Working on Gold/Currencies Analysis

It will likely be this weekend before weekly market analysis is complete. There are several confusing signs out there. Thus far, the preponderance of the evidence suggests we may be at a very short term turn up for the dollar and a sell-off in gold. This is likely not going to be a substantial move, and the dollar is not likely to exceed 80/81 on the USDX. We're currently looking at other markets for confirmation. Once the analysis is done, we will post the results. It will be done before markets open Monday morning in Asia.

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From the "Those Who Can, Do, and Those Who Can't, Teach" Files

We stand in amazement at how many economists seem to not understand economics.

Perhaps, instead of Galbraith's recommendations, we could simply all print however much money we need so no one has to worry about working anymore.  It follows the same logical principle..





Galbraith is right from one perspective--no Republican is going to live up to the promise of cutting any significant costs. The "reality" that said politician will never work again if s/he delivers on the promise of cuts will sink in and eliminate any chance of cutting anything substantial. The sheep know no for which they ask.

This insanity knows no bounds. Readers had best take specific actions to protect themselves. No one else is going to, and these decisions will have very real consequences.

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Happy Guy Fawkes' Day

"Remember remember the fifth of November

Gunpowder, treason and plot.

I see no reason why gunpowder, treason

Should ever be forgot..."

On this day in 1605, the Gunpowder Plot was uncovered, ultimately leading to the torture, death and martyrdom of Guy Fawkes.  This day is typically celebrated for the survival of the King instead of the the celebration of the plot itself, though given our modern times the purpose of celebration appears to be changing. 

There are those that believe that the votes they so recently cast are the modern form of revolt against slavery.  We don't share that belief.  We tend to believe more in the Aldous Huxley-esque vision where mankind enslaves itself while believing it had free choice. At its core, we believe that to be free--truly free--man must have privacy, economic freedom, and be knowledgeable about history, economics, and human behavior.  Our mission is to try and convey that information to help others and allow them to make herd-independent choices.  Sign up for our newsletter, the first issue of which will be out soon.

In other news, the USD tripped our stops yesterday and immediately turned to the upside today.  That's the kind of market we have, folks.  We're preparing the end of the week market view for posting later tonight.

In closing....

"Voila! In view, a humble vaudevillian veteran, cast vicariously as both victim and villain by the vicissitudes of fate. This visage, no mere veneer of vanity, is a vestige of the vox populi, now vacant, vanished. However, this valorous visitation of a bygone vexation stands vivified, and has vowed to vanquish these venal and virulent vermin vanguarding vice and vouchsafing the violently vicious and voracious violation of volition. The only verdict is vengeance; a vendetta held as a votive, not in vain, for the value and veracity of such shall one day vindicate the vigilant and the virtuous. Verily, this vichyssoise of verbiage veers most verbose, so let me simply add that it's my very good honor to meet you and you may call me V."--V for Vendetta

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Out of Popcorn: FOMC Announcement

From the horse's mouth.  In short, the move was roughly in line with expectations.  Initial "vindication" rally in the euro and stocks.  Now we expect a reversal for a few weeks with a dollar rally and stock market pullback (starting to get that now) before the market moves higher and the dollar moves lower.

Dramatic moves in currencies.  Amazing.  More on this later.

Get your funds ready for precious metals purchases.

Press Release

Release Date: November 3, 2010

For immediate release

Information received since the Federal Open Market Committee met in September confirms that the pace of recovery in output and employment continues to be slow. Household spending is increasing gradually, but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software is rising, though less rapidly than earlier in the year, while investment in nonresidential structures continues to be weak. Employers remain reluctant to add to payrolls. Housing starts continue to be depressed. Longer-term inflation expectations have remained stable, but measures of underlying inflation have trended lower in recent quarters.
Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate is elevated, and measures of underlying inflation are somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. Although the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability, progress toward its objectives has been disappointingly slow.
To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities. The Committee will maintain its existing policy of reinvesting principal payments from its securities holdings. In addition, the Committee intends to purchase a further $600 billion of longer-term Treasury securities by the end of the second quarter of 2011, a pace of about $75 billion per month. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.
The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate. 
Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Sandra Pianalto; Sarah Bloom Raskin; Eric S. Rosengren; Daniel K. Tarullo; Kevin M. Warsh; and Janet L. Yellen.
Voting against the policy was Thomas M. Hoenig. Mr. Hoenig believed the risks of additional securities purchases outweighed the benefits. Mr. Hoenig also was concerned that this continued high level of monetary accommodation increased the risks of future financial imbalances and, over time, would cause an increase in long-term inflation expectations that could destabilize the economy.
Statement from Federal Reserve Bank of New York

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With Bated Breath....

Popcorn ready.  Stops in place.  Waiting for Helicopter Ben and Turbo Tim to tell us much they're going to print up.  We're still anticipating the marketing will be disappointed, though we must add that the dollar is very close to key support.  A break here is a virtually guaranteed visit to 74 for a quick coffee and 70/71 for counseling.

Below that rests a lot of space and a lot of guesses.

Let's see if Ben can print money and still force a short term dollar rally.

Best grab a strong drink, too...

More after the announcement and some analysis time.

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