In an interview today
with King World News, Hinde Capital CEO Ben Davies
cites as a likely contrarian indicator a story published this week on the
front page of the Financial Times noting the collapse of market volatility.
The FT story, whose first two paragraphs are appended, said the decline of
market volatility is a matter of suppression of interest rates by central
banks and acknowledged that this is a consequence of their
"intervention."
While acknowledging
"intervention" by central banks is unusual for the FT, this
acknowledgment is terribly understated and implies that interest rate
suppression is the extent of it. But what good would interest rate
suppression do central banks if it came at the expense of the collapse of
their currencies, or at least resulted in more devaluation than they wanted
at the moment?
And what has become of
the historic inverse relationship of real interest rates and the gold price,
a relationship in which, when real interest rates go down, gold is supposed
to go up?:
http://www.gata.org/node/1373
In a free market, when
real and even nominal interest rates go negative, as they have
been going lately, shouldn't gold be going to the moon?
Extensive proof of longstanding and current
surreptitious intervention by central banks in the gold market has been
compiled by GATA here --
http://www.gata.org/taxonomy/term/21
-- and
it has been delivered to the FT many times, sometimes in person. But the
newspaper has been unable to put "intervention" and "gold"
in the same sentence in a news report or to put even one question about gold
market intervention to a single central bank.
If the FT could ever do
that much, its story this week about the death of volatility might become
almost instantly the contrarian indicator Davies suspects it will
become, even as the FT thereby in effect would be repudiating years of its
own misleading journalism.
Davies' interview with
KWN, accompanied by an image of the FT front page carrying the volatility
story, is posted here:
http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2014/6/12_Wi...
