Wednesday, February 8, 2012

Stanley Kubricks Gold Story.

Recently found reference (via Kitco) to this first of a four part series which makes the assumption (convincingly) that Stanley Kubrick intertwined his penchant for "Individual Sovereign Equity" subliminally into his Films - in this particular case, The Shining ...with Jack Nicholson.

When all is said and done, FreeGold epitomises ISE and heralds a return to a far more equitable set of circumstances for the "Individual" per-se.


One Bad Adder said...

also Nickel svp? it possible to perhaps change the text colo(u)r ;-) on the "Blogs I follow" box?

The various blues-on-blue make them hard to read.

Aaron said...

Interesting notion Sir Adder-

If in fact a key point of said thesis rests on the figures behind Jack being closely associated with Wilson (just thinking out loud), 10:30 in 2/4 is certainly interesting.

Is that $20 from 1950? I just don't know.

Much of the narrative in 3/4 and beyond is well established I believe -- but I wonder -- was this SK's intention or someone's afterthought?

All that aside, I must admit I have new hobby paying homage to the ^IRX. It's been moved to my daily walk in the forest -- yet Another roller coaster to ride as I cruise current time/space waiting for the inevitable.

Thanks a lot! ;-(


One Bad Adder said...

Yes Aaron, I used to have a bad case of "Green-line Fever" (watching the Kitco Gold price Chart) several years ago but came to the conclusion it is a controlled environment and probably wouldn't ever do the "moon-shot" I had been expecting.

Those "T's" are a much more perilous proposition now we're "on the mat" to speak.

$PoG is signalling to all who watch her that she is running WITH the S and P. ie: acting as a futures derived value asset. GOLD OTOH is anethma to longer-term Investments ...and ultimately this will be reflected WHEN it re-takes it's place at the head of the Here-n-Now queue.

Let's watch eh?

PS - Glad you liked the SK analysis I did. We drew very similar conclusions.

KJ said...

if fed raises rates, t's would likely rise...

but short of a miraculous recovery/economic growth, the fed has essentially called game over with floor level rates...

no/little return with t's/bonds, hence push towards risk paper assets...should see the stock market continue rising as paper dollars shift from t/bond market to other markets...and lastly to physical gold as $'s worldwide figure out that is the rational place to be.

oba, figure this game can go on until the inevitable shift into physical gold. But hedge funds/institutions/financial advisors will of course advise to put paper dollars at risk in the markets, away from t's/bonds...

ergo, it is when the individuals/entities (who are able to shift into physical gold) wake up to the illusion no?

One Bad Adder said...

KJ: -
In days of yore your prognosis (Yore-your;-) would be universally accepted but ...This time it's different IMHO.
The Fed have lost control of $IRX. Prior to the mid-2000's ...way back then, as you suggest FFR was raised ...and T's followed suit. Up until then $IRX was their MAIN Systemic Management tool.
I was ready, at that time, to ring the bell right there and then ...but we've limped on until this current time. Mr Market is I feel firmly in control and IMHO he will drive the short Yields seriously underwater any old day now.
As I've suggested, GOLD will be viewed VERY differently once these Yields establish themselves sub-Par KJ ...IMHO.

Lets see eh?

One Bad Adder said...

Nickel: -

You weild a mean spanner Sire ;-)

KJ said...

By lost control do u mean FFR will remain rock bottom forever and hence, cannot control demand side that has been funneling into t's? Ie. no incentive to move out of t's seeking greater risk?

But who controls the demand side? Be nice to know who owns what % according to category - ie. hedge funds, insurers, large corporate, ind's, etc.

For if the berkshires of the world own the vast majority of t's, and entities that would/must invest in paper, could the t rate not remain near/below zero while the game goes on per usual?

Could the fed indirectly therefore be in control of the irx through coordinated policy with the large % of t bill holders?

Nickelsaver said...


I'm thinking that charts on the blog may not be practical. They have to be big enough to read, and at that size, a bit clunky. Perhaps just links to the charts like the one on here now. What do you think?


One Bad Adder said...

Nickel: -
Just read your email re: same and agree. Without appearing repetitive, if we can include the Treasury-Direct feed as a Link maybe? ...and also the Yahoo ^irx it identifies with Zero Yield currently ...and isn't Log format.
If possible also maybe a sprinkling of short maturity Gilts, Bunds the Swiss and Yen ones as well?
So far, the only access I have to them is via subscription and I'd not be able to include them anyway ...will look for some "free-to-air" versions over the w-end.

I'm inclined to leave the one below that "should" be the signal when the music stops.

Coming along nicely - we'll (together) have the Blog looking the goods when Push finally comes to Shove.

Your site management is invaluable Nickel.

One Bad Adder said...

KJ: - I'm at work so will reply over the w-end.
Demand-side will be insatiable shortly.

Explain later.

KJ said...

ty good sir


One Bad Adder said...

Nickel: -
Is there anything we can do with this?

I was not very specific with my TD request ...D-uh!

One Bad Adder said...

Nickel: -

If the Blog can cope with RSS feeds, we can put quite a few of the various Gov't Debt offerings as dynamic RSS feed links.
I'm getting excited:-) ...can't you tell?

Nickelsaver said...

presto - chango

One Bad Adder said...

You're good Nickel - we've (you've) built it ...and the people WILL come:-)

Nickelsaver said...


You are the only necessary component to this blog. Thank you for allowing me to take part.


One Bad Adder said...

KJ: -
My prognosis is based largely upon the inevitable conclusion of a Fiat Currency regime nearing or at the end of its timeline.
The contention is that (firstly) we’ll see a pronounced loss of FAITH in the economic “future”.
$IRX and the $TYX:$IRX Ratio Chart (> Yonder) indicate just such a loss currently …and it is a good exercise to get hold of the longer time-frame versions of them to better understand the “process”.
So – let’s consider how the Trillions tied up in “Bonds” World-wide might look at the “current” State-of-Play.
The World is holding great wads of various US Treasury Bonds (say) 5% Coupon (sometimes referred to as BIG Float!) which has seen their “price” increase proportionally as nominal Yields have dropped.
As a Bond-holder do you (a) sit pat and “enjoy” the Coupon IR to maturity …or (b) CASH-in (for the profit) and join the Market-wise throngs in the short end who are currently threatening to take nominal Yield sub-par.

Rest assured KJ there are plenty of market participants currently sweating bullets as they ponder THEIR action in this current environment.
IF/WHEN we go convincingly negative in the short end, I’m thinking this “Big-Float” en-masse, will take the (b) option …thusly compounding the negativity. Without even considering the “liquidity aspects” of extricating BIG Float all at once from its longer-dated position, just imagine paying $1200 to get back $1000 in 3 months! …Bizarre or what? …but immensely do-able under the circumstances.
Management (Fed, CB’s etc.) are currently doing their utmost (all they CAN do) to forestall just such an “event” …but ultimately their various activities are making it all the more inevitable IMHO.

If you accept the basic tenet of the prognosis ie: that short yields WILL plumb the depths of negativity? By extrapolation then, we can conclude (a) the economic future looks pretty GRIM ie: there simply won’t be one! …and (b) the unique properties of GOLD - the Here and Now Asset, (as opposed to $PoG) take on a whole new significance in the scheme of things …Yes?

The above-described process is “genuine” DE-flation (not to be confused with DIS-inflation) which ultimately gives birth to HYPER-inflation …over a timeframe that could take months …OR these days with interconnectivity, perhaps only a matter of Minutes - believe it or not!


FOFOA said...

Nice job on the blog, boys! Might have to update my links list soon!

OBA, this reminded me of your negative IRX. Paying to store cash in a bank box is tantamount to negative interest. Another example of the confused rush to the here&now. BTW, the shortage of safety deposit boxes is not just in Zurich. I'm on a long waiting list (for a trust we administer) in my little town of ~2.5 million. Not a one available within a reasonable driving distance.

On Banknotes

Bruce's conclusion from the post: "This is the weirdest “bubble” I have seen. A mad dash for paper money. Like most bubbles, it is a result of manipulative monetary policy and an exchange rate regime that does not reflect supply and demand. Like all bubbles, it will eventually pop. And like all popped bubbles, that will cause a great deal of pain for all involved."


PS. My dad is a train nut and he went to China in '06 and also Lhasa, Tibet. I sent him your pdf and he said the train wasn't running yet when he was there.

One Bad Adder said...

Thanks FOFOA ...all credit to Nickel Sire - I envy you guys at the cutting edge of social media. It's one thing to come up with the Ingredients (the Raw data) ...but Another completely to cobble it all together in an appealing format. Nickel (and you also) - Masterchefs in the Internet "Kitchen" eh?

Same here in Sydney (re: the SDB's) Mine is 40K's away because anything closer is taken ...with queues waiting > 12 months.

Yes - That Lhasa train trip is NOW high on my "to-do" list after finding that article. Doubt it's quite THAT good in reality - One issue would be getting on at Sea-level ..and OFF at (what?) 18,000 ft. Taos Ski Valley (NM) @ 9000 Ft took MY breath away at first ...with many a sleepless night before becoming acclimatised - can't imagine how I'd go when hit with 18K.
Regards to FOFOA Snr mate - could be said we're BOTH in(to) Training eh?

KJ said...

Thanks oba, provided greater perspective. Stampede comes to mind. Fofoas hyperinflation posts come to mind and will have another read through. Shortage of dollars no?

Yes, the Lhasa train also on the to do list - fascinating.

Nickelsaver said...

A little something for OBA & FOFOA.


Oh, and FOFOA is the Master Chef...I'm just a line cook.

One Bad Adder said...

Nickel: -
Be still my ...etc;-)
The puffing-billy era was a great time to be growing up Sire. Well I remember as a 7YO riding in the "cockpit" of a Steam Loco - (at once both scared AND excited to be there) - for the 2 hr run from Brisbane to the Gold Coast (Dad was an X-Fireman and had arranged it as a treat)

The various Shinkansen (sp?)in Japan are a great experience is the Mag-Lev ...but for sheer poetry-in-motion, Steam wins hands down ...methinks ;-)
Nice compilation Nickel.

Nickelsaver said...


Is there a correlation between $IRX and $PoG?

One Bad Adder said...

Hey Nickel: -

I haven't abandoned ship mate ...just been busy with work is all, and hope to get a precis' redux of my old Time-Currency Blog posted over the week-end.

I think $IRX impacts ALL paper markets ...and the Gold "Market" is no exception.

There has been a lot of discussion recently about Gold and Silver flirting with "backwardation" in the "futures" ...he concensus being that this points to a desire to hold the Metal instead of opting for a future settlement. (Prof Fekete comes to mind)
What REALLY is happening is the discounting of futures in conjunction with near Zero Yield on $IRX.

What those wise Gold hearts neglect to take into consideration IMHO is that "futures" contracts are only deals done on "other" paper contracts.

When $IRX goes seriously negative I feel ALL contracts (Comex, Futures, Options-on-futures etc) will ALL drop precipitously, and ultimately the ONLY place to be will be up to the eye-balls in Metal itself ...irrespective of the transitional "official" PRICE.

All this talk of the "shorts" being hung out to dry? ...we're not dealing with stupid people here Nickel, they DO have an exit strategy IMHO.

Nickelsaver said...

So you believe $IRX is or will be a leading indicator.

After the Lehman crisis in 2008 we can see that $IRX deviated from its longer term trend. From what I can see, a decline in %PoG did precede this $IRX turn.

Now, as we look back at 2011 July thru Dec action when $PoG exhibited a classic bubble, we saw another change in $IRX.

I'm wondering now if a rise or spike in $PoG will precede a future negative $IRX indication. Or will $PoG simply drop from the mean in conjunction will a negative $IRX indication? And is $IRX a leading or trailing indicator.

One Bad Adder said...

Nickel: -

After the last little drop, I didn't think we'd EVER see $PoG @ $1700 + again, Yet, here we are!

$IRX has been in and out of "negativity" several times lately ...and it hasn't quite stuck ...Yet!
Re: the earlier times you referenced ...there was still plenty of wriggle-room on the downside with $IRX.

There isn't NOW!

You will probably see $PoG acting quite unruly as upward price pressure from Physical acquisition clashes with a washout from Globex etal. I'd not be too keen on "nominating a bell-wether" here though Nickel.
...apart from $IRX itself.

Nickelsaver said...

One Bad Adder said...

Hi Nickel:-

A lot of the "in"(Stocks)Crowd are out lately shilling their Books (FOFOA's Buffet piece eg:)

The dynamic has nothing to do with Yesterdays OR Tomorrows ...and all to do with Today's. will become apparent sooner rather than later I feel.

He makes a good point re: anything longer-dated than 3 month T's though IMHO.

sobione said...

Sir Topaz (or OBA) - I don not know how you want to be adressed - please advice
One question concerning negative yields - it seems that you are on the lookout for negative nominal yields on short term USG paper. In real terms the yields up to 10 year paper have been negative for some time. So why you choose to follow nominal instead of real yield?
Regards form Poland

One Bad Adder said...

Hey Sobi:- OBA's fine mate.

When compared to "inflation" (as determined by official sources) Yes, we are in negative Yield "across-the-board" ...however in my view there is no consideration of "official" inflation.

My prognosis relates purely to the "actual" state-of-play - related more to currency timeline issues in this here Global Fiat environment...
...and based on the assumption that the $US is the Kernel of the GF regime.

Essentially Sobi, there are NO other currencies - just renamed $US's ..which are subject to "local" influences ..."inflation" therefore only impacts those "other" currencies relative to $US.

'ol Bucky is immune to "that" type of inflation as it ($-Cash) is the ZERO in the current System.
The "domestic" $US (and it's so-called official Inflation) is really only a "for-consumption" construct which sees the "local" $US acting as a separate currency ...even though it's the SAME THING!
How Bizarre is THAT?

When we see Yields on 3mo T's establish below this ZERO, the world will quickly come to re-evaluating ALL longer-dated maturing assets.
The 3mo T-bill (and it's associated "Yield") forms the basis of ALL futures market contangoes and when it goes negative will they ie: Backwardation as far as the eye can see. The rush then into $-CASH (and the short end of the curve in general) will make your eyes pop! ...IMHO.

sobione said...

OBA - gottcha! So I think, at least. Thank you for your consideration.
As to may eyes popping out - thank God I am wearing glasses!

sobione said...

Good day. OBA - what is the meaning of the sentence "gold bids for US$" (at least for the time being)? Is it:
- large entities holding considerable amount of gold (of physical variety)acumulate reserves denominated in US$ in order to keep the ball running?
- financial players who have gold sell it (physical or paper derived from that gold)sell it in order to raise US$?
- some other explanation, perhaps?

when I approach it in a straightforwad manner, official gold market seems to be quite small comparing to vast financial world US$ needs. So gold is not able to perform a major role in securing US$ funding, methinks.

Another saying with which I have problem to visualize is A/FOA adage "gold moves through currencies".

I just do not grasp it.

If you have some thoughts on that to share I will be most obliged.

Have a nice day

One Bad Adder said...

Hey Sobi: -
The gist of it is that Gold "evaluates" currencies. It could be worthwhile ponder Gold on the "ask" side of the "bid-ask" ...and currencies occupy the "bid" side. If you think of Gold in these terms a "no-ask" market see's currencies go to Zero ...irrespective of an infinite currency "bid" on the table. Read the following in this context (ie: change the bids to asks)

from FOFOA: -

“Gold bids for dollars. If gold stops bidding for dollars (low gold velocity), the price (in gold) of a dollar falls to zero.” So you see, there doesn’t need to be a stampede into today’s “gold” for real, physical gold to become “priceless”. ANOTHER wrote, “Gold! It is the only medium that currencies do not “move thru”. It is the only Money that cannot be valued by currencies. It is gold that denominates currency. It is to say “gold moves thru paper currencies”.”

Hope that helps mate - Gold remains whole "moving through" currencies.

One Bad Adder said...

Now you've got me going sobi ;-)

Try and think of the bid-ask in terms of a negative yielding T-bill! Effectively, the "bid" side is higher than the "ask". OMG! That's a scary notion that I can't get my feeble mind around @ 6-am in the morning.

FOFOA said...

This is a test.

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