potatohead

These government polices are getting more creative when it comes to kicking the can down the road (deficit spending, tax cuts, and then tariffs to pay for the prior 2). The borrowing and spending game keeps going as long as everyone interprets this debt bonanza as actual economic strength. I agree, this creativity is really another way of trying to manage all this leverage. Income statements dominate in a bull market, while balance sheets dominate in a bear market.

For anyone interested or will be attending. I will be at the CME Precious Metals dinner in New York City Tomorrow night (9-12-2018).

I love how Yahoo finance associates the following picture with today's stock market story. I guess they are trying to mask the dead volume with 25 year old pictures when exchange floors had a heart beat.

Good point. However, I would think that the stock market would be a deeper source of liquidity.There is not nearly enough physical gold out there for debtors to fund their dollar short squeeze. Especially when the price of gold is collapsing. Would think a default would be more in the cards if can not find enough dollars. Why would emerging market countries sell off strategic assets when the debt burdens may never be able to be paid off? Would be easier to walk away. Similar to the US mortgage crisis.

This seems to set up well for a major market event sometime around mid term elections. Would imagine that is when the cycle turns for commodities relative to financial assets. At the same time the retail investor has no interest in precious metals, similar to around the 2000-2001 timeframe. This is coming at a time when currency/systemic risk is starting to become a real issue again. I think your liquidity analysis is painting the perfect picture. Sometimes markets can stay irrational longer than we think.

I would highly doubt a secular bear market in gold would last that long. The following chart resembles a major bottom forming rather than a continued slide into the abyss. The strength in the US Dollar seems to be playing havoc on the world markets.

I respect Armstrong, However, there is an important distinction between a market going up on liquidity versus a mania or leverage. The rotation into US stocks may simply be a rotation out of bonds or money managers chasing performance. There is nothing new here. Lee's liquidity analysis is outstanding and shows the game for what it is. I think the market will crack hard as draining liquidity hits its pressure point. Ignore this at your own peril. The market could go higher as shorts get squeezed. Very similar to all other tops. However, commodities, emerging markets, and foreign currencies have been telling us that a deleveraging event is unfolding under the surface. Any real pressure on US asset values will ultimately lead to the dollar being sacrificed, This is precisely the assets which are being shaken now. This has been the playbook for the last 30 years. I agree interest rates are going higher and the liquidation from bonds will probably drive inflation higher. This may lead to higher stock markets down the road, but I think the central banks are trying to slow down this melt up.

Can not think of a period in history where what you just said made any sense.......

With all those shoulders......I am thinking the chart must look like this.

Always respect your analysis. I try to stay out out politics. Trump certainly has the public believing he will make America great again. Interested to hear your Russian agent perspective. If true, would be one hell of a misdirection that has been played on the public.

saw the following comments. sums up sentiment pretty well. If you have been following the price of Platinum in the last three weeks, you would have noticed that it traded from a high of $912 in mid-June, to a low of around $800 an ounce this week in the NYMEX most active futures contract. That’s a significant drop in just 20 days (particularly since it hit a 14-year low this past Tuesday) Virtually a sinking ship, as all the news stories have had negative implications. Proposed trade tariffs by the Trump administration, potentially hurting the automobile industry in a big way. Some predicting that these tariffs, could add $ 6,000 to the price of the average new car now selling at $32,000. Also hurting the price of Platinum is the reduced amount of worldwide production in catalytic converters as consumers are more and more changing gears to new alternative vehicles. Diesel car registrations have declined by almost 18 percent in the first quarter this year, adding fuel to the fire are stories like this one in Hamburg Germany. Hamburg is the first city to ban some older diesel cars to improve air quality, setting a template for other urban cities to join in. Earlier in the year the Chinese government suspended the production of more than 500 car models that did not meet its fuel economy standards. The latest move by Beijing to reduce emissions in the world’s largest auto market and take the lead in battling climate change. The Chinese government has already become the world’s biggest supporter of electric cars, offering automakers numerous incentives for producing so-called new energy vehicles. Those incentives are set to decrease by 2020, to be replaced by quotas for the number of clean cars automakers must sell. That has sparked global automakers to pick up the pace in their shift towards battery powered cars. What I found interesting during this period was the action in the futures market. If you followed the trading action, the bids were few in comparison to the outstanding offers. It seems as it became apparent that very few if any investors and traders were willing to put a bid in the market, so the shorts had their way with all the action. It wasn’t till this past Tuesday when some bids emerged and stopped the bleeding. Every market in a downward spiral eventually finds support. But the question remains how much of an impact, will these tariffs have on the price of Platinum from here on out? Since the world is turning away from Diesel vehicles and the prospects of tariffs on automobiles coming into our country seems to be gaining momentum each day, one can expect pressure on the price to continue. Technical levels at this juncture are indicating Platinum is a buy (sentiment) and below the cost of production. However, cost of production means very little when it comes to precious metals. Unfortunately the news seems to be controlling the market for the time being and funds are big time short. The contrarian play would be to buy, but no one likes trying to catch a knife at the same time. Will try to post levels next week.

tell us what you really think.........great interview as always.

As liquidity tightens, Trump may be trying to control the descent of the market by creating headlines as an excuse for selling. Then taking walking back on the announcement to keep the distribution going and create a rally.

Looks like the market slipped on the soap or bent over to pick it up……..

Always ends well...............not!