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this morning was total BS. All the numbers were poor. Even of the 110K jobs, 174K were derived from the birth/death model adjustment Even the ISM's prices paid index showed a reading of 73 points, up from 65.5 in February and well above economist forecasts of 66. While the Euro is no solid alternative, this morning's trading pattern in currencies has the PPT's finger prints all over it.
The "plunge protection team" is a committee set up by the U.S. government to manage the markets to prevent "disinflation". It is made up of those who have the power and responsibility to manage America's money (Sec.Treasury,Fed Chairman,Rep of the President of the U.S.,etc.)The Japanese began to control their equity markets when they found themselves with over priced assets a decade and a half ago. At that time, the U.S. bundled the "savings and loan" debt into securities and sold the debt off and booked the losses. The Japanese had too much at stake with a handful of huge corporations at serious risk. They decided to "manage" a slow melt off of the excess fat (debt). This has resulted in an essentially flat to slightly declining economy and equity prices for the last 10-15 years. The American PPT is doing the same. It is supporting the markets to prevent a huge sell off (which most likely would have already occurred were it not for the PPT). Preventing this massive sell off has helped sustain real estate prices (imagine what a 2,000 point drop in the Dow would do to consumer confidence and the liquidity to support competition driven, thus artificially high, real estate prices in the U.S. BTW the Chinese government has anounced to the markets the intention of setting up such a mechanism to aid the Chinese securities markets.
"The financial markets are endlessly fascinating to study, but it is really not very often that we are blessed to witness extremes never before seen in history. Given markets' well-documented abhorrence of extremes and their ironclad tendencies to mean revert, extremes usually mark stellar trading opportunities.
In late March the venerable gold/oil ratio hit an all-time low, an abysmal 7.7. The math behind this revelation is simple, it just means that an ounce of gold now costs only 7.7x as much as a barrel of crude oil, each priced in dollars. From a speculation perspective however, this never-before-witnessed extreme has profound implications"
hmm... looks good. I'll give it a read. thx.
One thing about the oil/gold relationship though as their linkage is via inflation considerations is that oil is a leading factor but gold is a trailing symptom. Oil creates(not the only factor of course), gold follows out of resulting inflation fear. Historical charts show similar price moves for oil and gold because back then the market perceived the impact of oil to be more immediate on the inflation generation, hence a shorter time frame for gold to also track up out of the fear of negative interest rates. Today, oil accounts for a more diluted impact on inflation creation. PLUS with the lack of wage inflation, alot of pundits/analysts have been successfuly communicating (to date) that inflation has not been a problem. PLUS, hedonic adjustments to CPI calc has convinced most people inflation has not been a problem. The result of those 3 factors, amongst more not mention, is that the public as well as money managers, have not perceived a threat from negative interest rates and gold has not followed up with oil this time anywhere near as quickly as it did in the past. We will have gold move up in all currencies when there is realization by all that there is a much lower Fed rate ceiling that earlier thought, translating to a sustained risk of sustained real negative interest rates.
<< this morning's trading pattern in currencies has the PPT's finger prints all over it. >>
No kidding arnold. And the BoJ looks like they're right in there with the PPT. This is absolute crap.
Right on! The PPT (banks,media,insiders,and brokers)will do ANYTHING to keep this mkt levitating while pushing their private acct/fix SS plan. Meanwhile a still relatively strong dollar allows militarism and empire to be bankrolled via the printing press.These scams will last until market forces overwhelm manipulation (I hope to live that long).