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As
a reminder, today was the silver option expiration on the Comex.
The EU Summit meeting is on Thursday and Friday of this week, 28-29 June.
Next Wednesday is the US 4th of July holiday. I would expect many punters
would like to be leaving early this week if they can.
This is also the last week of the second quarter.
The US Supreme Court is expected to rule on Obamacare
on Thursday, overturning at least a portion of it. This may provide a
sellable rally.
Quite often the markets search for some level, and then try and let the
junior traders hold it in light volumes, unless something happens.
With algos running we sometimes get some interesting
intraday action but little in the way of progress.
This is a week that also brings some important metals events.
June
26 Comex July silver options expiry
June 26 Comex July copper options expiry
June 26 Comex July silver futures last trading day
June 27 Comex June gold futures last trading day
June 27 Comex June copper futures last trading day
June 27 Comex July miNY
silver futures last trading day
June 29 Comex July silver futures first notice day
June 29 Comex July copper futures first notice day
I
made an effort to describe a relatively simple model of the US banking system
briefly and in relatively common terms in an intraday commentary today. Back Again To Money: Money
Creation and the Banking System - A Forecast of Sorts
It is a 'barebones' version of the domestic money model I keep in my head, to
help incorporate new events and interpret them within some greater context.
It really is not so hard to do, if you put a little effort into it. I think
you might find it helps to understand some of the things that are happening
today.
The international money system adds a significant layer of complexity, but
one thing at a time. I plan to write something on that in the future.
Basically gold and to a somewhat lesser extent silver, are annoying rivals to
fiat money. In times of distress they are a haven for individuals in
protecting their wealth, and a threat to the status quo banking system
because they are fundamentally difficult to manage and to control since they
do not rely on a promise.
Bullion banks and trading desks, with the likely cooperation of the
government and the banking system itself, have created a leveraged paper
market that surrounds gold and silver bullion like a large, opaque cocoon,
many times the size of what is apparently owned itself.
At some point that reality will be revealed, and all hell will break loose as
various groups seek to grab bullion ownership as fast as they can. It will
make what happened at MF Global look like recess on the schoolyard.
This in a nutshell is the premise that GATA has put forward for some time,
and it makes sense based on everything that I have seen.
The world financial system has been slowly and surely changing since the
1990's. In keeping with that change, central banks have turned from net
sellers to net buyers of gold, particularly in the faster developing
economies, a fact that should not be ignored since it is very likely a sign
of things to come.
The international sovereign and banking debt crisis is hardly resolved, and
while it is interesting beyond the norm to someone like myself, it also
carries a tinge of concern, fear if you like, with
it, because the safekeeping of productive wealth is essential to modern life
with its predominant division of labor and production.
So we all strive to understand what is happening,
and look for the important events and sort them from the trivial, to
formulate our own responses to change as best we can. And it is not an easy
task because of the fog of confusion and misdirection that surrounds even
such a novelty as a currency war.
I told my son the other day that in my experience managing the disposition of
water and energy are the principal tasks in maintaining a home, in addition
to normal wear and tear, particularly of the childhood variety. It's always
something.
Similarly, the principal problem today in managing personal wealth, besides
obtaining it in the first place, is identifying and managing risk and return.
Thanks to the central banks, returns are hard to come by. So risk looms
larger, and mispriced counterparty risk in particular, because it can come
like a thief in the night.
"O
quam cito transit gloria
mundi."
"How quickly pass the glories of the world."
Thomas
à Kempis
Gold held closely is, in the recent
words of the regulators, a 'riskless asset.' I might add silver is as well,
although to a slightly lesser extent.
Proposed Bank Regulation Would
Drive Gold Prices Higher - WashingtonBlog
Draw your own conclusions from all that. Diversity of portfolio is an insurance against improbable events.
 
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