"Off Main Street: The SpeakEasy/BackRoom"

Pining said:

"This thread is my guilty pleasure, following along on my iphone as I watch a movie with my better-half at night.  Helps to deal with the occasional, uh, female-oriented cinematic selection."

Sounds like a typical night for me.

Congrats on the hat. Great picture.  (re-hypothecated seems to be in our vocabulary more now)

Am back from my double childcare duties (temporarily!) - my other half has some concerns as to exactly what goes on on TFMR considering how much time she observes me spending on it - convinced there must be some yellow-foam lingerie-wearing mistress lurking on here!!

Re your question I must preface my answer by reminding you that I don't trade and am shocking at short-term calls...however the rationale is as follows:

I see next week as being fear gripped for the macro picture (as you have observed).  In the past year the only times PMs have acted as PMs is when there is genuine fear of 'calypso collapso' - see mid summer 2011 as an example.  It seems that when thing potter along we go nowhere.  This big picture set up is accentuated by the fact that weak hands are well flushed out now within the current wash and rinse mini-cycle and as the London Trader pointed out last week, the big buyers are clearly lurking in the weeds, are there is major size and aren't for budging.  I also like the look of Jesse's weekly charts (i like these most of all).

This is however I must admit, thin and weedy analysis even by my standards!

Lets use an analogy and think about the silver based money in the Roman Empire. Prices were stable and the system worked well until the emperors started debasing the currency.

Similarly under the issuance of debt free money the money supply cannot withstand debasement which in this case amounts to increasing the supply to a greater extent than the total economic activity. With too much money is the system hard assets would cost more than at a prior time and would be seen as inflation. In a well regulated democracy any government that excessively increased the money supply and so created inflation would be voted out of office, providing necessary feedback.

Also under this system you would not pay interest on a mortgage since money issued as debt would not exist. To buy a house you would contact an agency (may be government or private) that had the money to finance your house. You would pay a fee for their service of obtaining the land, hiring the builder etc. and move into the house. Initially the house would be owned largely by the lender but as you paid back the loan you would acquire a larger percentage of the house until it was 100% yours. (My understanding is that businesses operate this way under Islamic law, with the lender having skin in the business, to use the vernacular). With money not being issued as debt, and with no inflation this is a logical monetary system that relies upon true democracy.

Tabberto-  Thanks for answering, even in the midst of childcare duties!  Your noting the 'weak hands / strong hands' issue certainly well-founded, and what I was seeing on the charts Friday suggested (to me, anyway) that some deep strength underlay the move up from lows- someone liked that sale very much and bought with ferocious strength for about an hour.  So many variables at work here, and if European investors flee to PMs as a safe haven, it could very well overwhelm the "raising cash" selling of banks and related funds.  If the deep pockets Asian longs wait it out for a sale, however... hmmm.  

And I am in the same boat with my better-half, though she has moved from "You are on that site AGAIN?"  to a more resigned "What is Turd saying today?"    Progress, my friend.  Incremental progress.  

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Steve W:   Yes, I have been following the various points of view at the Trading Corner (a place I lurk daily) quite  avidly, though I have noticed over the years that there is a tendency of the "Trade the charts" daily buy-and-sell crowd to be caught unawares by large macro moves driven by events like this could turn out to be.  Few chart or system traders were prepared for what happened post-Lehman, for example.   It is understandable since they either 1. have a system they work regardless of the news, or 2. are chart-oriented and trade based on their own favored signals and chart settings.  I greatly appreciate their discussions, however.  

Looks suspiciously like Mont St Michel in Normandy and while the sea may be 15 miles away those sheep had better get off the marsh before the sea roars in at 15 mph. 

I sent my wife Be Preps recipe for "crack bread". Of course she is a hater of all things unhealthy and especially processed. This was her response.

Is this from a turd-ite? If so, I knew it was only a matter of time before you fellas starting trading recipes. BTW, this sounds disgusting. He could have at least used real bacon pieces for God's sake!