Jawboning Fed Goons

Tue, Jun 23, 2015 - 11:19am

The LIES, SPIN and MOPE are thick this morning as a random Fed Goon reports that "rates will soon be rising 1% per year if the economy continues to grow". Uh-huh. Just like the old adage, "if my aunt had nuts she'd be my uncle".

This kind of stuff just cracks me up...and the "market" gobbles it up as Gospel truth because it comes from the omnipotent Fed. As a reminder, the US currently has trillions in existing debt that is being serviced at the shortest maturities with the lowest possible rates so as to minimize the line item "interest on the national debt". If The Goon's forecast was to play out, the "interest on the national debt" would triple or more from around $400B/year to more than $1T/year.

ZH had a great headline summary of the Goonspeak. Let's take them one by one, shall we?

  • POWELL: TEST TO RAISE RATES COULD BE SATISFIED AS SOON AS SEPT. -- yep, I suppose that's true if God Himself comes down and starts shopping at Walmart
  • POWELL SAYS HIS FORECAST CALLS FOR RATE RISES IN SEPT., DEC. -- Attaboy. Good for him and his cute little forecast
  • POWELL: FED AND MARKETS ARE GETTING INTO CLOSER ALIGNMENT -- there's a stunner...the Fed IS the market
  • POWELL: DOLLAR IS STRONG BECAUSE U.S. ECONOMY IS STRONG -- this shows either his abject stupidity or outright lies. Anyone with a brain knows that the Pig is only stronger due to ongoing, massive QE in Japan and Europe.
  • POWELL: THERE'S RISK UNEMPLOYMENT MAY FALL FASTER THAN FORECAST -- as more participants just give up and quit looking, the LFPR drops to fresh 40-year lows and drags the unemployment rate even lower. Classic Goon speak. Gosh how I despise these people.
  • POWELL SAYS HE DOESN'T SEE A BUILD-UP OF AN ASSET BUBBLE -- by staying in his ivory tower his entire life, he obviously failed to notice all of the past Fed-inflated bubbles
  • POWELL SAYS HE'S NOT PARTICULARLY TROUBLED BY EQUITY VALUATIONS -- nope, not Goon Powell. All looks fine to this clown. Record high valuations be damned

Not surprisingly, the headline-chasing HFT algos have picked up this mountain of BS and run with it. At one point earlier, the POSX was up nearly a point and a half and, of course, this is all due to "the strong US economy" according to Goon Powell. The Pig is still up a point as I type which means the euro is just getting smoked. See below:

The yen is down, too, but still within the range we've been watching:

And, of course, having the yen down explains why gold is down (yen in candles, gold in bars):

Meh, whatever. None of this affects my conviction that the next sharp move in the metals is UP, not down. Today's action only exacerbates the extreme nature of the Spec shorting, particularly in silver. Just yesterday, we saw another ATH in Comex silver open interest and there's no doubt in my mind that today will bring another. PLEASE keep in mind that the last time we "predicted" a short squeeze was April 15 and the actual squeezing didn't begin until April 24. Just remain patient. Have another look at the chart below. Whether you start the trendline on March 17 or 18, price is still near the line and very likely presenting an opportunity at this very second to anyone willing to gamble in The Casino or add some physical.

And in gold, look at the complete inability to break price down below 75-1180 over the past two months. I suspect more of the same here and...I CAN'T STRESS THIS STRONGLY ENOUGH...major declines DO NOT begin from a CoT structure like the one we have at present. Therefore carpe diem, mon frere.

Just a few links this morning. I found this at ZH in the "contributor" bar. Pretty interesting stuff with some rather intriguing charts: https://www.zerohedge.com/news/2015-06-22/container-shipping-rates-china...

More terrible news of out Eastern Europe: https://news.yahoo.com/us-pre-position-heavy-weapons-along-natos-eastern...

And, as we've considered the audacity of the Fed Goonspeak today, this new post from Denver Dave is invaluable: https://investmentresearchdynamics.com/new-home-sales-for-may-statistica...

Have a great day. More later,


About the Author

turd [at] tfmetalsreport [dot] com ()


4 oz
Jun 23, 2015 - 11:20am

A Bull Market~~~

Got lots of Johnny Reb in me.....Family history shows many on the confederate side, but there were several in Union Blue too.

Have really been tickled to learn so much family history in the last decade or so; Have the advent of the Internet to thank for that---and all the cousin-ality that has come with it!

Anyway.... IF I was a merchant...I'd be thinking the time is ripe to have lots of 'Stars & Bars' around...and marked up substantially...thinking a bull market for this baby is at the door step.

gold slut
Jun 23, 2015 - 11:22am

Twice in a lifetime!


Edit: Story of my life - second

Jun 23, 2015 - 11:23am


good article


Mr. Fix
Jun 23, 2015 - 11:30am


Marchas45 left his spot wide open, what was I to do?

Jun 23, 2015 - 11:36am

My sincere thanks to you Craig

I just want to extend my sincere thanks to you Craig for your calm and reassuring synopsis of today's market events, it is a massive help in this world of misinformation - thank you my friend!

Jun 23, 2015 - 11:46am


Maori for 6

Jun 23, 2015 - 11:48am

Facebook worth more than Walmart


Not that I'd buy stock in Walmart, but these numbers are crazy.

The combined market cap of ALL 16 components of the HUI is $76.67 billion today. For the price of Facebook ($245 billion), you could buy the entire HUI 3 times over and still have cash left over.

Jun 23, 2015 - 11:54am

I love..

How much stake people put in the COT when we know nearly all the COT data is fudged and by David Morgans own admission most of the positions are taken outside the reported structure the COT provides anyway.

The fact the correlations with the COT structure never seem to materialize leads me to further agree with Morgans position that it doesn't mean what it once did.

I have sat here for 9 months now warning people that the further the Euro drops the worse off gold will be in dollars. Now here we are the Euro and Gold are both down almost 2% this week... Coincidence? Not at all. Were long past the point of any part of reality mattering so if no one wants to do anything about it here we are...

Again... Lower Euro = Lower Gold in USD its really that simple folks and the longer this mess with Europe plays out the lower the POG is going to go.

Accept it, embrace it! I haven't bought any metal in exactly a year now and I'm now sitting with dollars that have surged in value over the last 12 months and will likely continue to surge as Europe falls apart. When everything blows up this fall gold will finally bottom and that will be the time to go all in and stress yourself out about price. Everything until the general market washout is just more kabuki theatre, including the CoT.

Forgot About the price. Get out of the house and go do something.

Jun 23, 2015 - 12:01pm


Maybe I am wrong, but Facebook doesn't manufacture anything or produce anything. Don't they just sell ads? So if I have some kind of business and because of a declining economy, massive unemployment, no regulation of markets and a falling balance sheet; aren't I going to kick my ad on Facebook to the street knowing those people using it have no jobs or income to buy my product.

At least Walmart sells a bunch of Chinese junk and local produce. People will take their food stamps to Walmart, but they can't buy stuff off Facebook ads.

This just might be funny accounting principles.

Jun 23, 2015 - 12:04pm

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