YIKES! With all of the recent craziness, would anyone be surprised by some completely unexpected stuff today? So far, so normal. However, given the perverse senses of humor within The Evil Empire, we all should be on the lookout today.
So far we've dodged a couple of bullets. The CPI (ridiculous farce) came in a 0.3% and "right in line with expectations". Expectations of what? A wholly manipulated and completely useless measure of inflation? If that's what everyone was expecting, then great. But, again, ask yourself. Is price inflation really at just 4% annualized? Really? Have you been to the grocery store lately? Oh, that's right...food and energy are not included in the CPI. Of course! Why on earth would you want to include the two most basic essentials of life in the U.S.? Let's, instead, pay more attention to the cost of washing machines and blue jeans. What an absolute joke.
L'il Kim shot off his missile overnight, too. Oooops. No workie. Gotta wonder about this for a minute. It seems to be generally accepted now that the Stuxnet virus was planted by the U.S. and/or Israel into the nuclear weapons program of Iran. It is also generally accepted that the virus was able to slow and delay the Iranian program for months. Well, if it's possible to work a virus into Iran's nuke program, how hard can it possibly be to work a virus into L'il Kim's rockets? Or try this one on for size: If Iran can successfully "hijack" a top-secret U.S. drone and safely land it at an airbase within Iran, how hard would it be for the U.S. to "take over" the computer and guidance systems of L'il Kim's mission control? Anyway, it seems highly likely that Kim's premature combustion was sabotage, not simple incompetence and, if that's the case...this is far from over. What do irrational humans do when cornered/embarrassed/frustrated? They usually act even more irrationally. Stand by.
When I started typing this post, the metals were chillin and now they're getting smoked...well, a little. I'd drawn some support lines on these charts about an hour ago but I was hoping we wouldn't need them today. Nuts. Anyway, see the charts below for some support lines and let's hope they hold so that we are set up for a positive week next. (And does today's rally in the POSX on euro weakness really surprise anybody? If so, you must not have read the previous post.)
Three other things. First, I thought I might lift this paragraph from Uncle Ted's mid-week newsletter. Very interesting, from the point of view of perspective:
"I would remind you that these conditions have been a regular feature of the silver market over the past ten years (excepting the presence of HFT). While we have climbed sharply over the past ten years, that extraordinary price rise witnessed its share of sharp takedowns and prolonged periods of price stagnation. For example, the price high at $8 in 2004 wasn’t exceeded for almost two years, as was the price high of $15 in 2006 which wasn’t exceeded for almost as long. It took more than two years for silver to exceed the price highs of March 2008 of $21 (when JPMorgan took over Bear Stearns). Yet anyone who bought at the former highs and held on was rewarded, as will those who bought at last year’s highs. (Going back even further, the decade or more that silver traded between $4 and $5 was the biggest price doldrums of all; along with being a great time to accumulate). My point is that during the last three silver price doldrums, the gloom and negative talk was almost thick enough to cut with a knife, almost the same as now. Yet history shows us that the very best time to buy was during past price doldrums as was it also the very worst time to sell."
Next, an update on Spain from Gonzalo Lira. I'm also including a ZH link which discusses the surge in Spanish CDS. Ruht-roh, Rhaggy!
Lastly, it's Friday so I'm looking forward to another CoT report this afternoon. For the reporting week, gold fell about $10 in price and OI contracted by about 3,800. Silver fell by about $1.60 and it's total OI fell by about 2,000 contracts. Based on this, I'd expect a modest "improvement" in the CoTs for both metals.
OK, that's all for now. I recorded another terrific podcast yesterday that I intend to post this afternoon so please be sure to check back later or over the weekend. TF