As of 3/15/2016, the CPI adjusted 2000 dollar is worth 71.04¢, and the CPPI adjusted dollar is worth 38.03¢.

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If Hillary wins...

It's extremely likely that we'll cease updating all of the charts and let our domains expire naturally.

Update //2015 -

Chart update delays...

Weekly charts probably won't be updated until late Tuesday due to health issues.

Update 8/19/2015 - Both today's and last week's charts are now online. Please accept our apologies for the delays.

ECB monetary stats...

Euro area most recent annual change rates are mostly booming:

M1 - 12.7% (US - 7.1%)
M3 - 6.7% (US - 3.5%)
Consumer credit - 8.3% (US - 6.8%)
Domestic credit - 1.6% (US - 7.7%)(EU area up from negative 3 months ago)
Inflation (HICP) - .3% (US - 1.8% CPI core)(EU area up from negative 2 months ago)

Update 6/4/2015 Why is M3 (~3.5%) continuing to grow slower than M2 (~6%)?: M3 is M2 plus Eurodollars, Institutional money market mutual funds, Large-denomination time deposits (over $100k), and repurchase agreements.
Both money market funds and large time deposits have been growing slowly due to higher returns being available elsewhere. The bullish sentiment on the dollar has not shown much of an effect on Eurodollar balances, probably due to hopes of a Euro recovery. Actual Eurodollar balances are down about 15% since last June.
Lastly, the Fed's reverse repo program have caused total repos to be down over 20% since last June.

BLS CPI vs. Shadowstats measure...

The recent critique of the Shadowstats inflation measure, while incomplete, also echoes our own concerns about Shadowstats numbers being too high, and was one of the reasons we started our own measure, the Consumer Purchasing Power Loss Index. (BLS CPI issues and our CPPI). Note also that our correction factors for the BLS CPI are data driven and variable, and change every month.

Inflation day...

Gold spot up $18 (1.5%), silver spot up .33 cents (1.5%), WTIC spot oil up almost $3 (6%), S&P 500 up over 13 points (and up over 49% in the last 3 years, below the hyperinflation rate of 100% in 3 years ;).

Something is up!...

Huge leap in Federal Reserve swaps (loans to other central banks) per this week's H.4.1. Up to $810 million from $3 million last week.

ECB monetary stats...

M1, annual change rate +11.4% as of February; M2, annual change rate +5.66%; M3, annual change rate +5.9%; Consumer credit, +5.0%; Domestic credit, +1.3%; Base, +9.5%. All are up quite substantially in the last few months. Beware shorting the Euro, more money printing is going on in the Euro area than most realize.

BoJ monetary stats
M1, annual change rate +4.9% as of February; M2, annual change rate +3.5%; M3, annual change rate +2.9%; Credit, +4.1%; Base, +36.7%. Credit and Base are up substantially in the last few months. More money printing is going on in Japan than most realize.

Update 3/24/2015 - Monthly Chicago Fed National Activity Index worst since Q1 2014

CPI & inflation
CPI-U NSA -.03%
CPI-U SA .01%
Median CPI (Cleveland Fed) 2.3%
Core CPI 1.7%
CPPI (Consumer Purchasing Power Loss Index) 3.32%
Water, sewer, trash 4.6%
Medical care 3.6%
Education NSA 3.5% (books and supplies 5.8%)
Food 3.0% (away from home 3.2%)
Motor vehicle insurance 5.6%
Tenants and householder insurance 5.2%
Electricity 3.2%
Household energy -1.3%
Services (~70% of the economy, 2.4%)
(All are annual change rates)

Update 3/26/2015 - Fed monetary stats
M1, annual change rate +9.9% as of February; M2, annual change rate +6.6%; M3, annual change rate +5.2%; Total credit, +6.6%; Base, +6.2%. Credit is up substantially in the last few months. Even velocity is showing mild signs of growth. More money printing is going on in the U.S. than most realize.

Continuing down stats...

Industrial production (INDPRO) was expanding year over year at 5.1% last July. This February and per today's data release, it's 3.5%. The NAPM Purchasing Managers Index is worse. Last July it was growing year over years at 3.1%. This February it's shrinking at -2.6% and last December it was shrinking at -2.5%.

Update 3/18/2015 - Our crisis perdiction model continues to warn even stronger.

Atlanta Fed GDP forecast not good...

Yet another negative sign, like the recent poor ISM Manufacturing one

Update 3/6/2015 - Per the Household employment survey and since its peak in Nov. 2007, full-time jobs have decreased by 1.0 million and part-time jobs have increased by 2.7 million.

Bank credit huge growth...

The annual change rate of growth in new bank credit has grown since about last August when it was around 5.5%. Last week, it grew at 8.3%! And in December 2013, it was only growing at about 1.4%. The chances of actual CPI-U deflation this year have gone way down in our opinion.

Turn forecast...

Our rather eclectic model shows the next (down) turn probability to be around mid March.

Oil, Fibonacci levels...


Down almost 48% since the high, up almost 25% from the low. Next resistance level in the low $60s, then around $75.
100.0 111.38 (high 6/23/2014)
76.4 96.04
75.0 95.14
61.8 86.56
50.0 78.89
38.2 71.22
25.0 62.65
23.6 61.74
0.00 46.40 (low 1/13/2015)

Update 2/6/2015 - Reconstructed U-7 unemployment rate, up to 20.4% from 20.1% (23.7% with participation rate correction).

Financial crisis probability...

Our tracking of a financial crisis probability has climbed much closer to a danger zone during the last few months. Chart

Full page with all charts and algorithm description

Deflation worries counterpoint...

The actual record of US total credit expansion per the Fed's Z1, H8, etc. 3Q 2014, 4.5% YoY growth. 4Q 2014, 6.3% annual growth rate. (red line)

More slowing...

Philadelphia Fed Current Activity Index came in at 6.3, down from 24.3 last month. 18.7 was expected. Huge unexpected move up in the Swiss Franc is overshadowing it in the news.

ISM, potential slowing...

ISM manufacturing report comes in very soft, another potential sign of slowing

Early 2015 cartoon

Update 1/6/2015 - Dollar index Fibonacci numbers, 2002-2014

100......... 119.86 (Jul 5, 2001)
76.4........ 108.25
75.0........ 107.57
61.8........ 101.07
50.0........ 95.57
38.2........ 89.47
25.0........ 82.98
23.6........ 82.29
0.0......... 70.68 (Mar 17, 2008)

Update 1/9/2015 - Our U7b unemployment measure dropped to 20.1% from 20.3% last month.


We expect to start to soon see articles about the Paris Accord and Louvre Agreement in the mid '80s, where the dollar "unexpectedly" dropped from the 160s in 1985 to the 80s in 1988 due to political pressures. Currency intervention does work, in spite of the silly claims of certain under educated or historically unaware folk.

Per Armstrong's work, we also had a large dollar drop in the 30s, from roughly 160 in late 1932 to 107 in 1935. We remain very leery of black swans and unintended consequences in currencies in the continuing games between various groups of elites.

"History doesn't repeat itself, but it does rhyme." -- Mark Twain

Wage inflation continuing evidence from the BLS.

Civilian hourly compensation is up to $22.13 during 2014 3Q, which is a 2.7% gain from 2013 and is up from the 1% annual gain area in 2009-2011. Civilian hourly *total* compensation (including benefits) is up to $32.20 during 2014 3Q, which is a 3.3% gain from 2013 and is up from the 1% annual gain area in 2010-2011. State & local gov't, hourly total compensation (including benefits) is up to $43.56 during 2014 3Q, which is a 2.5% gain from 2013 and is up from the 1% annual gain area in 2009-2010 ($39.74 in 2010 2Q).

There is no such thing as a conspiracy.

Sincerely yours,

LIBOR trader, 2011,
Bernie Madoff (Ponzi scheme, 1992-2008),
Bernie Ebbers, Worldcom, 2005,
Samsung & Hynix & Infineon, DRAM price fixing, 2005,
President Bush, "WMDs are definitely in Iraq", 2002,
Enron and Arthur Andersen, 2001,
Jack Abramoff, casino lobbying, 1995-2004,
Savings & Loan executives, various, 1990,
Ollie North, Iran-Contra 1981-85,
President Richard Nixon (missing tape recording sections during Watergate, 1974),
Daniel Ellsberg, Pentagon Papers, 1972,
Secret bombing of Cambodia, 1969,
Reichstag fire, Berlin 1933,

Big perspectives and thoughts

Major reasons for gold price changes, in no particular order:
  1. Limits in supply, "peak cheap gold"
  2. Changes in demand (investment, jewelry, manufacturing, central bank etc.)
  3. Inflation direction & speed of change
  4. Real interest rate direction
  5. Fear - social, political, "financial system", peer pressure, safe haven
  6. Pain & Misery index (unemployment plus inflation rate)
  7. Changes in confidence of money or a given currency or the "financial system" (..."gold is simply the reciprocal of the world's faith in the institution of managed currencies. It is one divided by T, where T stands for trust." - James Grant, Barrons, Sept 2011)
  8. Manipulation/control/intervention by central banks and others
  9. Mania
  10. Technical analysis factors
  11. High general volatility
This is not intended as a complete list but at least provides a framework within which to judge price action.

Another take: Fundamental Drivers of the Gold Market

Some of the major ways the whole world wide economic and political issues could play out, in no particular order:
  1. Inflationary or hyperinflationary depression, aka very significant stagflation
  2. Deflationary depression
  3. Debt restructuring
  4. "Rescue" by the IMF, BIS & World Bank (or similar institutions) involving a new world currency etc.
  5. "Debt jubilee", partial or not, and including an all consumer government bailout in order to pay down debt.
  6. Reverse debt jubilee by a supposed one off asset tax on everyone.
  7. Wars of varying sizes, and not necessarily involving guns and shooting
  8. Large population decreases, due to disease, weather events, energy and/or food shortages, wars, or other Malthusian issues.
  9. "New World Order" - oligarchy, fascism, corporatism, kleptocracy, etc.

    On the brighter side:
  10. Energy breakthroughs
  11. True leaders and statesmen emerge
  12. "Age of Aquarius" factors, in other words very unexpected positive changes - aka, "white swans"

    And obviously, various combinations of the above.

"The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery."

Full text:

"A credibility trap is a condition wherein the financial, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform, or even honestly address, the problems of that system without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves.

The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even the impulse to reform within the power structure is susceptible to various forms of soft blackmail and coercion by the system that maintains and rewards.

And so a failed policy and its support system become self-sustaining, long after it is seen by objective observers to have failed. In its failure it is counterproductive, and an impediment to recovery in the real economy. Admitting failure is not an option for the thought leaders who receive their power from that system.

The continuity of the structural hierarchy must therefore be maintained at all costs, even to the point of becoming a painfully obvious, organized hypocrisy."

Prior years blogs