LESSONS FROM THE LONDON GOLD POOL - From Philip Judge

Though this article was written in 2001 - but the laws governing the Gold markets still have these underpinnings if we ignore the demand from East.

Source: Gold-eagle.com

As we examine 6000 years of monetary history, several very clear "Monetary Constants" seem to emerge. These very same constants have appeared throughout time and millennia, regardless of the empire, ruler or social structure of the day. While there are several, three of these constants are important to our journey into history today;

1. Money is the result of the function of the free market. As long as man has traded his goods and services in a market place, money (or a medium of exchange) has always emerged as a result of this free market process. Almost without exception, gold and silver have always appeared as the "free market money" of choice. No other form of money has functioned as well or as long as the precious metals. Gold, reserved for larger transactions and international trade, and silver, the money of everyday trade, have emerged naturally and not as the result of some government or ruler's decree.

Read rest of the article here.

China & Indian Stock market Historical Prices

Considering the charts - where would you want to put your money long term - India or China. My bet certainly would favor India.

Source: Sharelynx.com

Gold Charts - Historical Technical Take

Source: Sharelynx.com

 

“Standard” Credit Default Swaps on Greece Are a Sham and It’s Not a Surprise

Source: http://www.tavakolistructuredfinance.com

At least it’s not a surprise to any financial professional that has paid attention to the false reassurances that the International Swaps and Derivatives Association, Inc. (ISDA) has given over the years to naïve participants in the credit derivatives market.

“Customers” that accepted ISDA documentation when buying credit default protection on Greece are now discovering that ISDA defends the position that a 50% discount on Greek debt is “voluntary” and therefore not a credit event for credit default swap payment purposes according to its documents.

This makes the ISDA “standard” credit default swap (CDS) ineffective as a hedge for the widened

spreads (reduced price) of Greek debt, and it makes it ineffective as a protection against default using reasonable standards of impairment to define default. ISDA can defend ambiguous definitions so that payment on the credit default swap is virtually impossible.

Link to the report is here for rest of the article.

NIFTY EOD Technical Take



INDEX / ASSET	TF	STATUS	ACTION
BAJAJ	WEEKLY	TREND IS UP	ONLY LONGS
BAJAJ	DAILY	TREND IS UP BUT OVERBOUGHT	BOOK PROFIT IF MAKES LOWER LOWS
TATA MOTORS	WEEKLY	TREND IS UP	ONLY LONGS
TATA MOTORS	DAILY	TREND IS UP BUT OVERBOUGHT	STAY WITH LONGS
CRONIMET	WEEKLY	TREND IS UP	ONLY LONGS
CRONIMET	DAILY	TREND IS UP BUT OVERBOUGHT	STAY WITH LONGS
GOLD	WEEKLY	TREND IS UP	ONLY LONGS
GOLD	DAILY	TREND IS UP BUT OVERBOUGHT	WAIT FOR DIPS TO GO LONGS
NIFTY	WEEKLY	TREND IS UP	ONLY LONGS
NIFTY	DAILY	TREND IS UP BUT OVERBOUGHT	WAIT FOR DIPS TO GO LONGS

Technical Take in Various Assets Classes

My comments are in concise form at the end of the post in the form of a table.

I will presist until I succeed

Markets & Asset Classes - Short Note

The two charts above are self explantory. Month to date the performance of risk on trade has been better MoM by large amount. WTD - the risk on trade is building on its profits.

The news out of Europe was very specific in terms of numbers - ( €106B capital deficit, 50% haircut on Greek bonds, and leverage of the EFSF up to €1T). By the looks of it market likes it for the time being and the money that was on sidelines would be itching to get in if not already in.

The US markets are overbought at the moment but the price momentum seemingly is large and we may see further gains in the market.

Gold as suggested by a post earlier has probably made a double bottom and now looks to ride the gains well into the financial year end since these are seasonally favorable times for yellow metal as well.

From Liar's Poker - Michael Lewis

The second pattern to Alexander's thought was that in the event of a major dislocation, such as a stock market crash, a natural disaster, the breakdown of OPEC's production agreements, he would look away from the initial focus of investor interest and seek secondary and tertiary effects.

Remember Chernobyl? When news broke that the Soviet nuclear reactor had exploded, Alexander called. Only minutes before, confirmation of the disaster had blipped across our Quotron machines, yet Alexander had already bought the equivalent of two supertankers of crude oil. The focus of investor attention was on the New York Stock Exchange, he said. In particular it was on any company involved in nuclear power. The stocks of those companies were plummeting. Never mind that, he said. He had just purchased, on behalf of his clients, oil futures. Instantly in his mind less supply of nuclear power equaled more demand for oil, and he was right. His investors made a large killing. Mine made a small killing.

Monthly Charts of Asian Markets by Colin Twiggs

Monthly Charts - Link to the post.

Reading the monthly charts is the key to big institutional money. So study them, observe them and follow them.

Jim Grants Interview on Inflation

Jim Grants Interview.

Some Truisms...

Best of all, he gave us a rule of thumb about information in the markets that I later found useful: "Those who say don't know, and those who know don't say."

Source: Liar's Poker, Michael Lewis

Gold and Its Role in Our Society

http://bmgbullion.com/doc_bin/10.6.11_Gold%20is%20Not%20in%20a%20Bubble_ResourceWorld.pdf

Another must read for gold investors and lovers.

Something transformational is happening in Mongolia

Currency is the mirror of the economy... Something transformational is happening in Mongolia.

China oil demand at lowest for the year: Platts

Read the article here.

This means a slowdown --- lets see for how long and how bad.  

Fed's Fisher: U.S. issue is joblessness, not inflation

Read the article here.

If this is the path US central bank wants to be on -- that means further QE's, means further debasement of USD, means further exporting inflation to other currencies, means further inflationary pressures in emerging world.... It has its own set of consequence for asset classes.  

Vatican Calls for World Central Bank

Vatican has given a call for a world central bank...

Read the article here....

The issues at heart at the moment are not being addressed. Having a global central bank is not the solution, they know it as well. The question remains why are they staying this path.... Is it to concentrate and remain in power since banking is the supreme material power on earth....

The problem with government inflation measures

Source: Goldmoney.com

2011-OCT-23

Central banks claim to be concerned about inflation. Even more, some have committed to maintaining price stability in their own statutes, at the highest constitutional level. As inflation depends ultimately on money growth, it is not surprising at all that central banks care about inflation. In fact, persistent inflation will hit on the purchasing power of money, and thus will deteriorate its main functions as universal means of payments, store of value and unit of account. However, do central banks really target price stability? The answer depends, among other questions, on how we measure a blurred and disputed concept such as inflation. Apparently, this exercise is easy and straightforward. This assumption is ill-founded, and it has severe and undesirable consequences on how monetary policy is conducted.

Read rest of the article here.

Fed’s Yellen: QE3 May Be Warranted

By Scott Lanman and Jennifer Oldham - Oct 22, 2011 3:22 AM GMT+0530

Federal Reserve Vice Chairman Janet Yellen said a third round of large-scale securities purchases might become warranted if necessary to boost a U.S. economy challenged by unemployment and financial turmoil.

The central bank should also give “careful consideration” to Chicago Fed President Charles Evans’s proposal to tie the near-zero interest-rate pledge to specific levels of unemployment and inflation, Yellen said today in a speech in Denver. Read rest of the article here.

The single currency is close to collapse

With Europe on the brink of a disaster, the euro must be reconstituted as an entity based on economic reality, not ideological folly.

Crisis: the Franco-German partnership which lies at the heart of the European project is fracturing as never before Photo: AFP

By Telegraph View

7:49PM BST 21 Oct 2011

140 Comments

Yet again, Europe stands on the brink of abject disaster, apparently unable to resolve its differences. A monetary union that was meant to bring former enemies together, binding them to each other via irreversible economic integration, is succeeding only in tearing them apart. It is a crisis that this newspaper has consistently warned of since the single currency’s creation; it gives no pleasure to see our predictions come true. Read rest of the article here.

The companies that control the world’s wealth - What Say...Systemic Risks?

The companies that control the world’s wealth

Yahoo!7 Finance, On Thursday 20 October 2011, 11:38 EST

As protests against corporate greed spread around the world, a study out of Zurich University may have confirmed the protestors' worst fears.

A trio of complex system theorists at the Swiss Federal Institute of Technology, claim that a select group of global bankers own a large chunk of the global economy.

The study found that of the 43,060 transnational corporations (TNCS) in existence, a group of 1,318 companies formed the heart of the world's financial system. (More From Yahoo!7 Finance: The Faces of Occupy Wall Street)

This group could further be distilled to a core group of 147 companies which controlled 40 per cent of the wealth. The core group was dubbed the 'super entity' by the researchers and was largely made up from corporate banks like Barclays and Goldman Sachs. Read rest of the article here.

Gold & Silver Possibly Bottoming Out With Lesser Momentum to The Downside

The Effects of the Great Recession on Central Bank Doctrine and Practice

As long as Ben is the chairman - it pays to keep a track of what he is saying and where does he want to go...

Chairman Ben S. Bernanke

At the Federal Reserve Bank of Boston 56th Economic Conference, Boston, Massachusetts

October 18, 2011

The Effects of the Great Recession on Central Bank Doctrine and Practice

The financial crisis of 2008 and 2009, together with the associated deep recession, was a historic event--historic in the sense that its severity and economic consequences were enormous, but also in the sense that, as the papers at this conference document, the crisis seems certain to have profound and long-lasting effects on our economy, our society, and our politics. More subtle, but of possibly great importance in the long run, will be the effects of the crisis on intellectual frameworks, including the ways in which economists analyze macroeconomic and financial phenomena.  Read rest of the article here.

There is always a bull market somewhere...

Tracking the Great Canadian Real Estate Bubble

Apparently Vancouver has now tagged Toronto “it” in the Great Canadian Real Estate Bubble. While the former is decelerating from absurd to only insane price gains year-over-year, the latter is hanging in at absurd, thus threatening Vancouver’s bubble price-gain lead.

Read rest of the article here.

Chanos: China’s hard-landing has already begun

Hedge Funds Archives | Email alerts

Oct. 17, 2011, 10:21 p.m. EDT

China’s bust will be a thousand times worse than Dubai

 

 

 

 

 

By Sue Chang, MarketWatch

NEW YORK (MarketWatch) — China is heading into an economic storm, and the much-feared hard-landing of the world’s second-largest economy has already started, warned celebrated hedge-fund manager and China-bear Jim Chanos of Kynikos Associates on Monday.

“The numbers are falling faster than we thought,” said Chanos during an exclusive interview with MarketWatch on the sidelines of the 7th Annual New York Value Investing Congress.

Click to Play

Tips for an extended bear market

History shows that periods of high returns in the market are followed by extended periods of lower returns, says Capital Guardian Wealth Management's Tony Montanari.

“Real estate sales in September and October, which are peak months, fell 40%-60% on-year,” he said.
Chanos also pointed out that Chinese financial and real-estate stocks are down 30% from their peak, while cement and steel prices are declining.
“People are buying into the idea of perpetual growth,” Chanos said. “But they have to ask, ‘Are you really growing?’” Read rest of the article here.

Chanos on China and Other Subjects...

Next Few Years....

Just few thoughts on the markets and economy for next few years across the world.... The problems would remain in developed and emerging world... Though different the cause is the same---- dying monetary system....

Consider --- we are in times when the monetary system of not just one country but the whole world is dying a death... This process would fasten exponentially as we reach the end of the monetary system... The speed would increase the flow and instance of changes of direction of capital flows of the world due to frequent and large government interventions... The infrastructures of society and commerce as we know them will cease to work on some days because governments have not prepared for the same... This all would result in huge volatility across the asset classes throughout the world.... Hence what would be your preference in this scenario --- wealth preservation or risk taking....

Fortunes Once Made Need to be Kept...

Not every person manifested on this earth has the opportunity of being given a silver spoon in the mouth. Some strive to create one - some of these would create and others would fail... And some dont even try -- not even in spiritual sense --- not just in materialistic manners.

Fortunes once made have to be maintained and thats the difficult part... Knowledge is essential for creating one and passing on that knowledge is essential to maintain one.

Even if one has decided not to pursue the path of creating the fortune.... that does not make one inferior to the one persuing but then there should be a magnificient calmness about the decision not to be disturbed by others reactions to your karma....

COT Reports for Currencies & SP500

Big smart money was already out of the most of the long positions before Swiss Central Bank fired its Bazooka. They are short Euro though, but have reduced their short positions in last few days. 

They have reduced their short positions in SP500 as well. Its to be seen if they are going long for the year end rally and if they would conform to the Bradely timing. 

What Does COT Report Tell You About Gold & Silver

COT reports for both suggest that the market is less frothy than it was in last year. Essentially that means that most of the selling is done and now only prices have to technically heal themselves and will move higher when the steam builds up and long pile up again. 

We are approaching the end of monetary system in Indian Rupees as well...

gold price charts provided by goldprice.org

gold price charts provided by goldprice.org

silver price charts provided by silverprice.org
silver price charts provided by silverprice.org
gold price charts provided by goldprice.org
gold price charts provided by goldprice.org

Some charts on Nifty & Scrips

Nifty is at the resistance line. Hence Monday price action becomes critical. Though volume has been on the decline in this upmove. The trend of lower low and lower highs has been broken though the friday was a bullish engulfing pattern. We will wait for price action on Monday to show us the way.



According to the Bradley model we might have see the top for the month. But we need the prices to confirm. We would not jump the gun in predicting the prices. 

Arvind looks like a candidate where one can take longs.