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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.

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NY Fed's Williams Says Rate Cuts in March May be Premature; Futures, Gold, Silver Slide Friday Morning

Friday, December 15, 2023, 9:15 am ET

It's safe to say that the Dow Jones Industrial Average will record its seventh straight weekly win, as it is already up an astounding 1000 points just this week. So too, NASDAQ and S&P 500, though the NYSE Composite has put up gains in just five of the last seven weeks, and being ahead by more than 500 points through Thursday's close, should finish up the week in fine order.

The Dow blasted through the prior all-time high on Wednesday and set another new mark Thursday, up another 163 points for a nearly one percent move. Benefitting the most from falling bond yields, the Dow's 30 components were gobbled up by investors this week for their high dividend yields. Companies like Verizon (VZ), with its seven percent yield, and 3M (MMM, 5.6% dividend yield) saw solid gains Wednesday afternoon into Thursday's trading.

Many of the stocks listed in the Dow 30 don't offer such exorbitant rates of return, but they are among the most stable and solid of all US and global stock offerings. As such, with the Fed signaling rate cuts highly likely in 2024, investors scrambled to get into these strong assets.

Following Wednesday's out-of-the-park rally in notes and bonds, yields continued to be slashed on Thursday, as the 10-year note dropped another eight basis points, down to 3.92%, while the two-year note slipped nine, now at 4.37%. 5s-10s, dis-inverted (normalized) on Wednesday afternoon and remain that way with five-year notes yielding 4.90%.

On the short end, bills haven't budged much at all. One-and-two-month bills are equalized at a 5.54% yield, still attractive for quick buck artists since the Fed isn't likely to lower rates before March. Once that happens, the shortest-duration bills will become less attractive.

With year-end approaching fast (after today, just nine trading days remain), there does not appear to be any negative catalysts to slow down the rally other than traders' sixth senses that may want to book profits either right before Christmas or on the shortened, four-day week between Christmas and New Year. Positioning for 2024 may be somewhat of a gamble as even more profit-taking may occur early in January, as tax-incentivized sellers would afford themselves 12 to 15 months time before having to pay the taxman for their winnings.

With that in mind, the rally may continue, especially if traders throw fundamentals out the window, a practice well-rehearsed over the past 20 years or so. The Fed has set the table. Active traders seem perfectly willing to gorge at the holiday stock feast.

Along with bonds and stocks, precious metals have also been beneficiaries of the Fed's positioning. Lower interest rates make hard assets with zero counter-party risk more attractive, and, with inflation not quite down to where the Fed (and consumers) would like it, there's the backlash effect that measured inflation via the CPI could crank up again. Levels of four, five, and even six percent inflation may be palatable for the Federal Reserve in advance of the November elections.

While Chairman Powell swears to being apolitical, his message is lost on the more cynical of observers. It would be a rare instance indeed for the Fed to raise rates at any time six months or less prior to the election. The betting is that the Fed is going to cut a quarter percent in March, and then again in May, June, and possibly July and September, shaving a full percentage point off the federal funds target rate, insuring looser financial conditions (which are already fairly loose) heading into the fall of 2024.

Gold was making another run at record highs this morning until just about 8:30 am ET when it appeared to be struck by lightning, dropping from $2,056 to $2,042 in a matter of minutes. Silver was ripped lower from $24.43 to $24.17. Futures were hit with the same hammer, the Dow and s&P futures going from positive to negative while NASDAQ futures took a tidy haircut.

The snapback was due to John Williams of the NY Fed appearing on CNBC and spouting off in words contrary to what Powell had spoken on Wednesday. Williams said, "we aren't really talking about rate cuts," and noted that it may be "premature' to be thinking about cutting interest rates in March.

This after Powell's statement Wednesday, "Rate cuts are clearly a topic of discussion out in the world and also a discussion for us at our meeting today." throws a significant wrench into the Wall Street gears.

Uh-oh. There goes the neighborhood.

At the Close, Thursday, December 14, 2023:
Dow: 37,248.35, +158.11 (+0.43%)
NASDAQ: 14,761.56, +27.59 (+0.19%)
S&P 500: 4,719.55, +12.46 (+0.26%)
NYSE Composite: 16,723.92, +163.21 (+0.99%)


It's a Christmas Miracle! Dow Makes New All-Time High; Gold Silver Soar; Bonds Ballistic on Fed's Dovish Tones

Thursday, December 14, 2023, 9:30 am ET

Well, deck the halls.

Courtesy of Federal Reserve Chairman Jerome Powell and his FOMC cohorts, various computer algorithms, 100% aligned, controlled markets, and a heaping helping of FOMO, Wall Street delivered the Santa Claus rally and a new all-time high for the Dow Jones Industrial Average all in one afternoon.

Trading turned from mundane to insane precisely at 2:00 pm ET on Wednesday, when the Fed, as was widely expected, decided to keep the federal funds target rate at 5.25-5.50%, right where it's been for the past six months.

The FOMC statement was compelling enough, replete with the "all clear" narrative on inflation, a few choice exaggerations, like these:

The U.S. banking system is sound and resilient. Tighter financial and credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation.

... and the usual rhetorical statements about monitoring economic conditions, but, Powell's presser following the announcement was the clincher. J-Pow could not have been more elegantly dovish, practically promising rate cuts in 2024 while steering clear of the obvious, saying, in part, "We don't think about political events. We just can't do that." In case nobody noticed, there's a huge election coming up in November of next year.

For the past couple of weeks, Money Daily has been advising to just go with the flow, which has been quite obviously to the upside. Anybody who's been short this market has been taken out behind the barn and whipped mercilessly. While there may not be exactly the kind of evidence the market needs to move forward, the narrative and the algos are, for now, all that's needed.

Stocks spent the first 4 1/2 hours of Wednesday's session just trundling along. The Dow traded in roughly an 80-point range up until 2:00 pm. Then, the fuse was lit, and BOOM, it was an equity bomb of plenty.

Even before the closing bell, the rally hats were coming out of the closets. The prior close of 36,799.65, from January 4, 2022, had been topped. By 3:37 pm ET the 37,000 mark had been surpassed and the market wasn't looking for excuses. the intra-day high (37,094.85) was just a few points above the final closing price.

The bond market was feeling no pain either. The moves in individual notes, especially the 2-year were outrageously off-the-charts. Yield on the 2-year note dropped 27 basis points, leveling off at 4.46%, a six-month low.

Clearly, this rally is just getting started. Money is flowing with an easy beat. The S&P is next in line to make new highs, then NASDAQ. Get on board!

This must be something special. Even gold and silver were bid, with gold approaching the record price from a few weeks ago.

Halleluja! It's a Christmas miracle.

More to follow...

At the Close, Wednesday, December 13, 2023:
Dow: 37,090.24, +512.30 (+1.40%)
NASDAQ: 14,733.96, +200.57 (+1.38%)
S&P 500: 4,707.09, +63.39 (+1.37%)
NYSE Composite: 16,560.71, +274.77 (+1.69%)


Israel is Engaged in Genocide; Final FOMC Meeting of 2023 Concludes at 2:00 pm ET Today

Wednesday, December 13, 2023, 9:00 am ET

Ongoing violence in Israel, the West Bank and Gaza Strip is worthy of attention. Money Daily opposes all forms of violence and hasn't taken any side in the current Middle East conflict.

That said, while there's no doubt the attacks by Hamas on October 7 were gruesome and atrocius and should be condemned universally, now, two months beyond that event horizon, Israel's consistent, constant bombardment of the Gaza Strip should not fall beneath the notice of anybody who values human life.

Tan Sri Syed Hamid Albar was formerly Malaysia's minister of foreign affairs and defense minister. He's calling on the Malaysian government to take Israel to the International Court of Justice.

From his opinion piece in the Malay Mail:

Article 2 of the Convention on the Prevention and Punishment of the Crime of Genocide, to which your country is a contracting party, defines genocide as "the intent to destroy, in whole or in part, a national, ethnical, racial or religious group, as such."

As a State Party to the Genocide Convention, Malaysia, with allied states, can activate Article IX of the Genocide Convention.

This would allow a case to be referred to the International Court of Justice (ICJ), including provisional measures to indicate to third states of their responsibility towards the prevention of Genocide, which so far has gone unheeded by too many countries around the world.

The ICJ expressly stated that the prohibition of genocide is an obligation erga omnes owed by each State to the international community as a whole, i.e., an obligation of universal applicability.

As such, the crime of genocide is subject to universal jurisdiction. Thus, Israel's genocidal crimes can be tried in our courts.

Mr. Albar is not alone. Israel's actions have caught the attention of many, including the top echelon of the United Nations, which voted overwhelmingly for a cease fire in Gaza via a general resolution Tuesday, the vote tallied as 153 in favor, 10 against, with 23 abstentions. The United States and Israel were joined in opposing the resolution by eight countries: Austria, Czechia, Guatemala, Liberia, Micronesia, Nauru, Papua New Guinea, and Paraguay.

Editor's Note: Incidentally, while perusing the article refeenced above, service provider Spectrum attempted to block the website, ostensibly for my safety. What's next? Cutting off my internet access so I don't harm myself? Don't laugh. If Americans stand back and don't do anything about the recent rampant rise of censorship in the formerly free states of the USA, those who oppose the official narrative will all end up in gulags. More, here.

Related to this story is the ongoing melodrama in the US congress involving the testimony of the presidents of three esteemed universities - Harvard, MIT, and Penn - and their failure to condemn calls for genocide against Israelis purportedly rising from campus protests.

Last week, Claudine Gay (Harvard), Sally Kornbluth (MIT), and Liz Magill (Penn), each roundly praised for their commitment to diversity and inclusion prior to their botched appearances before congress, attempted to couch their inaction (disproving the negative) in terms of free speech.

Congress wasn't buying it. Calling for the annihilation of an entire group of people (Israel, and likely, Jewish people in particular) isn't protected sppech, a la yelling "Fire!" in a crowded theater, except on a college campus, where freedom of expression is allowed much more latitude than anywhere else. Universities are, after all, crucibles of ideologies, good, bad, or inconsequential as they may be.

This entire episode may have been a trap sprung by congress, thrust into action by congresswoman Elise Stefanik, representing New York's 21st congressional district, who repeatedly badgered the university presidents with the same question: "does calling for the genocide of Jews on your campus constitute harassment, yes or no?"

Ideologically, the question isn't one that can easily be answered. It needs more context. If one says, for instance, "I think all Jews should die," anywhere on earth, it's not harassment if there aren't any Jews present. Even if there were, it's more opinion and hyperbole than anything else, and harassment, in most states and cities, is a misdemeanor, not a huge crime. So, it got set up, probably with the backing and implicit support of the ADL, served up on a silver platter for the media to digest and spit up all over the American and global public.

It's just another ploy to divide and infuriate people, set up factions, confuse issues and hide what very seriously appears to be genocide or ethnic cleansing by the state of Israel. Bombing entire residential neighborhoods into oblivion - which is what the IDL has been doing - on the notion that there are Hamas tunnels running beneath all of Gaza's infrastructure is the unproven story that Israel has employed to justify their massive wave of destruction.

One could just as easily bomb any city anywhere claiming that the terrorists are hiding in the basements of buildings, and since we don't know which ones they're in specifically, we're going to bomb them all. Israel should not be allowed to set up such a narrative by which to exterminate as many Palestinians as they desire. It's clear what Israel is doing and anybody supporting such action should be questioned as to why and for what purpose they're in favor of such atrocities.

Hamas was loudly and universally condemned for the events of October 7. Why isn't Israel being held to the same standards? At least 17,000 Palestinian non-combatants have died - many of them children - in the current Gaza slaughterhouse. Are we supposed to believe that Netanyahu is benign while Putin is a war criminal, where Russia has taken extraordinary measures of restraint in Ukraine to avoid mass casualties?

Why is Israel immune from criticism? Why are they allowed to commit genocide while nobody is allowed to call it that?

Sorry to have to bring the aforementioned matter up, but it needed airing. And more scrutiny.

Getting down to business for Wednesday, it's another Fed day, as the FOMC wraps up its meeting schedule for the year. Expected to announce no change to the federal funds target rate, there shouldn't be too much of a movement in stocks, especially now that the VIX is at levels not seen in four years (11.82).

Yet, there has to be some hype, likely to come from the press conference following the 2:00 pm ET release or the various dot-plots and charts that are sent up at the conclusion of each quarter.

Gold and silver are both down again. It's probable that no matter what the Fed policy decision is, precious metals will trade at lower prices. Silver is now down to $22.94 on the COMEX continuous contract. It appears that it may test $21 again.

WTI crude oil, after peaking above $72/bbl. on Tuesday, was slammed back to as low as $68.25 after the API report cited a large build (1.4 million barrels) at Cushing, Oklahoma and another in a series of gasoline inventory builds.

Stock futures are higher an hour prior to the open. Asian stocks were mixed; European stocks are up marginally at midday.

At the Close, Tuesday, December 12, 2023:
Dow: 36,577.94, +173.01 (+0.48%)
NASDAQ: 14,533.40, +100.91 (+0.70%)
S&P 500: 4,643.70, +21.26 (+0.46%)
NYSE Composite: 16,285.94, +11.50 (+0.07%)


November CPI Perfectly Fine at 3.1%, As Expected; Gold, Silver Make Ideal Christmas Presents and Are Sale-Priced for the Holidays

Tuesday, December 12, 2023, 9:15 am ET

As expected, November CPI came in "as expected."

Big surprise. To nobody. Headline CPI was +0.1% on the month, +3.1% year-over-year. October's annualized rate was 3.2%. Core CPI was quoted at 4.0% annualized, matching the October rate.

This paves the way for the FOMC to keep the federal funds target rate at 5.25-5.50%, as it has been since July, and for everybody to buy more stocks, since everything is just peachy again and inflation will soon be only two percent, as the Fed wishes.

Bring on the Santa Claus rally hats.

Sometimes, you just have to sit back and laugh and go with the flow.

After the 2:00 pm ET rate policy announcement of the Fed standing pat (as expected, sorry!) on Wednesday, Chairman Jerome Powell will hold a press conference, mumble some things about additional rate hikes still being possible, how the Fed has done such an outstanding job killing the inflation monster, and take pre-screened questions from the usual groveling financial scribblers.

Elsewhere, also as expected, gold was beaten down below $2,000 per ounce on Monday, bounced back to $2,010 on the CPI release, but is being shoved back to earth with a half hour to go before the opening bell. Silver, which has helped gold down from its recent all-time highs, has been smacked down to the low $23 range, the perfect opportunity to pick up some stocking stuffers for the loved ones, or, even your relatives.

Despite the good news, Asian stocks were essentially flat overnight as are European stocks at midday. Tuesday could turn into one of the dullest trading days of the year, given the FOMC announcement on Wednesday, which doesn't make sense since the Fed never surprises anybody, ever.

Buy!

At the Close, Monday, December 11, 2023:
Dow: 36,404.93, +157.06 (+0.43%)
NASDAQ: 14,432.49, +28.51 (+0.20%)
S&P 500: 4,622.44, +18.07 (+0.39%)
NYSE Composite: 16,274.44, +66.68 (+0.41%)


WEEKEND WRAP: Stocks Slowly Make Gains; Gold, Silver Hit Highs, Then Fall; Armageddon Approaches

Sunday, December 10, 2023, 10:20 am ET

This past week was one overloaded with employment data. As such, it produced more questions than answers and minuscule gains for stocks while bonds turned the other way by Friday. The short-term stock and bond rallies appeared somewhat flushed out, running on empty promises and a lack of momentum. FOMO took a back seat to profit-taking and churn. As usual, gold and silver were whipsawed.

Stocks

A win is a win, right?

For the Dow Industrials, it was two points, a buzzer-beater, if you will, that put it into the positive for the week. NASDAQ outperformed all rivals, up 0.69% on the week. The S&P 500 was up nine points while the NYSE Composite and Dow Transports suffered weekly losses. For the big three, the weekly gains were their sixth straight.

As has been the case in a number of these recent weekly wins, Friday's gains pushed the Dow and S&P over the top and made NASDAQ look a little better. The Comp. and Transports weren't so lucky.

Winning streaks are nice until they end. Judging by the lack of commitment and size of this week's gains and the two preceding it, the winter rally seems to have lost some steam. Stocks could keep rising for the final three weeks of the year can close out 2023 with a real bang and outsized returns, but valuations are strained and tax-selling hasn't fully kicked into the equation. Heavy hitters are probably more concerned right now about shedding losers than bucking up winners. The gains are in. Except for the outlandishly greedy, everybody's satisfied with this year's returns. Thus, there's good reason to expect sideways trading at best, a two to four percent pullback at worst.

Sure, there's 14 trading days remaining in 2023, but there's also earnings out beginning the third week of January, which seems like a better time to begin poking around for new positions. Take the money made this year, buy some presents and spend time with the family. Seems like the almost human thing to do.

Along with the obviousness of taking profits, there's the matter of valuations and the bigger picture. A look at three or five-year charts of companies like Disney (DIS), eBay (EBAY), and Discover Financial (DFS) expose the frailty of markets and these stocks in particular.

Disney is the poster child of "go woke, get broke" ideology. Share price has been halved, and, despite the recent gains, the stock appears ready to roll over again. Ditto, eBay and Discover, two companies that produce nothing but facilitate spending and rake in fees. Neither are growing, that being the proximate exercise of capitalism. Bank stocks, Bank of America (BAC) in particular, are also in that gang of companies that do little other than skim money off their users. After a while, investors see through the flimsy rhetoric and desire something more substantial. Tech has filled the bill in recent years, but manufacturing, actually making something and selling it, is preferred. A sector shift is very likely over the next few months, whether the economy grows or not. Hard asset companies are likely to hold up better in a downturn. In an expansion, they're likely to be the ones causing it.

World politics and economic dynamics aside, companies that return dividends and show improving growth trajectories should do better.


Treasury Yield Curve Rates

Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
11/03/2023 5.53 5.56 5.53 5.50 5.45 5.29
11/10/2023 5.53 5.55 5.53 5.47 5.46 5.38
11/17/2023 5.52 5.54 5.50 5.42 5.39 5.24
11/24/2023 5.55 5.56 5.54 5.48 5.45 5.27
12/01/2023 5.55 5.53 5.43 5.45 5.33 5.05
12/08/2023 5.54 5.53 5.44 5.49 5.39 5.13

Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
11/03/2023 4.83 4.62 4.49 4.55 4.57 4.93 4.77
11/10/2023 5.04 4.80 4.65 4.68 4.61 4.93 4.73
11/17/2023 4.88 4.64 4.45 4.47 4.44 4.80 4.59
11/24/2023 4.92 4.67 4.49 4.51 4.47 4.79 4.60
12/01/2023 4.56 4.31 4.14 4.22 4.22 4.58 4.40
12/08/2023 4.71 4.45 4.24 4.28 4.23 4.49 4.31

Yield on the 10-year note dropped as low as 4.11% during the week (Wednesday), to the lowest points since August 31 (4.09%). We all know what happened during and immediately after that. Yields rose, with the 10-year briefly popping above 5.00% in late October, just before the Fed jumped into the fire and bailed out the stock market.

Around the same time, the 2-year yield was touching 5.20%, and not in nice places, putting severe pressure on everything from credit cards to auto loans to short-term leases. By the end of October, 2s-10s were at 5.07% and 4.88%, respectively, a spread of just 19 basis points, and obviously too close and too soon to normalizing for the Fed. November saw a rally in bonds that pushed yields down and made stocks very attractive.

Yields were mashed, like potatoes at Thanksgiving, a mush-fest that continued for two more weeks, culminating in Thursday's spead of just 44 basis points, with the 2-year at 4.58% and the 10-year at 4.14%. Everything changed on Friday with the non-farm payroll data from November indicating that employment was still relatively strong, with an extra boost from two strikes ending, actors and auto workers.

Odds of a FOMC rate hike in the week ahead haven't changed much, though the Fed has surely made a case for further hikes and that was bolstered by the November BLS employment report. Regardless, a rate hike on Wednesday is improbable, though still possible. The FOMC will have a front-row seat for November CPI and PPI, released on Tuesday and Wednesday mornings, respectively, each prior to the 2:00 pm ET policy rate decision on Wednesday.

Along with the final FOMC policy meeting December 12-13, comes the usual dot-plot nonsense and a press conference by Chair Powell. Expectations are for the Fed to hold steady on rates, which have not increased since July, remaining at 5.25-5.50%.

What the jobs report did affect, however, was the calculation on when they would lower interest rates. With continued strength in employment, the Fed will be in no hurry to tamp down rates. The people who were calling for a Fed "pivot" from late 2022 though the middle of this year are the same ones predicting not just one or two, but a series of three to four rate cuts in 2024. Giving consideration to election year politics, they may be right, but probably for the wrong reasons. Chances that the Fed will cut rates if the economy wavers are 100%. There's likely a good case for an external event, i.e., Covid, 9/11, etc., to force the Fed's hand since the operators within the government conspiracy have proven to be willing to stop at nothing to achieve their ends.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123


Oil/Gas

WTI crude ended Friday at $71.26, down from $74.38 last week, $75.18 the week prior and from $76.08 the week before that, keeping in place the deflation since the peak September 27 at $93.68, and putting to shame Goldman Sachs and JP Morgan analyst predictions of $150 crude.

Oil prices slid as low as $68.89 Thursday afternoon, after API reported large builds in stockpiles of oil, gasoline and distillates. With promises of further production cuts being mere suggestions and talking points at the recently delayed OPEC+ meeting, oil traders finally began to get wise to the narrative. With the US probably behind Venezuela's plot to steal oil from neighboring Guyana because they've mismanaged their own production, geo-politics was ratcheted up a notch, taking some pressure off Israel and Ukraine, both of which look like huge diplomatic and military miscues by the Biden team.

Reiterating last week's outlook:

Slowing economies, conservation efforts, further efforts toward electrification world energy structures, and an overall glut on the market continues to weigh on prices. The range between $70 and $80 remains a comfort level for both producers and consumers, though prices could easily fall further, as they did intermittently between March and July of this year. If winter in the Northern Hemisphere is a mild one, which is likely due to el Nino, and US and European economies continue to cool down, prices could conceivably drop into the $55-65 range by February or March.

According to gasbuddy.com, the national average for a gallon of unleaded regular gas at the pump dropped a dime over the week, to $3.14.

The Southeast, other than Georgia ($3.02) and Florida ($3.00) is currently at or under $3.00 a gallon, and that swath of sub-$3 gas pushes through the midwest all the way up to Iowa ($2.83), Wisconsin ($2.84), Minnesota ($2.95) and North Dakota ($2.94). Oklahoma has the lowest-priced fuel, at $2.58, followed by Texas ($2.59).

Despite another nine cents lower, California remains the most expensive state, at $4.70. Prices eased across the West, with Washington ($4.26) down another seven cents. Nevada fell to $4.01, down a full ten cents. Oregon ($3.91) remains out of the $4+ club; Arizona ($3.31) fell another 10 cents. The $4+ club is comprised of just three states for the second straight week: California, Washington, and Nevada. Back in the summer, the ranks had swelled to as many as eight.

In the Northeast, Pennsylvania is the highest ($3.50), followed by New York ($3.45), with prices down in both states. The lowest prices in the region are in Kentucky ($2.83) and Ohio ($2.83). Even with a 10 cent decline, Illinois ($3.27) remains on top in the Midwest, followed by Michigan ($3.13).


Bitcoin

This week: $43,932.70
Last week: $39,595.40
2 weeks ago: $37,217.80
6 months ago: $25,856.10
One year ago: $17,115.60

Bitcoin made another big move this week, again on speculation of a spot ETF and other hyperbole. It's basically tripled in a year, proving its volatility. Bitcoin "hodlers" and speculators have had a good year.

Precious Metals

Gold:Silver Ratio: 86.77; last week: 80.76

Per COMEX continuous contracts:

Gold price 11/10: $1,942.70
Gold price 11/17: $1,983.50
Gold price 11/24: $2,023.60
Gold price 12/01: $2,091.70
Gold price 12/08: $2,020.80

Silver price 11/10: $22.31
Silver price 11/17: $23.77
Silver price 11/24: $24.73
Silver price 12/01: $25.90
Silver price 12/08: $23.29

We all knew it was coming. As disappointing as it may be, the price suppression of gold and silver will never end until the practice of pricing physical metals in paper contracts on the COMEX futures exchange is discarded. Prices, manipulated by the London fixing and then further contrived in the futures market by a cohort of central banks, bullion banks, and various speculative proxies, are entirely a function of leverage and control, rather than being based on pure supply/demand dynamics or some accepted international standard.

With East and West becoming increasingly socially, politically, and financially separate, the potential for a variety of pricing schemes comes closer to realization. More diverse markets such as the Shanghai Gold Exchange, and smaller venues in Moscow, Dubai, Istanbul, India, Japan, Singapore and Hong Kong have yet to exert enough influence over global pricing, though local pricing functions as a of currency values (FX).

So long as currencies float and trade against each other, gold and silver will fluctuate accordingly in local markets. To date, after more than fifty years of floating fiat currencies the dominant global financial standard, prices of everything and anything traded in bulk internationally, are subject to dollar and euro hegemony, though BRICS+ nations continue to push back against the uni-polar standard. As fiat currencies continue their long, grinding devaluation process, it's apparent that central banks, particularly the Federal Reserve, prefer a slow burn to an uncontrolled conflagration.

Thus, supporters of gold and silver remain trapped in the global pricing scheme that does not benefit minors, buyers, nor sellers. It's worthwhile to value wealth in grams and troy ounces, keeping prices in local currency a back-burner issue while continuing to make acquisitions. Prices, as should be apparent to all, are going to be controlled by insiders, central bankers, and institutions within the fiat currency regime.

It was a little more than a week ago that Andrew Maguire said the riggers would hammer down silver to keep gold in check. Judging by the huge change in the gold:silver ratio, it appears his analysis was spot on.

In a recent article, Ted Butler describes the scene on the COMEX (Globex) Sunday night, (December 3) into Monday morning (Dec. 4) through the lens of intense speculation allowed by the CFTC and CME.

Pointing out the obvious speculation plays, he asserts that the rapid rise of the gold price to record levels and its subsequent fall were all managed within the framework of paper contracts, with no gold or silver actually changing hands. This condition has persisted for 40 years or longer, with no end in sight. The only logical action to be taken by buyers of actual precious metals remains the same: keep stacking! Prices are still low compared to the increasingly-worthless fiat paper.

In conclusion, it's worth noting that if the plan of central bankers and backers of the US dollar as the ultimate hegemon is to keep prices of gold and silver depressed, they've failed miserably. Prices of both metals are higher by orders of magnitude than they were 40 or 50 years past. Consider gold, traded at between $35 and $42 back in the 1970s before it exploded in price. Equally telling is that when siver was removed from circulation in 1964, 5.53 silver quarters contained one ounce of silver, making the price per ounce roughly $1.38.

It just goes to show how currency, created out of thin air, has devalued (inflated) over time. There's no stopping this process. It's unrealistic to believe US and global debts are ever going to be repaid unless the currencies become completely worthless. The value of gold and silver do not change, but their price, measured in fiat currencies continues to rise. Buying on dips is not only sound investment strategy, it's also insurance against the eventual, ongoing global monetary collapse.

When the prices of gold and silver are purposely reigned in or stocks and bonds manipulated to desired levels, ostensibly by central banks and their agents of obfuscation, the question arises as to their losses from their upside-down Ponzi scheme and how those losses are reconciled. They aren't. At least not for public consumption, because they just created more of their currency as needed, feeding the debasing monster even more. Central banks don't care about their own books because their so-called "money" has become pretty much purely fictional.

They've maligned or eliminated all price discovery mechanisms except their own, creating a controlled environment complete with horrific distortions that destroy confidence and ruin lives. The end of central banking cannot come soon enough.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):

Item/Price Low High Average Median
1 oz silver coin: 32.00 40.00 37.05 37.00
1 oz silver bar: 30.00 45.00 35.66 34.95
1 oz gold coin: 2,055.00 2,199.00 2,125.65 2,125.25
1 oz gold bar: 2,059.00 2,183.44 2,102.62 2,093.85

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell over the course of the week to $36.17, a loss of $1.23 cents from the December 3rd price of $37.40 per troy ounce.

As expected, prices on eBay moderated in line with the hammered down spot price though buying and selling remains robust. So far, there's little supply stress in finished products. Premia remains elevated.

Precious metals experts Criag Hemke and Andrew Maguire talk their book in this extended episode of Live From the Vault (LFTV):

WEEKEND WRAP

Well, keep shopping. Central banks need you all to buy everything, regardless of price.

Happy Holidays!

At the Close, Friday, December 8, 2023:
Dow: 36,247.87, +130.49 (+0.36%)
NASDAQ: 14,403.97, +63.98 (+0.45%)
S&P 500: 4,604.37, +18.78 (+0.41%)
NYSE Composite: 16,207.76, +70.91 (+0.44%)

For the Week:
Dow: +2.37 (+0.01%)
NASDAQ: +98.94 (+0.69%)
S&P 500: +9.74 (+0.21%)
NYSE Composite: -56.00 (-0.34%)
Dow Transports: -252.70 (-1.63%)


Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2023, Downtown Magazine Inc., all rights reserved.

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