Thursday, February 3, 2011

Their revolt failed, too.

Molten gold down your throat

A very clear message

Thank God they're only after the gold and silver. They don't know about jade.

-Montezuma upon first encountering the Spanish.

The Spaniards appeared to be much delighted, they seized upon the gold like monkeys, their faces flushed. For clearly their thirst for gold was insatiable; they starved for it; they lusted for it; they wanted to stuff themselves with it as if they were pigs. They went about fingering, handling the streamers of gold, passing them back and forth, grabbing them one to the other babbling, talking gibberish among themselves.

— Fray Bernardino de SahagĂșn, General History of the Things of New Spain


Like unstamp'd Gold, I weigh each grace,
So that you may collect
Th'intrinsique value of your face
Safely from my respect.

And this respect would merit love,
Were not so faire a sight
Payment enough; for, who dare move
Reward for his delight?

-Ben Jonson


The original Black Friday

James Fisk's testimony:

"An ever fixed mark"

Tuesday, February 1, 2011

Acute Cranial Rectitis...

Fed passes China in Treasury holdings

...or insanity?

By Michael Mackenzie in New York
Published: February 2 2011 00:01 | Last updated: February 2 2011 00:01

The Federal Reserve has surpassed China as the leading holder of US Treasury securities even though it has yet to reach the halfway mark in its latest round of quantitative easing, according to official figures.

Based on weekly data released on Thursday, the New York Fed’s holdings of Treasuries in its System Open Market Account, known as Soma, total $1,108bn, made up of bills, notes, bonds and Treasury Inflation Protected Securities, or Tips.

According to the most recent US Treasury data on foreign holders of US government paper, China holds $896bn and Japan owns $877bn.

“By June [the Fed] will have accumulated some $1,600bn of Treasury securities, likely to be in the vicinity of China and Japan’s combined holdings,” said Richard Gilhooly, a strategist at TD Securities. “The New York Fed surpassed China in the past month as the largest holder of US Treasury securities,” he noted.

The Fed is buying Treasury debt under two programmes. The largest is QE2, which began in November and is scheduled to involve $600bn of purchases by June.

It is also buying $30bn of Treasuries a month as it reinvests principal payments from its large holdings of mortgage debt and debt issued by government housing agencies – a programme dubbed QE lite.

By the end of June, the Fed plans to buy $800bn in Treasury debt under both programmes. Since November, the Fed has purchased $284bn of Treasuries.

The Fed has devoted 67 per cent of its QE2 purchases to Treasuries with a maturity of four-and-a-half to 10 years. That has helped pull back yields in that part of the yield curve from their highs of December.

By contrast, just 5 per cent of the Fed’s buying has been for Treasury debt longer than 17 years. Last Friday, the yield on 30-year bonds briefly rose to its highest level since last April.

“The end of QE2 will be a big test as rates are likely to rise once the Fed stops buying large amounts of Treasuries,” said David Ader, a strategist at CRT Capital. “We don’t know if that means a rise of 20, 30 or even 50 basis points for key yields.”

In total, foreign central banks hold $2,604bn of Treasuries, according to the Fed. After rising from $2,250bn at the end of last June, foreign central banks have stayed at about $2,600bn since mid-November, when the Fed began QE2. This indicates the Fed has stepped up as other central banks have scaled back their Treasuries purchases....

Monday, January 31, 2011

Mrs. Boyer

On July 4th, 1974, Louise Auchincloss Boyer's dead body was found beneath the window of her 10th floor apartment. Three days prior, a newspaper published a story in which legal counsel for the American Gold Association accused the Rockefellers of looting Fort Knox of most or all of its gold. The anonymous source of the story had been Mrs. Boyer, executive assistant to Nelson Rockefeller.

Thursday, January 27, 2011

Selling the family cow for a few magic beans

The swap rate is the difference between the forward price and spot price. The inverse of the swap rate is sometimes called basis. Spot price is sometimes called the cash price. When the swap rate is less than the cost of carry, then a market may turn from contango to backwardation. Cost of carry is basically the cost of holding a position. A market may begin to experience backwardation when no arbitrage can be made from delivery due to supply shortages or risk of a delivery failure. Contango occurs when the forward price is higher than the spot price, i.e., when the forward price is at a premium. Backwardation occurs when the forward price is lower than the spot price, i.e., when the forward price is at a discount. When there is a supply shortage, delivery arbitrage disappears because no supply is available.

Tuesday, January 25, 2011



For all of silver's virtues, which are many and profound, the general populace is less inclined towards silver than the ruling class is inclined against it.

View from the top

New Orleans slaves were the Brent Crude of early 19th Century America.

U.S. Savings Rates

Monday, January 24, 2011

Valence of Value

Gold is an excellent conductor of heat, electricity, and value.
Wealth can easily flow through gold–––and without tarnish or corrosion.
Output is comparable to input.

Debt-money is an insulator.
Wealth can flow through it–––but only with effort and loss.
Output is less than input.

Wealth preservation versus wealth destruction.

Insulators have valid and necessary functions as much as conductors do, but should one's lifetime of labor be measured by currency units borrowed into existence?


Which one would J.P. Morgan hire, the Miser or the Monkey?


...the Ichimoku storm clouds forming in the distance.