More Trouble for Chief Goon Powell

Time is running out for CGP and his rate hike scheme.

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Wed, Nov 28, 2018 - 9:56am

We wrote two weeks ago about CGP painting himself into a corner. That corner got even tighter today and it will soon close, leaving him with zero remaining options.

It's coming at CGP from multiple directions today. First, Trump in all his glory, pounded away in an interview posted late yesterday. Click the link and see how Trump states that he's "very unhappy" with CGP and his Fed. Hilariously, he also states that he thought Mother was "too short" for the job! https://www.washingtonpost.com/politics/trump-slams-fed-chair-questions-...

But the economic news for CGP was just as bad today. The US economy is clearly slowing and the inflation boogeyman that he claims to be fighting is shrinking away. So, other than enriching his owner banks through higher rates, what justification does CGP have left for his rate hike scheme?

So can you see how this is all coming together for us in Q1 and all of 2019. Once we get through the December FOMC, it will become abundantly clear that The Fed will NOT be hiking four times next year...in fact, they may not be able to do it more than once! As this reality sets in, Comex precious metal prices will turn and we'll be on course for a MUCH better year than 2018. Rates will tumble, not soar. The POSX will fall, not rise. And CB balance sheets will grow, not shrink.

But, again, don't expect this to all of a sudden manifest itself on Thursday. Turning the battleship of sentiment and expectation is going to come slowly. Even in 2016, when the first half of the the year saw gains of 30% in CDG and 50% in CDS, the event unfolded slowly at first. Price jumped out of the Dec15 FOMC and then ground higher through January. So we're likely going to need to remain patient and watch for dips to trade/buy.

Also complicating the matter is the persistent "peg" of CDG and the yuan. All of this potentially bullish news for Comex gold today and yet price has barely budged. Why? Because all of the concern regarding The Trade War and this weekend's G-20 has kept the CNY in check and, thus, Comex gold, too.

We'll need to watch for a resolution of this trade war stuff in Q1 or sooner. Once that's behind us...and my hope is that Trump will be willing to negotiate given the weakening US economy...perhaps the pair will decouple and CDG will get back to trading more traditional drivers.

In other news...

The situation in Ukraine continues to grow more confusing and concerning. Here are a couple of links you should be sure to see:

This new post from SRSrocco is worth reviewing: https://srsroccoreport.com/investment-demand-still-the-largest-growth-se...

And yesterday's open interest numbers are in and total Comex gold OI fell by another 8,000 contracts. This brings the drop over the just the past three days to more than 67,000 contracts or about 13%. That's nearly 280 METRIC TONNES of digital gold obligations that have simply disappeared and closed out by The Banks.

Again, what SHAM this all is. Nowhere was any actual physical gold ever exchanged and thus valued/priced. Instead, trading of this make believe "gold exposure" is what determines the physical price, and this gold exposure can be created and destroyed through a few, simple keystrokes by the market-making Comex bullion banks! In yesterday's podcast, I forgot to include the link to the Econ 101 post that we wrote in 2017. Here it is again in case you need a refresher of how this all works and why it such a crime/sham/scam versus how other "markets" operate: https://www.tfmetalsreport.com/blog/8252/econ-101-silver-market-manipula...

OK, so now it's time to stop and get this posted. The moving truck has arrived and MamaFerg needs me to supervise and assist. It's going to be a long day and it will likely be late evening before I can make it back to Turdfork. If I can get back early enough, then I'll attempt to record a quick podcast. If not, then this will be the only post of the day. Regardless, regular TFMR service will resume tomorrow...provided I don't end up hospitalized with back spasms!

Have a great day!

TF

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Key Economic Events Week of 7/26

7/27 8:30 ET Durable Goods
7/27 9:00 ET Case-Shiller home prices
7/27 10:00 ET Consumer Confidence
7/28 2:00 ET FOMC Fedlines
7/28 2:30 ET CGP presser
7/29 8:30 ET Q2 GDP first guess
7/30 8:30 ET Personal Income and Spending
7/30 8:30 ET Core Inflation
7/30 9:45 ET Chicago PMI
7/30 10:00 ET UMich Consumer Sentiment

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