib) MA is right at $1250 too ...

 


The "yields in silver" chart is snaking towards the wedge....

Note GDXJ has popped out of its 3-sigma bollinger band for the first time since its inception. We see that a lot - fairly obvious short covering rally. Yet- it's barely gone up 5%

Reinventing the Democratic Process in Australia

Recently in Australia, the Labor party joined hands with the Liberals to pass a bill on Data Retention, showing the primary distinctions between the two duopolist parties: i.e. no difference at all. With this incident, the political term 'opposition' gets relegated to 'sad joke' status and squarely demonstrates Australia's tepid leadership. While our bureaucratic overlords seem to think this is a great game, I pondered whether the bill would have had any support from the general public; in PROTEST I have designed an overhaul of the entire Australian electoral system, which I present for review. Those of you who are advanced in Political Science can set me straight on which elements are impractical, but please consider every part in total first:

Goals:

• - Take advantage of modern technological advancements (but is not in itself E-Democracy), to generally increase the security, quality and speed of electoral results.
• - Maximize the satisfaction levels of all participants (individuals or collectives), with the view this enables efficiency and empowerment.
• - Reduce waste by limiting size and power of government.
• - Bring more transparency to positions of influence in the voting process.
• - Use free market mechanisms to reward honesty and punish bad political behaviour.
• - Produce the most accurate map of the wishes of the voting public.

Constraints:

• - Zero political-will to change the current system.
• - One hundred years of bloated, bureaucratic legacy.
• - Weak leadership with vested interests.

Sadly, both the goals and constraints are simultaneously the reasons why change will never be put into place - even as I write this article, the current government are proposing new laws to limit the influence of micro-parties. My ideas first got rolling when I was reading about the recent iVoting in the NSW election, where a team of independent researchers found a flaw in the voting website. I considered penning an article on that alone from my tech background (suffice to say security is purely a question of quality), but was more interested in the surrounding discussion where someone highlighted the conundrum: 'with internet-voting it is impossible to design a system which ensures the person voting cannot sell their vote'. So I started a thought experiment 'if selling your vote were allowed, would that help things and what would change?' It led to an interesting design, here are the primary elements of my proposal:

Martin Armstrong's Tense

Hello again.

I read Martin Armstrong's blog every day. Much as I grimace at his spelling and grammar standards, I do enjoy his insights and his passion about the world's troubles and what lies ahead. I recognise that he's running a business, and has some 'product' to sell, so a pinch of salt is sometimes required, but in my view he's forgotten more about the markets, the world and its history, and cycles, than most of us will ever know, and that includes all of the so-called experts and amateurs that write at length online these days.

So, I was interested in a paragraph he wrote very recently regarding one of my favourite assets: gold.

Here's the paragraph to which I refer:

Gold has been turning back down as it has lost much of its luster among broader base investors. In fact, there are people now starting to say gold is dead since it has declined in the face of monetization by the Fed and the ECB. The wider view is the gold rally was all hype and it will never rally. This too is what I warned MUST take place BEFORE you get the low. We had to “shake the tree” and get them all out.

Mr Armstrong has been vociferous in recent years in his criticisms of the 'gold promoters' out there, who fail to appreciate how the gold price moves in line with short and longer-term cycles. He produced a timing report on the precious metals last year (I think) and sold this to anyone interested, and it contained his system's key turning points for prices, and he made it clear that lower prices were ahead for much of the past few years. A good call for sure. More recently he has appeared to soften his tone towards gold somewhat.

I happened to notice one key word in the section I have copied above:

'This too is what I warned MUST take place BEFORE you get the low. We had to “shake the tree” and get them all out.'

Unusually, he has switched from using the present or future tense to using the past tense in relation to ridding the market of the short-term bull players and allowing a bottom in price to form (now do you see what a great play on words this blog title is?).

So, I wonder, is the gold price past its lows? Are we in a new stealth bull market already, but no one has noticed? Time will tell, but like many of you reading this who have bought more gold recently, I reckon the past 2 years will turn out to have been one of the great buying opportunities we shall ever see for any asset class during our lifetimes.

If the long-term interest rate and inflation cycles turn in due course (next year or two, after a deflationary scare), then another gold-related asset (its miners) could also be set for a spectacular 20 years or so. Have a look at this long-term Barron's Gold Mining Index chart, which I have split into (fairly rough) sections. Sadly the BGMI chart doesn't go back quite as far as I would like, so we have to make do with what we have, but it would seem that for the period following the Great Depression, right through until inflation/recessions started to appear in the mid 1960s, the gold miners did very little. Then from 1965 until 1982, the miners had a huge run, along with gold, both up by around 2400%.

It seems inevitable to me that the 32 year interest rate cycle will turn within a couple of years, and we'll be back in a period much like the 1970s, with rolling currency crises, very little real growth, and a lack of faith in central banks or governments to do much about it (at last). So, interest rates will rise, asset prices will rise as money seeks something real as a hedge, and as we saw in the 70s, gold and its miners could be the best investment to hold for the long run. If gold rises to c. $2,500 through the end of the current cycle, and then does another 2400% run in the following 16-18 years, you'd be looking at a gold price of $60,000 an ounce. And of course a very similar rise in the share price of its miners, just like in the 65-82 period. Then, in 2034, it would perhaps be time to move away from gold? Ah, who cares, I'll be an old man by then, we'll review it all again nearer the time.

In closing, I had an interesting chat last year whilst on holiday with a geologist who works for a multi-billion dollar family office (brewing wealth), and they'd just completed on a tiny £100 million deal to buy a gold mine in Africa (I forget the country). I asked her what would be the likely situation with the mine if the gold price were to experience a sustained and significant price increase over a number of years, were they worried about the local government repossessing the mine? She explained that these days most mining deals have a profit-sharing clause to take care of that, so everyone gains on the upside, but the capital risk is solely with the investor if prices fall. The deal, interestingly, was part-funded by Kuwaiti investors.

Good luck.

Edit (24/5/15)

I had an email from Nick Laird (Sharelynx.com) today. He has kindly put together a longer-term version of his BGMI chart shown above. The chart below uses Homestake Mining from 1890 through to 1925 & then Homestake & Dome through to 1938, when it joins the BGMI index until 1945, when it then joins the SP Gold index. Thanks Nick.

Here's the chart:

The chart proved my earlier guess, that after the 1933 dollar devaluation against gold, the miners entered a long period of consolidation, from 1933 through to 1965. But they delivered a quick 1000% gain from around 1925 through to 1933.

It is apparent that the 'gold recapitalisation' period was twice as long in the 60s-70s, with a gain in gold and its miners that was more than twice as large as in the 30s. Does that offer any clues for what lies ahead in the 2020s-2030s? The world's debt bubble hasn't got any smaller has it? We will see in due course.

Why Does The Price of Silver Matter?

Those of us even tangentially interested in silver will no doubt be aware of Ted Butler’s incessant allegations that JP Morgan is the major manipulator of its price on the COMEX future’s market, which it purportedly accomplishes by selling huge amounts of short contracts while simultaneously, but often covertly, accumulating massive amounts of the physical metal in various forms.  In a recently published article on SilverSeek, http://www.silverseek.com/commentary/unavoidable-comparison-14284, he alleges that the bank took on that role at the behest of the US Government back in 2008 when Bear Sterns went under, being rewarded by the tidy profits they routinely make in the futures market and the immense gains they stand to make if/when they unload their silver hoard at significantly higher prices.

Sunday PM pre-game, 4/19/2015

Greetings friends!

Figured I'd post an update since I started building a short position in gold and silver Friday. Simple idea: I will close it if gold crosses the 2-yr moving average on this monthly chart.

It's not easy being an animal

Hello everyone. After several years of reading and commenting here, I’m pleased to have been given the opportunity to provide some posts for your perusal.

I’m going to start by sharing some thoughts on some apparent ironies and paradoxes of evolution on our planet. I’m going to focus specifically on the Darwinian theory of natural selection, also commonly known as ‘survival of the fittest’, and how this may apply to humankind in particular.

We humans are so much further down the evolutionary path than every other species aren’t we? We have amazing technologies, we are self-aware, we have governments to organise things, and we seem to continually be making great strides in improving our living standards, as well as our average life spans, especially in the developed (part of the) world of course. There also seems to be a continuing and growing desire to move towards humankind sharing its resources more, and looking out for those who are in need, especially within national borders.

Some call this socialism, which I believe means being friendly and caring to your fellow humans, and sharing with them (unless they’re very rich or foreign of course), ideally via a government agency, as opposed to getting one’s own hands dirty. The desire to see a fair society and a fair world, where everything is shared via central planning is perhaps not a good fit with the ‘survival of the fittest’ principle. Also, the internet seems to be enabling people from around the world to join together in a way never seen before, sharing information and views. In many ways it is a whole new world these past 20 years.

The Wheels on the Bus go ...

Over lunch last week, the Australian branch of the Screwtape Files team got talking world matters. Big topic: 'How is it that the wheels have not yet fallen off?'. Here we are in 2015 and the horrific financial collapse and devastation predicted by many - take your pick of the massive smorgasboard of potential disaster: Armstrong's Big Bang 2015.75, Australian Property Crash, China Economy Collapse, Revaluation of Physical Gold, Hyperinflation, Global Derivatives failure, Grexit from Eurozone, Kondratieff Winter, Bond Bubble Busting (etc) ... all of these are big ticket items so the fact that none of them have yet come to pass in finality (despite appearing to be constantly on the brink) seems to indicate that Ben Bernanke and his ilk really have worked some magic, albeit arcane and unholy.

Checking in

Hello friends,
As I mentioned in a previous comment, I'm on a brief sabbatical from STFU. But I see our friend Gary requested a chart a while back, so here are six (no financial repression here!).

First, a big picture view of gold.

Looking at 5 wk exponential moving averages in 5 major currencies, we see (1) the 2013 crash was minor in the big picture, but (2), (as I've been saying since then) that marked the end of the bull market of 2001-2011, and consequently, it would take some time before the next up-leg. Regarding which (and I'm in complete agreement with the most rabid gold bugs here) is on its way. Just not yet.

Incidentally, I have to laugh at the establishment types and apologists who think gold has no tie-in to macroeconomic fundamentals anymore. I.e. the blinkered ones who willfully refuse to see the tie-in between the growing debt (and consequent income inequality) since the 1970s and the jettisoning of what was left of the gold standard.

... e.g. note when the wage curves actually flatten, and where the New York Times puts the vertical demarcation here:

If you integrate under (Productivity - Wage),  you get ($$ stolen by Financial Parasites)

As I predicted it would do when I unveiled this chart many months ago, gold hit the MA-rainbow and has turned, just as it has done in previous corrections. Keep your eye on the horizontal green RSI line above.

Australian Data Retention Proposal = Stalin's Wet Dream [updated]

I barely have time to look up these days but when I do it's normal to discover Australian Politicians finding new ways to waste public money on inefficient and unecessary things. The 'data retention' scheme is one such, with the added of bonus of highlighting what an oppressive communist country we have become. It's back in the news because our government has estimated the cost - they want to spend over AUD$400 Million to systematically retain national communications 'metadata'¹ for a period of two years. Exactly which element about the proposal most offends me is difficult to determine ... possibly that whoever has the motive to circumvent the monitoring will definitely have the means to do so, and that for the most part the ability to track all this stuff is already in place and can be obtained should the target be important enough. The cost is apparently an ongoing one, in terms of sheer economic brilliance it's right up there with Kevin Rudd in 2008 giving out free 'stimulus' money to everyone including backpackers and some on temporary work visas.

Reserve Bank of Australia admits to holding only Unallocated Gold

This is a criticism of for the Reserve Bank of Australia (RBA) for their sloppy handling of Australia's gold reserves, lest they think they are somehow immune to scrutiny. During 2014, Bullion Baron (B.B.) has been on the case, pushing several freedom of information (FOI) requests in an effort to obtain some visibility - no less than three detailed articles HERE, HERE and recently, HERE.


Digging into the matter ourselves, Screwtape Files has hacked into their systems been fortunate enough to obtain a record of a phone conversation which took place between an RBA official and the Bank of England (Boe). The individuals remain unidentified but language pattern analysis indicates the conversation is authentic. For those of you without audio, I've taken the time to loosely transcribe the conversation (below).

(note: if the soundcloud applet above doesn't work, please use this link)