Gold is rising and alerting us to the fact that all is not right in the world. It too, is…
‘If anyone is interested in a job at Lloyds Bank, please see me later’ muttered my teacher during my Economics ‘A’ level exam back in the early 80’s. How time flies. ‘It is a job for life’ my parents eagerly advised, ‘safest job around’. With a backdrop of 70’s strikes and power cuts; the Falklands War and an economic recession sending friends on so called ‘youth opportunity’ programmes, it seemed a sensible idea at the time. Reprimanded for not wearing a tailored, starchy suit on my 1st day and making a slight (well, more than slight) alcohol induced fool of myself at my 1st Christmas work party, were early signs banking was not going to give me the career longevity my Mum and Dad (sorry, ‘grown-ups’ or ‘folks’ if I use the correct inclusive terms) hoped for. I stayed at the Bank for 8 months.
Fast forward 40 years and I am slowly ‘soarin’, flyin and breaking free’, (in Zac Efron and Vanessa Hudgens’ words), from the lockdown chains and sitting in a lovely spot in Cabot Square, Canary Wharf. Eerily quiet, wine gums in hand and gazing at the sun’s rays bursting through the clouds and bouncing off the majestic, stand to attention skyscrapers. What more could a London day tripper want? But all is not right. My senses are conflicted. One eye observes a celebration of wealth and prosperity and a view worthy of a New York skyline whilst the other sees the buildings as a gathering of seedy, mob gangsters in shiny raincoats, mercilessly puffing the daylight out of their Havana cigars. Bugsy ‘whack – whack’ Morgan, Vito ‘quack – quack’ Suisse, H.S. Beesee and ‘Scarface’ Deutsche hatching their next criminal activity or financial crisis, that they and only they, will benefit from. There is also a stench that I cannot quite fathom the source. Is it the rotting raw meat that gets thrown into the reception areas of these skyscraper kennels to feed the scavenging, rabid, competitive dogs that live there (well it is the Isle of Dogs after all) or is it the relocated Billingsgate fish market next door? Regardless, something smells fishy.
Scratch the thin glossy veneer of the residents of Canary Wharf and you will see a different world. Basking in the sun’s weak spring heat and sad I know, but I started googling bank news and fines. In 2008, Lehman Brothers collapsed and vacated a 33-storey tower, with an overnight loss of 4000 employees that nearly killed off Canary Wharf. A devastating loss of champagne swigging City boys and I guess at one stage, I could have been one of them. Wine gums are the closest I get these days. Between June 2011 and November 2014, JP Morgan was fined more than $35billion for criminal activities involving currency and energy market manipulation, LIBOR rigging, toxic mortgages, and improper foreclosures. More recently, it has paid nearly $1billion for manipulating precious metals markets. In 2012, HSBC paid $1.9billion in fines relating to money laundering and by 2015, Britain’s big 4 banks had racked up £50billion in fines since the financial crisis.
I would have been there all day if I noted every bank fine over the previous 10 years. In 15 short contemplative minutes in Cabot Square, my mind reflected on the massive, dominant, arrogant skyline, not as Canary Wharf but as Canary Dwarf. Big buildings, short in stature. I realised I was in enemy territory. I could see all their wealth and criminality, yet I was invisible to them. And so it is with the markets. The Champagne Charley’s that somehow end up in senior Government positions because they have worked at JP Morgan, Goldman Sachs or Barclays have minimal peripheral vision to notice me nimbly sneak in behind enemy lines. A real David and Goliath moment. I and you are ants, marching to the Adam Ant beat, battling the evil forces in the precious metals markets each day and slowly being joined by more and more ants (welcome wallstreetbets reddit readers) who are starting to take on and bring down these dwarf-like behemoths. For the woke amongst you, please note that I am not writing about dwarfs in derogatory terms and no dwarfs were hurt during the writing of this paragraph.
Leaving Canary Dwarf by Uber river taxi we saw where ‘Gods Banker’, Roberto Calvi, was found hanging from scaffolding underneath Blackfriars Bridge, allegedly killed by a Mafia Godfather and on arrival we see news that Bernie Madoff, who ran the biggest Ponzi scheme in US history has died. One certainty in life, there will always be banking scandals.
Loosely continuing the theme, they call Gold ‘the canary in the coal mine’ and this refers to the former practice of taking caged canaries into coal mines. The birds died if methane gas was present, and this alerted miners to danger. Despite the manipulation and despite the fines, Gold is rising and alerting us to the fact that all is not right in the world. It too, is smelling the stench.
Let us look at last week’s action.
Although technically, Gold is still in a downtrend, the daily action is very constructive. We have a double bottom and the tough Maginot line nut at $1750 was not so tough to crack. I hope the shaded rectangular area is a solid foundation for higher prices. After a $100 run, a small pullback will be healthy here to give it the oomph to scale $1800. Should it break below, Christmas will have arrived 8 months early and I will be mopping up mining shares hand over fist. Kirkland Lake Gold is one example of a mining share (along with those highlighted last week) that is displaying strong technical features.
$26 is proving a tiresome level for Silver to overhaul but support looks strong at $24 and $22. We just need to pull the elastic band back a little bit more to propel it to attack $28. And attack it will. It is just a matter of time.
Food for thought
The phrase “food for thought” dates to the French revolution when people, inspired by the Enlightenment (an intellectual movement sometimes referred to as the ‘age of reason’) shed previous beliefs that were taught by popular religious outlets and started to question things. Well, having read a couple of articles recently about gender fluidity, I am questioning the French language. I never could understand ‘Le’ and ‘La’ and how certain objects were masculine and feminine, so I think a full review is required. Alternatively, how about a return to the ‘age of reason’ but obviously avoiding the guillotine beheadings this time?
‘SHOW ME THE MONEY’ and show the money they did. Shame on you Fenway Sports Group, (Liverpool), the Glazer family (Man Utd) and the other greedy so-called glamour clubs for selling your souls and trying to initiate an elitist European super league (that they and only they, would benefit from – I have heard that somewhere before), underwritten by…. yes, you have guessed it, JP Morgan. ‘Bugsy ‘whack-whack’ Morgan reporting for duty and to help you to continue living beyond your means, Sir’. Goodfellas and bedfellows, you are perfectly matched, may you dangle from Blackfriars Bridge and sleep with the fishes. Within a day, the deal falls apart. Stick your apologies where the sun does not shine and sell your clubs to your fans.
Saturday saw the funeral of Prince Philip, Duke of Edinburgh and unless you are a royal historian, many interesting facts emerged, that are not often shared in the public domain. I was surprised to read that he was born on a dining room table; forced into exile from Corfu and was patron to over 900 charitable organisations. “It is my invariable custom to say something flattering to begin with so that I shall be excused if by any chance I put my foot in it later on.” And put his foot in it he did on many an occasion. I like that approach. A man of great character. Stand at ease Sir, your job is done.
In recent news, the retailer Shoe Zone announced that Terry Boot will be its next finance boss, replacing Peter Foot, who unexpectedly walked away from the role last month. Corny, good for the sole and 100% true.
Stay safe and see you next week. I am Sheep Shearer and I shear sheep.