U.S. Fiscal Position

A simple but devastating overarching explanation for recent tightening in U.S. short-term liquidity focuses less on the consensus angle of “insufficient bank reserves,” and more on the interesting twist of an “excess of collaterals.” While these phrases might at first sound like mirror images, it is their direction and slope which truly matter. Indeed, a growing number of prominent investors are postulating that an inflection point may have been reached in mid-September at which the Treasury is simply issuing more paper than can be financed by existing liquidity channels!

Figure 5a: U.S. National Debt (2012-11/1/19) Figure 5b: Net Foreign Purchases of U.S. Treasuries

[United States Treasury] (Trailing 12 Months) (1993-8/31/19) [Meridian Macro]

As shown in Figure 5a, above left, the U.S. national debt first surpassed $23 trillion on 10/31/19, having surged a mind-boggling $982 billion in the three months since Congress lifted the most recent debt ceiling on 8/1/19. During the past 12 months, U.S. national debt has now jumped $1.3 trillion, necessitating $1.2 trillion in Treasury issuance. Unfortunately, as shown in Figure 5b, above right, trailing 12-month net foreign purchases of Treasuries (through 8/31/19) have once again collapsed into negative territory.

Ironically, the debate about whether recent Fed asset purchases constitute QE could soon be supplanted by a more eye-opening discussion as to whether they constitute outright monetization of runaway federal deficits

GUSH also includes natural gas which has a five day island reversal top.

“For those who have at times struggled to understand the difference between COMEX inventory categories ‘registered gold’ and ‘eligible gold’, now your head can spin even more, since the CME’s COMEX has just introduced a new category – ‘pledged gold’.

This pledged category was first noticed on the infamous COMEX warehouse late last week by Nick Laird of fame, with the pledged gold column intriguing populated with an entry next to the New York vault of bullion bank, HSBC. What did this pledged column entry mean, we wondered, and where did it come from?

https://jessescrossroadscafe.blogspot.com/

https://youtu.be/wTkrojOo6z0

Sounds pretty good for a week or two … and then I’d start to go crazy! (crazier) 🙂

That next USA financial downturn, which could be only a $100B of deficit spending away, is going to go exponentially south once it arrives.

But at least alone , I wouldn’t have to deal with nasty neighbors .

Au plus 0.5 %, Ag plus over 1 % on day….PM shares gap higher on open, trade higher and then the scum close them on the days lows….go figure.

There is only ONE ‘Pagan”.    Pagan Island is a small volcano island at the north end of the Northern Marianas.  Because of frequent lava flows covering most of the island, it is no longer occupied EXCEPT for one sole inhabitant  that maintains a small residence at the shore on the bay.  This inhabitant maintains the land claim for the Northern Marianas.  He is visited regularly by the US Coast Guard who maintains the light beacon and navigation aids in the area.  The sole Pagan inhabitant is a volunteer post that is changed from time to time.

So…. Now that you know the rest of the story, do you still want to be a Pagan?  It’s a lonely job.  🙂

If the GSR is defining the bullish / bearish impulses in the move, where it declined 15 weeks starting the beginning of July up until mid October (15 weeks), then we should see weakness for the next 4 weeks minimum (6 weeks total – 38% time retrace), bringing us to the end of tax loss selling in mid-December.

The GSR should not exceed 90 on a weekly closing basis if this assessment is correct.

My two cents.

Consequence of TDS , and today’s circus in DC .

getting a nice little mid-afternoon pop.  i don’t know what’s causing it, but i don’t need to know to like it.

No more rate cuts. This is just an “adjustment”. NO SOUP FOR YOU!!!

“The big hedge fund managers are probably puppets of the central planners”

Yes this is the case with some bank owned/controlled firms, but not all. And while the banks could be playing both sides of the markets for perceptual purposes, it doesn’t matter as long as they control prices.

I don’t give a shit how it happens. I just want a free moving PM markets that trade on fundamentals.

This horseshit is for the birds.

I think it’s coming because god (nature) will win in the end.

I just hope it comes before I’m 80 and Road Warrior conditions don’t prevail.

Do we become full blown commi’s in the meantime?

Who knows.

Cheers

Leeches , borrowers and spenders are rewarded ,

I have to assume the central planners feel responsible for the public greater good, and to make sure there are important products available, and at the cheapest possible price.

Re your, “Again, the culprits who matter are the big hedge fund managers playing the derivatives / futures.”

The big hedge fund managers are probably puppets of the central planners, that do as they are told with a phone call. Didn’t we all decide long ago JP  Morgan Chase and Goldman Sachs were involved? Basically, commodity producers are generally screwed. Farmers too. Only occasionally do they get a happy run-up in prices, then they invest in more capacity, and down goes their price again. They can’t win.

Even if you are a machinist, or own a machine shop, your “widget” business is too competitive and not very lucrative. You don’t get any gov’t support.  If you build houses? You do. Low interest rates and tax breaks on interest and taxes paid. Plus they don’t import houses from China YET. 🙂

If you are a saver? Same thing, no gov’t support. F/U too. Zero interest.

The bottom line: Savers and Producers are screwed for the greater good. Borrowers and spenders are rewarded.

Nope ,

Astute !

I know. The assholes in NY got the grains on lock down too.

We could all be starving next year and the prices will not be allowed to rise.

Don’t know how it ends but it won’t be good.

Cheers

I’m grokkng on that … with crossed fingers!

“crossed fingers” Does that make me some kind of pagan? 🙂

https://finance.yahoo.com/news/premier-gold-mines-reports-q3-110000070.html

… Never again below $1400

Just as we will never see $20 gold , $35 gold , $250 gold , or Viva $500 gold , ever again .

I hope we never see $1400 again !
‘Hope’ being the operative word there .

Love the whistle blower with a bag over his head.

Is gold going lower than $1400 in the next few months?

No (74%, 32 Votes)

Don’t ask me I don’t have a clue! (16%, 7 Votes)

Yes (9%, 4 Votes)

Total Voters: 43