Gold Man! Net-shorts In Gold Futures/Options Largest Since 2006 (But Will It Continue After Last Week’s Bloodbath In Equities?)

Too bad Black Sabbath didn’t sing Gold Man.

Hedge funds and other large speculators increased their net-short position in gold futures and options in the week ended Oct. 9 to the most in data going back to 2006, surpassing a record reached last month, according to a government report released Friday. The wagers came days before turmoil in equity markets sent investors flocking back to the metal, pushing prices to the biggest gain since 2016 on Thursday after six straight monthly losses.

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Let’s see if gold shorts continue with the reversal of fortune in the S&P 500 index and gold.

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China And Gold: As The Yuan Goes, So Goes Gold (Trade War Effect?)

Over the past year, Gold has been looking quite similar to China’s currency, the Yuan. Eerily so.

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Bloomberg had this story back in July of this year:  “China’s Gold Mystery: Is Nation Slowly Increasing Reserves?”

The case for China raising its gold holdings seems compelling.

A potential trade war with the U.S. that threatens growth, simmering tensions on the Korean peninsula and this year’s slump in gold prices are reasons to buy. But People’s Bank of China data show the country’s gold reserves haven’t risen since Donald Trump was elected President in 2016. Still, this wouldn’t be the first time the central bank has kept silent while adding to its stash.

I guess the answer is yes, but not since Trump was elected President. But I have the sneaking suspicion that China is adding to its gold stash.

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I simply must buy one of those natty Mao suits to wear to George Mason University faculty functions.

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About That $61,372 Report Of Real Median Household Income — Obama Administration Changed The Way It Was Measured In 2013 (Tell The Story Right!)

True, real median household income (RMINC) has been rising since 2014.

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In fact, real median household income looks far better from 2014 to 2017 than it did from 2007 to 2012 (orange line). Yes, that declining RMINC line looks pretty bad if you are trying to convince voters that the economy is doing well. Particularly with average hourly earnings plummeting and remaining stagnant until 2015.

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So, in 2013, President Obama and the US Census Bureau decided to change the way RMINC was measured.

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Starting in 2013 with a partial phase-in, which was fully implemented in 2014, Census changed the questions and the methods in calculating household income.

For example, Census, starting in 2014, began to “collect the value of assets that generate income if the respondent is unsure of the income generated.

Also, the government started to use “income ranges” as a follow-up for “don’t know” or “refused” answers on income-amount questions.

Okay, so guess the assets that you have that are generating income. The fact that the US has experienced massive growth in stock and housing prices thanks, in part, to The Fed’s highly accommodating monetary policies, particularly since wage growth has been so stagnant since 2009.

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