Space, Time, Nathaniel and The Gold Market

Mon, Mar 10, 2014 - 11:56am

I was child of the 1960s, which means that during the 70s I was in my teens. Like “the Curate’s Egg” There were good and bad parts to that decade. One of the good parts was that the genre of science fiction exploded from a tiny thing into a publishing deluge, and that was accomplished in the main by the emergence of a group of very gifted authors.

Arthur C. Clarke, Brian Aldiss, Robert Heinlein, Isaac Asimov, Philip K. Dick, Poul Anderson, Frank Herbert, Ursula LeGuin, Harry Harrison all come flashing to mind in an instant, in this regard.

The movie industry seems to still find much to produce from among the collective creative writings of these prolific authors, so great was their contribution of innovative ideas.

I especially appreciated the short story form of science fiction. This was demanding upon an author, because for each story an new reality, universe, planet, society, characters and plot had to be created. I’m sure writing a longer story would have been easier, though of course characters would have had to have more depth. But I really appreciated the freshness of the short story form, with every chapter of a book a whole new scene, different from the last.

I want to give a special mention to Brian Aldiss just now. He was a UK based author and editor of other authors’ anthologies of short stories, and a master of his craft.

In 1971 Aldiss wrote “Space, Time, and Nathaniel”. This book, in a time when acronyms were reserved for long names only and 3 syllable words were uttered without shortening became affectionately known as STAN. I think it was Aldiss himself who started that in an interview or public appearance.

The artwork which was in vogue at the time for these kind of books was stylish, even cultish, and fascinating. STAN was a good example:

The keynote short story in this book, of the same title, was about an artificially engineered creature called “T”. T was one of several similar creatures, each with a single letter for a name, made with only one purpose in life: to travel through space, and back in time, and reach the solar system wherein mankind lived on Earth prior to civilization, and destroy it completely. You see an alien race was battling man in the distant future, and losing, and figured out the best way would be to use the stratagem explained. So T and his comrades did their thing, some failed, some didn’t, and their objective was achieved as they went out in a suicidal joy of achievement. The future changed utterly from that point forwards but somehow things didn’t work out so well for their creators, later, in the future time and distant place from which they embarked upon their mission.

When will I get to the point and what is it this time? After all this is supposed to be about trading in gold, or something connected to it, right? Well, the first point is this, Aldiss wrote one of the first stories about “timesliding” without which we would never have enjoyed Michael J Fox’s Marty and Christopher Lloyd’s Doc in Back To the Future many years later. And timesliding is somehow a fact of life for traders in financial markets every day of their lives, but little appreciated for what it is.

Let me explain:

The average person learns a fact or piece of knowledge, accepts it’s veracity, and files it away. All future events are interpreted in the light of the fact which is now a part of the framework for interpreting new situations from that point onwards.

Maybe you already begin to get a certain vibe about what happens when we are persuaded by misinformationists and propagandists to accept and internalize faulty facts which form into flawed frameworks to judge new situations, and how to react to them.

Anyway to get back to the timesliding subject one last time: to alter the past would alter the future flowing from that past, and the present and future would suddenly change into a different alternate future because of that intervention in the past. This would time/space to “slide” into a different time/space which was basically the same world but with a different history, and a future which was the one that favoured “the other guy”, though nobody would be aware that their lives had changed for the worse.

That was fiction - but this is very real:

George Orwell played with this concept by suggesting that the past could be simply re-written, and that was sufficient to change the present and future. And he certainly had a point. Edward Bernays made a living out of investigations into and promotion of the manipulation of peoples’ view of realities and society to create a new future which favoured the masters behind these manipulations.

Now let us look at life for market traders

First I would wish that half the readership do not switch off at this point saying something like “that doesn’t apply to me, I’m an investor not a trader” or something like that. This does apply to you very much as you will soon see. It matters not if you are a short term trader or a longer term trader, and embrace the word trader and stop pretending an investor is different.

So there I and you are in the market, imagine that we are both in a long position and believe that due to our differing criteria it is a bull market and we are going to sell at a higher price, that asset which we have already bought at or about the current price.

So imagine if you will, that you are long Ferrari and I am long Maserati which are stand along company common stocks just for our example. A news item hits the wires that Maserati has made a fantastic engineering breakthrough which will provide a significant advantage in the future. Let’s say nobody knew this already (!!!) and it was real fresh news (!!!!!) so the markets discount it. The price for Ferrari falls and that of Maserati rises. OK so far with this imaginary world?

But tomorrow, another fresh undiscounted news item emerges. This time it says that 5 years ago Maserati infringed upon a patent owned by Ferrari and Ferrari are taking their opposition to court over this for 10 years earnings with high likelihood to win. What happens, the reverse of the previous day. Maserati falls and Ferrari rises today.

This second event was different from the first, in that the event happened in the past. Moreover although it happened in the past it had no effect at all, until this very day, and then the future switched into a new future as if there was a timeslide.

Now how can a trader/investor prepare for this? They can't prepare! Nobody can. They must just get on and live with it. They accept the fresh news and look to the fresh expected outcome to create a fresh valuation of all assets concerned.

But what the trader does is different from the ordinary person in the street. The trader in an instant junked the previous known paradigm, substituted the new one instantly, and began to walk forwards into the future without hesitation. The average person wants to stick with their previous notion of how the world was, and evolve into the new world. But price does not wait. The revaluation of the asset is instantaneous upon discovery and receipt of the knowledge.

It's a good idea to get rid of the old fixed framework of interpretation of facts when faced with a new reality - faster than those around you.

So when you listen to the news there are a few questions that matter:

Is it discounted already (almost certainly was before you heard it!) ? Are there more people remaining, with unadjusted mindsets who will have to buy or sell to adjust their positions (who will drive the revaluation further than it’s already gone)?

Is this timeslide done and dusted already, or are there more ramifications to flow from it? If so, what do I do about that right now? What remains that is undiscounted by other players, and what will their actions still to be taken, buying, selling, do to the price? That decides the size of the price move still to come.

Argentus Maximus

The author posts daily commentary on the gold and silver markets in the TFMR forum: The Setup For The Big Trade. More information about the author & his work can be found here: RhythmNPrice.

About the Author


Mar 12, 2014 - 8:49am
Mar 11, 2014 - 10:44pm

Really Great Piece AM...

So you have taken us from the speed wobble to the time slide. Please let me know when the milachi crunch is coming!

Mr. Fix
Mar 11, 2014 - 6:46am
boomer sooner
Mar 11, 2014 - 1:58am

Hijack, Sorry AM

Just listened to an interview with our esteemed Oklahoma Congress Critter Lankford, Republican. He spoke how he was on the budget committee and helped reduce the US deficit down to $680B for fy 2013, I got steamed and sent a reply to the radio station about the BS he was spewing. Was going to C&P my reply, but my android tablet and phone will not let me, so I had to log in on desktop to RANT.

So apologies to everyone and just skip (grammar errors please over look, thanks)

I have figured out why last year Sec Jack Lew made it 3+ months on NO $$$. It was so these Republican a$$holes could campaign on shrinking the budget! They do not add the $320B Helo Ben printed the day after the signing of the new agreement.

About 2 weeks ago, I was at a stoplight where our local conservative radio station was interviewing Oklahoma Rep Tom Cole (my rep), Republican, and he said the same $680B deficit spending for fy 2013. The people in the cars next to me must have thought I was maddd, because I went NUTS, damn near splashed coffee all over the dash! Immediately tried calling in and got answered after the segment and put on hold. Talked to my dad a few days later and told him about Congo Cole's (he's a whitey btw) yak. His answer was "thats right, they did only spend us in debt $680B in fy 2013, heard Fox News saying that this morning", AHH $hit, brainwashed even my own father!

I had wondered why in Feb 2014 that Sec Lew said they could only make it 3 weeks or so, since last year they were able to fend off for 3 mos! especially with all the fresh 2014 tax slave revenue coming in.

Now for the aaaha moment. These jackwads have played EVERYONE! More slight of hand. Either that or I am just waking tfu (no I've been awake, $680B + $320B=$680B --- it does in Congress). See, they want the GP (general population) & media (talking heads) to swallow what they say, so they stall far enough to get past the due date so they can hoodwink the critical onlookers and punditry.

They, the R's & D's, ARE working together! I am beginning to think the Media is just a bunch of stooges and not necessarily in on IT, at least the voices of the media. The persons doing the interviews I listened to never even brought up Uncle Ben's Save in Mid October.

Turdville, please send me some links to the debt & budget stuff (yours are probably better than what I have saved). I am going on a mission this summer and fall to expose these 2 frauds, Cole and Lankford, for what they are. I am on the mailing list for Cole (even do work for his business partner) and plan to show up at more than one Town Hall Meeting. I want some copies of info to hand out to the Peeps. At this point I would take Harry Reid, at least I know he's going to dig a bigger hole.

Dangit, can't believe I gave money to these sumbitches!! Even Rand Paul got me for a few oz of AG not long ago. Will I ever learn.

Again, sorry for taking up space, just had to vent. Sorry AM, was not what I had planned earlier.

Mar 11, 2014 - 1:21am

Re: "Moms"

Not the quote I was looking for, but it works the same...

“Only one man in a thousand is a leader of men, the other 999 follow women” Groucho Marx

He's got a few more good ones here... (Who Knew?)

Mar 11, 2014 - 12:31am

What Congress? , what Senate? and...

PC Roberts:

"No greater threat to life on earth exists than the utter fools in Washington.

The American sheeple who belong in the streets more than people in any other country are content to suck their thumbs while "their" government destroys not merely their economic future but also the prospect for life for themselves and their progeny."

Mar 11, 2014 - 12:02am

So it goes

"most people are going to lose their wealth (nicely termed "investment dislocation") by staying in dollar denominated assets."

Very true. I am really not losing any sleep over those people though because most of them voted for the crap we are neck deep in and most of them believe the big lie....."all is well". The rest of them are naive to the point of overt stupidity. They are about to get what they thought they wanted. Unfortunately, the rest of us are about to get the same thing.

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Mar 10, 2014 - 10:53pm

Harvey's Up! (TFMR)

  • Mark O'Byrne: A new study has shown how the British pound has lost value massively in the last 40 years and how gold has again acted as hedge against inflation. The value of the pound has shrunk so rapidly over the last 40 years that a pound in 1973 is worth the equivalent of just nine pence today, the study by Lloyds Bank Private Banking has found. The study found £9.48 in 1973 would have the same spending power as £100 today. The rising cost of retail goods means someone who was a millionaire 40 years ago would need £10,553,000 today to enjoy the same spending power, according to Lloyds Bank, which analysed data from the Office for National Statistics. Everyday staples that we eat and consume now cost a huge amount more due to the massive 91% depreciation of the pound in the last 40 years. Therefore, gold had acted as a store of value and hedge against currency depreciation and inflation in the UK in the last 40 years, as it has done throughout recorded history.
  • Harvey: Gold and silver held quite nicely today despite the antics of the bankers who wish to bury both metals. Gold finished positively but silver was down slightly. The big news was again the escalation inside the Ukraine. I provided to you in chronological order, the big stories from Saturday til now. GLD Gold advanced by 7.5 tonnes whereas and stands at 812.70 tonnes. SLV: Silver remained constant at 10,164.74 tonnes. The GLD will be death knell of the bankers as China still requests its gold from the GLD and this gold heads to Shanghai through Switzerland. GOFO rates are now in the positive in all months with a slight decrease in negativity in all months. Media coverage of the study tended to focus on the fact that the average price of a pint of lager increased from 14p in 1973 to £2.87 in 2013. Little attention or coverage was given to the fact that gold has risen in value by more than beer, bread, apples, milk, sausages, butter, carrots, sugar, coffee, eggs, flour, diesel and even the beloved residential property in the form of the average detached house.
  • Harvey on Koos Jansen: In the week Feb 24/2014 through to Feb 28.2014: 49 metric tonnes were removed from the SGE and thus equal to Chinese demand. The total so far in this year is 418 tonnes. On a 7 day week, demand for gold equalled 7 tonnes per day or approximately what the world produces per day on a 7 day week. Koos Jansen also outlines the demand for gold from Citibank. Although the data is close, these guys got all messed up in their interpretation of data and one should totally ignore them. The only true correct data out there is by Koos Jansen:
  • Chris Powell : Hong Kong-based fund manager William Kaye today tells King World News that Ukraine today airlifted its gold reserves, 33 tons, to New York, presumably for vaulting at the Federal Reserve Bank of New York -- and probably not to be seen again any sooner than they'd be if the Russian army had marched into Kiev to "protect" the gold before it was flown off. Maybe the Ukrainian gold will constitute the New York Fed's next shipment to the German Bundesbank in Frankfurt in the great international game of golden musical chairs.
  • Chris Powell: John Embry laments the disinformation that passes for mainstream financial news reporting on the gold market. [B]DS: [/B] Embry thinks gold is the thing that people should be buying right now, because all of the other financial assets are seriously overvalued. Yet we get this lousy reporting that keeps people away from the gold market. GATA also reported on Eric Sprott's interview on Sprott Money News. Sprott commented on the lawsuits that are starting to be filed against the investment houses participating in the daily London gold fix.
  • Bill Holter: What does a suppressed gold price mean? It first and foremost means that the currency (itself) is over valued. It means that the currency "buys" more than it should. Another way of expressing this is that "inflation" is understated. In our fiat system, the currency is joined at the hip with "debt", Treasury debt. In reality, the way our monetary system works is that the only way to create "new dollars" is through the "creation" of new debt. Debt (in the aggregate) can never be paid off, nor can it's growth rate of creation ever be slowed or else the money supply itself will shrink. The money supply can never shrink because if it ever did then the debt itself would be defaulted on ...because of the lack of money to pay the debt service. The problem now is that interest rates can never ever rise in the future without bankrupting the Treasury because they could not afford to pay even the interest alone. It is from here that the value of everything else "financial" is derived from or "priced by" Treasury rates. If gold prices were not suppressed then from a macro standpoint this would mean that "wealth" would have built up slower, and asset prices would be lower than they are now. Low gold prices mean a currency valued "higher" than it otherwise would be, interest rates lower and "asset" values higher. This combination adds to the "standard of living" because the currency buys more, lower rates allow borrowers to "carry more" and higher asset prices allow for a larger collateral other words, everything that is needed to live "larger" than we should be living. If gold and silver prices are manipulated then it follows that the gold and silver already purchased is valued at less than what it should be. It also means that your past purchases were "subsidized" and that current purchases are also subsidized. It would also logically mean that your present currency (savings) are overvalued, your stocks, bonds and real estate are also overvalued. If these "assets" that you own are overvalued and you don't have any margin debt or loans against the assets then you will lose "value" but not be forced into a liquidation situation. If you do have debt against these types of assets you might be forced into liquidating the assets to settle your debts...assets that have or are declining (possibly overnight in a reset scenario) in value.
  • Tyler Durden: Plenty of excuses out there for this evening's colossal miss in Chinese exports (-18.1% YoY vs an expectation of a 7.5% rise) mainly based on timing issues over the Lunar New Year (but didn't the 45 economists who forecast this data know the dates before they forecast?) This is a 6-sigma miss and plunges China's trade balance to its biggest miss on record and 2nd largest deficit on record. Combining Jan and Feb data (i.e. smoothing over the holiday), exports are still down 1.6% YoY - not good for the much-heralded global recovery. Exports to the rest of the BRICs were all down over 20% but no there is no contagion from an emerging market crisis.
  • Tyler Durden on China: It would appear the fecal matter is starting to come into contact with the rotating object in China. Worrying headlines are beginning to mount on the back of real economic events (an actual default and a collapse in exports): Copper in Shanghai fell by the 5% daily limit to 46,670 yuan a ton while the Chinese yuan weakened 0.46% to 6.1564 vs u.s. dollar. The yuan dropped the most since 2008. Aside from that, Iron ore prices are crumbling, Asian stocks are dropping, Chinese corporate bond prices are falling at their fastest pace in almost 4 months, and all this as 7-day repo drops to one-year lows (as banks hoard liquidity).
  • Tyler Durden on Real Estate bubbles: Michael Lewis: "Real estate bubbles never end with soft landings. A bubble is inflated by nothing firmer than expectations. The moment people cease to believe that house prices will rise forever, they will notice what a terrible long term investment real estate has become and flee the market, and the market will crash." Amen! As they say, it is better to be wrong, wrong, wrong and then right than the other way around!
  • Harvey on Michael Snyder: A terrific article from Michael Snyder as he hypothesizes what may happen in this game of chicken between Putin and Obama. The game of chicken begins as follows:
  • 1. USA slaps sanctions on Russia
  • 2. Russia seizes assets of USA companies doing business in Russia
  • 3. USA seizes Russian assets of Russian companies doing business in USA/Russia repudiates debt to the USA and then starts dumping USA debt
  • 4. Sanctions escalate/USA asks Europe to also sanction Russia
  • 5. Russia cuts off gas to Europe
  • 6. USA puts troops in Western Ukraine
  • 7. Russia sells gas and oil for gold (or roubles)
  • 8. China, as an ally of Russia will try and help but they too will be hurt
  • 9. Iran also no doubt will come to Russia's aid and that is when things get out of control
  • 10. The USA petro dollar collapses
  • 11. Derivatives blow up held by the major banks
  • 12. Massive hyperinflation grips the globe.

All this and more on...

The Harvey Report!


Mar 10, 2014 - 10:19pm

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Key Economic Events Week of 9/21

9/21 8:00 ET Goon Kaplan
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9/21 Noon ET Goon Brainard
9/21 6:00 pm ET Goon Williams & Goon Bostic
9/22 10:30 ET Chief Goon Powell on Capitol Hill
9/22 Noon ET Goon Barkin
9/22 3:00 pm ET Goon Bostic again
9/23 9:00 ET Goon Mester
9/23 9:45 ET Markit flash PMIs for September
9/23 10:00 ET Chief Goon Powell on Capitol Hill
9/23 11:00 ET Goon Evans again
9/23 Noon ET Goon Rosengren
9/24 1:00 pm ET Goon Bostic #3
9/24 2:00 pm ET Goon Quarles
9/24 10:00 ET Chief Goon Powell on Capitol Hill
9/24 Noon ET Goon Bullard
9/24 1:00 pm ET Goon Barkin again & Goon Evans #3
9/24 2:00 pm ET Goon Bostic #4
9/25 8:30 ET Durable Goods
9/25 11:00 ET Goon Evans #4
9/25 3:00 pm ET Goon Williams again

Key Economic Events Week of 9/14

9/15 8:30 ET Empire State and Import Price Idx
9/15 9:15 ET Cap Ute and Ind Prod
9/16 8:30 ET Retail Sales
9/16 10:00 ET Business Inventories
9/16 2:00 ET FOMC Fedlines
9/16 2:30 ET Powell Presser
9/17 8:30 ET Philly Fed
9/18 8:30 ET Current Acct Deficit

Key Economic Events Week of 9/7

9/9 10:00 ET JOLTS job openings
9/10 8:30 ET Initial jobless claims
9/10 8:30 ET PPI
9/10 10:00 ET Wholesale Inventories
9/11 8:30 ET CPI
9/11 9:45 ET Core CPI

Key Economic Events Week of 8/31

9/1 9:45 ET Markit Manu Index
9/1 10:00 ET ISM Manu Index
9/1 10:00 ET Construction Spending
9/2 8:15 ET ADP employment
9/2 10:00 ET Goon Williams
9/2 10:00 ET Factory Orders
9/3 8:30 ET Initial jobless claims
9/3 8:30 ET Trade Deficit
9/3 12:30 ET Goon Evans
9/4 8:30 ET BLSBS

Key Economic Events Week of 8/24

8/24 8:30 ET Chicago Fed Idx
8/25 10:00 ET Consumer Confidence
8/26 8:30 ET Durable Goods
8/27 8:30 ET Q2 GDP 2nd guess
8/27 9:10 ET Chief Goon Powell Jackson Hole
8/28 8:30 ET Pers Inc and Consumer Spend
8/28 8:30 ET Core Inflation
8/28 9:45 ET Chicago PMI

Key Economic Events Week of 8/17

8/17 8:30 ET Empire State Manu Idx
8/17 Noon ET Goon Bostic
8/18 8:30 ET Housing Starts
8/19 2:00 pm ET July FOMC minutes
8/20 8:30 ET Jobless claims
8/20 8:30 ET Philly Fed
8/20 10:00 ET LEIII
8/21 9:45 ET Markit flash PMIs July

Key Economic Events Week of 8/10

8/10 10:00 ET Job openings
8/11 8:30 ET Producer Price Idx
8/12 8:30 ET Consumer Price Idx
8/13 8:30 ET Initial jobless claims
8/13 8:30 ET Import Price Idx
8/14 8:30 ET Retail Sales
8/14 8:30 ET Productivity & Unit Labor Costs
8/14 8:30 ET Cap Ute and Ind Prod
8/14 10:00 ET Business Inventories

Key Economic Events Week of 8/3

8/3 9:45 ET Markit Manu PMI July
8/3 10:00 ET ISM Manu PMI July
8/3 10:00 ET Construction Spending
8/4 10:00 ET Factory Orders
8/5 8:15 ET ADP employment July
8/5 9:45 ET Markit Service PMI
8/5 10:00 ET ISM Service PMI
8/6 8:30 ET Initial jobless claims
8/7 8:30 ET BLSBS for July
8/7 10:00 ET Wholesale Inventories

Key Economic Events Week of 7/27

7/27 8:30 ET Durable Goods
7/28 9:00 ET Case-Shiller home prices
7/29 8:30 ET Advance trade in goods
7/29 2:00 ET FOMC Fedlines
7/29 2:30 ET CGP presser
7/30 8:30 ET Q2 GDP first guess
7/31 8:30 ET Personal Income and Spending
7/31 8:30 ET Core inflation
7/31 9:45 ET Chicago PMI

Key Economic Events Week of 7/20

7/21 8:30 ET Chicago Fed
7/21 2:00 ET Senate vote on Judy Shelton
7/22 10:00 ET Existing home sales
7/23 8:30 ET Jobless claims
7/23 10:00 ET Leading Economic Indicators
7/24 9:45 ET Markit flash PMIs for July

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