'Tis a scientifically proven fact that no matter how many people wish a thing were so, it remains not so. Or, as we say in Tennessee, wish in one hand and spit in the other and see which one fills up first.
Thus I view philosophically the present huhu about raising the minimum wage. Even the staid Government Accounting Office has declared that Bernard O'Bama's plan to raise the federal minimum wage to $10/hour would kill about 500,000 jobs.
I could explain this with painful graphs & long discussions about the marginal value of labor, but it's easier explained thus: Suppose you work for me sweeping out my garage. Paying you $7.50 an hour to sweep free me to make $10 an hour working on cars. Whoops! Now the yankee government raises the minimum wage to $10.10 an hour, & I am paying you more than you are worth. I will fire you & sweep out the place myself.
If the yankee government raises the federal minimum wage, this will happen half a million or more times.
Besides, there's this little issue of "jurisdiction," namely, the federal government hath neither jurisdiction nor power to dictate wage rates to all employers, only those over whom they have jurisdiction. Thus hysterical laughter breaks out when I hear the Seattle mayor & other assorted socialists are threatening to wage the minimum wage in Seattle to $15/hour. By what power? It's a city government, and unless Washington state differeth greatly from other states, cities have no such power. They can change the light bulbs in traffic lights and set speed limits in school zones & run garbage collection, etc., but set wage rates? Not generally. I suppose they could pass a law that says the value of Pi is 3.1400 to make calculations easy for grade schoolers, but that law wouldn't change a thing, either.
Looneydom. We live in Looneydom, where cruel do-gooders who love all mankind but no man are willing to impose their ideology to improve the rest of us no matter how many of us it kills. Like Janet Reno at Waco, you have to kill the chir'ren to save the chir'ren. Looney.
Complacency rules markets still. Stocks backed off slightly but without significance. Silver & gold are about to make me change my mind about their near-term course. And national fiat currencies are still a disgusting affront to all just men and the ambitions of all honest people.
But one day before too long the complacency will break.
Stock investors still believe in the Money Fairy, Mother Yellen. That is, they apparently believe the stock market is rising for economic reasons rather than merely a rising tide of newly created money. This is what they wish is so, but . . .
Dow Industrials today fell 21.97 (0.13%) to 16,558.87 & the S&p500 inched back 0.27 (0.01%) to 1,883.68. That leaves both still broken out above their short term downtrend lines so they should head higher.
No sooner did I speak of the bearish rising wedge in the Dow in silver than it broke out upwards. Wedges sometimes break out contrary to usual expectation, normall the opposite direction they point. Today the Dow in Silver hit a new high for the move, higher than the December 2014 peak at 853.15 oz (S$1,103.06 silver dollars). Closed today at 869.55 oz (S$1,124.27), up 0.56%. More upward movement will come.
Dow in gold closed above the downtrend line at 12.84 oz (G$265.43 gold dollars). Implies higher prices still.
US dollar index bounced slightly, up 0.1 basis point to close at 79.57. It appears only to be waiting for some signal to fall to 79 and lower. Euro & Yen were flat today.
Gold lost $12.50 to close Comex at $1,283.10. Silver gave up 13 cents to end at 1,898.9c.
With today's low at 1868 cents, silver had given up 100% of its gains since end-December. Given silver's volatility, that's not unusual, but under the context -- a 3 year correction -- it implies silver will move lower. This lower low today wipes out last week's dramatic upward reversal.
Silver has not, however, traded below its downtrend line from last April. To be clear, if silver is not bottoming here, it might lose its grip and fall to 1750c. It would have to close above 1950c then 2000c in rapid progression to reverse upward.
This brings up my alternate interpretation, that silver & gold make one last fast spike down before they finally reverse. I have been working on the "double bottom" interpretation, namely, that silver & gold made a double bottom with the June & December 2013 lows, and that those would hold. Should gold fail to hold $1,270, it could easily fall $100. Will it? I don't know. If I could answer questions like that, I'd be sitting on the Riviera sipping expensive wine instead of writing this.
Next few days will tell the tale, and test your mettle. If you like bottom picking, you can buy dips here. If not, give it a couple of days to see how metals sort out.
Don't make a mistake. Even if metals make another spike down, you are watching both silver & gold turn up, and the end of the long correction. The rally that comes next will climb further and faster than anything we have seen so far.
Y'all really have little choice: either trust Mother Janet the Money Fairy, or trust silver & gold.
On 1 May 1707 was created the United Kingdom of England, Scotland, & Wales. It was part of a CENTRALIZING social trend that began about 1600 with the rise of the corporate nation state (as opposed to kingdoms) & sucked power away from localities and peripheries to the center. That 400 year trend has peaked with the ascendancy of a single world empire, the United States. The rest of our lifetime and for another several hundred years, power will flow AWAY from centers and back to localities.
You can readily see that in the United Kingdom. This fall Scotland will hold a referendum on independence and secession from the UK. Fifty years ago that would have been unthinkable -- treason even. Soviet empire fell apart, Catalonia wants free from Spain, Bavaria differs from Germany, Venice voted to secede from Italy, Normandy's not too happy in France, & it's the same all over the world. People are fed up with meddling, bureaucratic central governments. Oh, the trend change is only at the margins now, but it will move fast, even in the United States.
And not a moment too soon.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger