Gravity Waves Discovered? Origin of Cycles?
Prof. Laurence Kraus is a well known theoretical particle physicist at the University of Arizona. With a short message on Twitter, Kraus caused a stir around the entire world: “My earlier rumor about LIGO [Laser Interferometer Gravitational Wave Observatory] has been confirmed by independent sources. Stay tuned! Gravitational waves may have been discovered!! Exciting.”
What’s the big deal? Gravitational waves are actually waves within space-time.They were predicted to exist back in 1916 by Albert Einstein who surmised that they were either the result of massive stellar explosions (supernova of type II) or the merging of black holes and neutron stars. Even the Big Bang itself should have sent gravitational waves into space-time according to Einstein. If true, this would be the origin of cyclical waves.
According to Einstein’s theory of general relativity, gravity is not a force as Newton postulated with the apple falling from the tree. Instead, gravity, Einstein argued, was a property of space and time, which could be distorted by large masses. This, in turn, could affect light and matter. Earth would thus curve the surrounding space-time, and any large masses in motion would thereby create wavelike disturbances in space-time.
No one has been able to prove the theory just yet. So Kraus’ Tweet has sent its own shockwave throughout the world.
Gold – No Time Left for Conspiracy Theories
To some, this is a religious battle. To others, it is just a time to rip off a lot of people by selling fantasies and sophistry. I have stated this many times, so here it goes again: Gold rises when people lose confidence in government. It hasnothing to do with inflation. So, you start to worry about government survival or who’s going to win a war when gold rises — not before.
Short term, we still have the risk of gold going under $1,000 per ounce. It’s going to flip when everything is right — not before. It will probably max out at $5,000 per ounce or perhaps $6,000 at best. That we will not know until we have the low and the projection angle from that low. We’re dealing with a very profound event, religion aside. Such events of political-economic trend resets come around every 309.6 years. The last one was the global revolution against monarchy which began in the United States.
If you just step back and look OBJECTIVELY at what is unfolding from electronic currency to G20 demanding info on everyone and every penny that changes hands, then you can see where the future is headed. We do not have a democracy; that is total nonsense. The president appoints the heads of all departments. Nobody stands for election right down to the head of the Federal Reserve.
In Europe, you have the three-headed dragon they call the Troika — the European Commission (EC), the European Central Bank (ECB), and the International Monetary Fund (IMF). None of those three members heads have EVER stood for election. They too are undemocratic appointments. So the European population cannot even vote for their future.
Gold will respond ONLY when the majority sees the crisis unfolding. Just because you may understand it and see the logical outcome does not mean that the bulk of the population will. During the American Revolution, they actually issued currency backed by assets confiscated from “Tories” or those who supported the king against the people.
There is no time for nonsense conspiracy theories or other sophistry. This is about a major shift in political economic trend, which is far more important than the job to sell gold by people pretending to be analysts with nothing new to add to the issue other than inflation, fiat, and the theory that all paper currency is evil.
Market Talk — January 13, 2016
A mixed session in Asia (Nikkei +2.9% and Shanghai -2.4%) left just the HSI as the deciding factor and that closed stronger at +1.1%. Europe and the U.S. futures were all pricing in a stronger open and until mid-day (Europe) that was pretty much business as usual. Yes, we did see a turn in the price of oil during mid-afternoon trading. Another technical failed with a 10yr bund auction and more corporate job redundancies but there are also concerns over some high-yield bond funds and this remains a cause for concern for the stock market. The more money we see being pulled from (credit) bond funds, the more the underlying markets will need to reflect the decreased liquidity. Once we see triple-digit declines, particularly when you see large a trading range (almost 500 points today), then the nerves will appear and the rush for safety will begin.
The U.S. Treasury market was that harbor today with 10yr declining almost 7bp (to close 2.07%). The front end saw the majority of the inflow and we last saw 5’s trading at 1.52%. In Europe, the German auction result failed to cover bids (actual 0.85:1) with the bid way under the then current market price. The US/Bund 10yr spread closed +157bp. Italy was a little more fortunate selling a total of 6.7bn across 3,7 and 15year BTP’s (bonds).
Gold bounced in late U.S. trading, rallying almost $11 and was last seen at $1093. The sell-off in oil today focused mainly on Brent today (hitting a 12yr low -1.9%) pushing the spread between WTI and Brent trading -$0.30 (WTI $30.65 and Brent $30.30). Yesterdays breach into the $29 handle has certainly gone a long way to spook markets, especially coupled with some houses calling for a price drop into the teens.
Not too much action in the currency markets today but all eyes will be on the Bank of England tomorrow for the rate decision. Nothing is expected, and looking at the curve, the market has nothing priced-in until early 2017. Sterling is obviously taking the heat for this and has fallen almost 5% in the past few months. DXY had a quiet day closing almost unchanged at 99 (-0.05%).
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