Another Step Higher?
According to plan, the metals are extending higher this morning. While this is fun to see, The Big Show begins tomorrow.
But tomorrow is tomorrow and today is today. Events this morning have been influenced by a couple of headlines, both summarized in these articles from ZH. First, a report from the Congressional Budget Office that the fiscal year 2012 budget deficit has reached $1.165T...and there are still two months to go!! http://www.zerohedge.com/news/us-august-budget-deficit-soars-192-billion-117-trillion-fiscal-2012. Again, I ask the question, from where is this money coming? The U.S. government, from November of last year through last month, has spent 1,165,000,000,000 more dollars than it brought in. Did, as politicians like to suggest, the U.S. borrow it fwom da wascawwy Chinese? Uh...nope. In fact, new Chinese purchases of U.S. treasury debt have nearly stopped. The slack has been picked up by the Japanese but, net-net, the "contribution" from these two countries is flat. http://www.zerohedge.com/news/presenting-shocking-source-us-treasury-demand-past-year
Then there's this. Moody's warned this morning that congressional failure to reach some level of "budget cooperation" will lead to a downgrade of the U.S. credit rating. (As if that shouldn't have happened months and/or years ago.) http://www.zerohedge.com/news/moodys-warns-1-notch-downgrade-if-bitterly-divided-congress-does-not-begin-cooperate & http://www.forexlive.com/blog/2012/09/11/moodys-text-to-downgrade-us-if-no-deal-to-cut-debtgdp-ratio/. This seemed to really spook the headline-chasing algos and The Pig almost immediately showed a 79.** print. Those same WOPRs then bid up gold and silver and here we are.
As I type, I've got $1737 and $33.80. Not exactly a Happy Tuesday...yet...but still far better than the levels seen yesterday afternoon during another inglorious, Globex pilferage. If the metals don't break higher soon and, in the process, trip some more buy-stops, we'll likely remain in the current range as we await the events of tomorrow. As stated yesterday, beware anyone who claims they can accurately predict the judgments of the German Constitutional Court AND the global market reaction. This is a double wildcard event and we are all simply along for the ride. (Be sure you keep your hands and feet in the car at all times. Riders with high blood pressure or pre-existing back pain should exit the ride now, along with all expectant mothers.)
Next, I need to pass along a big group of thank yous. If you've ever clicked the "Feed The Turd" button, you've seen that there is a snail mail option available. Our developer, Ron Shimshock, graciously collects items that are sent in and then, every few months, bundles everything together and ships it off to me. All honoraria is greatly appreciated and my family and I particularly enjoy the personal notes and cards. Thanks to all listed below for making the effort. Again, it is very, very much appreciated!!
Mike Mc, Glen S, Mark & Hui H, Paul J, AgAu121, Anne I, Brandon S, Joe Z, Jon F, Tom & Kathy D, Mark & Cindy W, Nancy D, Tom C, Larry F, Al K, Prof M, James R, MagicBus, Don S, Alan B, David W, James J, Phil M, Will N, Chris C, Dennis O, El G, Frank P, John Mc, Kevin R, Robert L, Norm C, Christine E, L J, D D, Richard B.
Lastly, today is a very important and very sad anniversary and I hereby make a simple request. You may think you know what happened that day. You may think you know of who was responsible and why things transpired the way they did. However, the only thing we know with certainty is that nearly 3,000 people died that day. Please honor the loss of life by taking time today to reflect upon your personal blessings and pray that a similar tragedy is never visited upon you or your family.