Gold Flash Crash With $1.2 Billion Of Futures Contract Trading (Silver Flash Crashes Too)

Strange days! First, the lovable losers from the “mistake on the lake” (aka, the Cleveland Browns) beat the New York Jets for their first victory in several seasons. Then, gold flash crashes and partially recovers.

goldandsilver

At 08:45 ET, more than 10,000 December gold futures contracts, each representing 100 ounces, changed hands on the Comex in New York. That amounts to approximately $1.2 billion notional of the precious metal. That was about 30 times the 100-day average for that time of day.

While most eyes are on gold, silver had the same flash crash but with a stronger rebound. The flash crash was less than 1%.

Did the New York Jets flash crash against the Browns?

GTY 1036935776 S FBN SPO USA OH

 

 

Mother Of All Bubbles (MOAB) And Endless Monetary Stimulus (Is Yellen Really Charles Atlas?)

This isn’t a Don Ho “Tiny Bubble.” But the Mother-of-all-bubbles (MOAB). Endless monetary stimulus from The Federal Reserve (and other Central Banks) has led to incredible distortions in asset prices.

If we look at the ratio of financial assets to disposable personal income, you can see the spikes in the ratio corresponding to the dot.com bubble of the 1990s, the housing bubble of the 2000s and the everything bubble of the 2100s. The commonality?  Fed interest rate low interest rate regimes. With each successive bubble burst, The Fed had to drop their target rate even further.

moabfed.png

But The Fed rate increases in 2008 weren’t enough, The Fed also adopted their QE quantitative easing) programs where they purchased more and more Treasury Notes and Bonds and Agency MBS. Particularly with QE3 (the large spike in the orange line

moabfed2.png

Now former Fed Chair Janet Yellen is arguing for ‘lower for longer’ rates ahead of future crises. Does she mean that interest rates haven’t already been too low for too long already???

Perhaps The Federal Reserve feels like that 97-lb weaking who gets sand kicked in his face. So they keep distorting prices with endless monetary interference.

97lbsweakling

Alarm! Core Inflation Cools To 2.2% YoY, Rent Inflation Cools To 3.3% YoY (GINI Index Keeps Rising)

Despite the predictions of rising inflation, core inflation (CPI YoY less energy and food) cooled to 2.2%.

coreyoy.png

And rent inflation cooled to 3.3% YoY.

cpirent.png

Gold prices rose on the lower core inflation report.

goldinf

Meanwhile, the GINI index of income inequality keeps on rising.

gini2017

According to the Taylor Rule, The Fed still needs to raise their target rate to 7.54%.

rudesept.png

The Federal Reserve didn’t see that coming!

jpmorgan