The liquidity, currency, debt default, economic collapse and the sideways gold market by Bill Downey

INTRA-DAY NEWSLETTER ~ May 7 2015

Our discussions over the past two years = Liquidity Crisis coming, Debt Default coming, Currency crisis coming, global economic collapse coming………..
Perhaps we should change the word coming to “arriving” or perhaps “here".”

First the liquidity Crisis……………….

Saved By The Broken Euronext: Manic-Selling Becomes Panic-Buying In Global Bond, Stock Markets
Submitted by Tyler Durden on 05/07/2015

Overnight "manic-selling" in global bond markets (and turmoil in stock markets) has been met - suddenly - this morning by "panic-buying" as mysteriously liquid buyers lift stocks back into the green and send bond yields plunging (right after Euronext breaks)... As one trader noted, the market is in a mode of “high volatility with no dealer liquidity and easy excuses."

Did The World's Central Banks Hit The Panic Button This Morning?
Submitted by Tyler Durden on 05/07/2015

If there is one thing more worrisome for the world's central planners than a stock sell-off, it is a bond rout 'proving' that they have lost control. The overnight carnage across global bond markets appears to have triggered someone (or someone’s) to step in - in dramatic size - to rescue bonds and save the world once again.

On to the Debt Default situation ……………..

Greek FinMin Says "Grexit Not An Issue;" Germans Not Hopeful On Deal For "Bottomless Pit"
Submitted by Tyler Durden on 05/07/2015

Greek FinMin Varoufakis and German FinMin Schaeuble are cross-talking again this morning:

*GREECE'S VAROUFAKIS SAYS 'GREXIT' IS 'NOT AN ISSUE' (well the market & ECB thinks it is)

*SCHAEUBLE SAYS EXPECTATIONS FOR EUROGROUP MEETING NOT VERY HIGH (oh ok)

As next week's meeting and deadlines loom, hope is running high today in Greece... even though Schaeuble warns "don't expect spectacular Eurogroup results."And lastly today…………the global economic collapse update.

And now the global economic collapse..........

US Macro Data Has Never Collapsed This Fast
Submitted by Tyler Durden on 05/07/2015

Since the end of QE3 (and the end of the government's fiscal year), US macroeconomic data has disappointed and weakened on an unprecedented scale. With April data not showing the post-weather bounce that every sell-side economist is hoping for, the absolute level of macro weakness was only marginally weaker in the past in the aftermath of the Lehman crisis.

Despite Biggest Spike In Job Cuts Since 2011, Jobless Claims Hover At 15-Year Lows
Submitted by Tyler Durden on 05/07/2015

Initial jobless claims rose very modestly from last week's 15-year low levels and hovers at a stunning 262k - indicating everything is as awesome as it can possibly be. Which is odd... because as Challenger-Gray notes, April saw the biggest rise in job cuts since 2011 (and the worst YoY increase for April in at least a decade). Job cuts were concentrated in the energy sector on an unprecedented scale.

Now before you go thinking that Capitalism is collapsing……………..think again. ITS SOCIALISM THAT HAS BEEN COLLAPSING. And that is leading to to fascism or even totalitarianism.

Deutsche Bank's Head Of Global Credit Strategy Explains Why "This Is Not Capitalism"
Submitted by Tyler Durden on 05/07/2015

"... part of the problem today is that over the last 15-20 years, capitalism has been propped up every time it’s about to go through one of the cyclical creative destruction phases. Compounded up that's left us with a big mess to clear up across the globe and a lot of sub optimal resource allocation. So across a lot of the Western World we're left with too much debt, too much inequality, low real wage growth, limited conventional tools to help the economy to de-lever, QE and ZIRP and a political backlash against the mainstream."

(Our thanks to www.zerohedge.com for the news headlines)

Gold Chart

The downtrend channel and the uptrend channel are getting close to meeting on the short term chart. As you can see price is in the middle and a break either way is about to develop. There’s a support band of 1172-1182 where the yearly opening price range resides. Technical Support is the 1158-1163 area and 1168-1175. Resistance is 1195-1205 and 1209-1212. As we have discussed on the website all week, odds have favored that gold would meander and probably not setup until the NFP report on Friday. Odds are for a bad job report. However, can we even trust the Government won’t do what it has to in order to “MAKE IT LOOK GOOD?” While it could be a boost to gold, it will only be temporary. A collapsing global economy is not good for gold, at least not yet. If it were, then gold would not be down for the last 45 months nor would it have lost 700 bucks per ounce. Gold needs spending, growth, inflation, higher interest rates………..BUT NOT WHAT WE ARE BEING FED. Its best to wait for this range to shake out.

Silver

It’s the same story for silver. We await the convergence of the two trend lines with price in the middle. Key resistance to watch is 1670-1690 and 1725-1750. Support is 1550-1575.

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