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Turn of the Screw

Tim Knight from Slope of Hope's picture




 

From Slope of HopeGood evening, Slopers. I was going to bombard you with ETF charts, to assuage my utterly misplaced blogger's guilt, but I landed on the first one - DBC - and figured it was enough. Allow me to share this with you, augmented with some embellishments:

1201-SPREAD

You will note something quite interesting: up until October 2011, commodities and equities had an awfully strong positive correlation. In retrospect, the rise from March 2009 until the summer of 2011 was pretty much justified, given the terrible beating-down that had taken place with equities.

However, after the last meaningful drop in equities (over three long years ago........) the Federal Reserve went full 'tard and made clear their utter and unwavering commitment to enslave future generations of taxpayers so that present-day billionaires could get billionaire-y-er. The cyan bar I've placed on the chart delineates these two eras.

It's pretty sad to think that the insanity of TARP and QE1 seem relatively sensible in retrospect, but honestly, until October 2011, we were still on the sensible side of the looking glass. Since then, as you can plainly see, what is representative of the true economy (by way of the commodity ETF, symbol DBC) and the fantasy-land Yellen pipe-dream (the SPY) have drifted farther and farther apart.

The spread now, tinted in green, is as wide as Oprah's elastic waistband. Take heed. If these two even think about shrinking their chasm-like gap, even by a modest amount, equities are going to get their cojones kicked in.

 

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Tue, 12/02/2014 - 10:38 | 5508297 Colonel Klink
Colonel Klink's picture

If corporations are people, then defund the people.  Stop buying anything from them (or as little as possible) and hit them where it hurts, their wallet.  Most effective vote you have is with your wallet.

Tue, 12/02/2014 - 10:21 | 5508225 illyia
illyia's picture

Nice chart. Thanks.

i

Tue, 12/02/2014 - 07:49 | 5507875 AdvancingTime
AdvancingTime's picture

For a long time much of the economic landscape has started to look like something out of  "Alice And The Looking Glass" A bizarre  and unrecognizable land, a land that is distorted and papered over by ream after ream of paper. This paper has been rolling off the printing presses of central banks all across the world in an attempt to mask reality.

The more and more I study derivatives it now appears the main goal of QE may have been to hold up the underlying value of assets that feed into and support the massive derivative market more than help the economy. QE has up to now stopped an implosion of derivatives and the resulting contagion and shock that would have spread throughout the financial system. Everyone paying attention knows that the size of the derivatives market is about 20 times larger than the global economy. About 95% of the $230 trillion in US derivative exposure is held by four US financial institutions, the article below looks into how this could collapse the economic system.

http://brucewilds.blogspot.com/2014/03/derivatives-house-of-cards.html

Tue, 12/02/2014 - 07:47 | 5507868 TheGreatRecovery
TheGreatRecovery's picture

The Supreme Court says there can be no limitations on corporations funding political campaigns, and the bankers have been issuing themselves gazillions of QE dollars and using those dollars to buy up the corporations by buying up the corporations' stock.  With control of all those corporatons, the bankers will be able to use as much corporate money as it takes to get candidates friendly to bankers elected.

I think someone should invent a new game similar to Monopoly in which one contestant gets to be the banker, and as banker gets to "loan" himself, interest-free, as much money as he wants, every time it's his turn to play.  This would solve Monopoly's biggest problem, which is that it takes so long to play a game.  The new game ought to take very little time to conclude.  :-)

Tue, 12/02/2014 - 09:11 | 5507985 Kina
Kina's picture

Supreme Court of the USA has thus made legal systemic political corruption, that the buying of governments is legal for Corporations, as much as their bank balances will allow.

Of course the Supreme Court is well aware of what it has done, but are themselves part of the sytemic disease to US democracy and legal system.

Fascit - Corptocracy institued as the political basis of USA. Supreme Court just dotting the I.s and crossing the Ts

Tue, 12/02/2014 - 08:53 | 5507968 p00k1e
p00k1e's picture
Mitt Romney- Corporations Are People! https://www.youtube.com/watch?v=E2h8ujX6T0A
Tue, 12/02/2014 - 10:30 | 5508262 usednabused
usednabused's picture

Yup, corps are people. Just the unaccountable and unjailable kind. Us on the otherhand are less than people by tRomney and all the rest of the banker and pols standards.

Tue, 12/02/2014 - 00:17 | 5507427 lunaticfringe
lunaticfringe's picture

Oddly, 2011 is when gold and silver started getting their ass kicked- in the 3 year PM bear market. 

Tue, 12/02/2014 - 08:22 | 5507926 Uchtdorf
Uchtdorf's picture

I never imagined that the banksters of the world actually loved me, but the recent drop in PM prices has been such a wonderful Christmas Hanukkah Kwaanza gift I am compelled in my poverty to shout my appreciation to our overlords.

Tue, 12/02/2014 - 10:07 | 5508171 max2205
max2205's picture

Over the Rainbow. ..thanks Tim

Tue, 12/02/2014 - 12:20 | 5508694 KnuckleDragger-X
KnuckleDragger-X's picture

And right into the Twilight Zone. I thought the word 'screw' in the title was quite appropriate.

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