Commentaries

We have always regarded the markets as a grand casino subject to the manipulations of the Croupier and the House.

Gold rose sharply Wednesday after a European Central Bank council member suggested the possibility that Europe’s rescue fund could get a banking license, allowing it to tap cheap ECB funding.

It seems that every season we hear a new catch phrase, be it “subprime,” or “quantitative easing”, or “risk on, risk off” or “the new normal.” The latest bon mot if you haven’t already come across it, is “fiscal cliff” with the attendant worry that the U.S. is about to fall off a precipitous edge.

I see analysis popping up out there refuting the bearish Descending Triangle view and in my opinion that is with good reason; it looks a lot more like a massive consolidation of previous bullishness than a topping pattern. However, a common theme seems to be some kind of static about a QE3 ‘Super Sunday’ (don’t … Continue reading

Each week we reply to questions from our subscribers and include them in our Premium Updates. Today’s essay is dedicated entirely to commenting on one of the letter that we received this week.

The FOMC announced that Operation Twist would continue through year end.  This is where the Fed tries to re-inflate the housing bubble (and related areas) by buying long term T bonds to artificially hold down long term interest rates while sopping up any inflationary implications to the money supply by selling short term T bonds.  … Continue reading

The rule of the casino emphasizes that in order for one to be right in the market, the consensus has to believe that you are wrong.

The Federal Reserve will hold a two-day policy meeting on July 31 that is expected to yield no change in U.S. interest rates, but markets will analyze and dissect every word of Chairman Ben Bernanke for any clues that the central bank will do more to promote economic growth.

Although it probably won’t happen within the next couple of months, it’s a good bet that the ECB will eventually be prodded into monetising a large amount of European government and commercial bank debt.

I have recently written about the breakdown of disaggregated data from the futures markets into producers and swap dealers for gold and silver futures, as reported in the Commitment of Traders reports issued by the US government’s Commodity Futures Trading Commission (CFTC).