Will The Philadelphia Refinery Explosion Send Gas Prices Skyrocketing?

By Michael Bastasch – Re-Blogged From Daily Caller

Explosions at the Philadelphia Energy Solutions (PES) refinery, the largest refinery on the East Coast, sent gasoline futures soaring, but experts say it’s still too early to know the full effects of the incident.

“It is too early to know the full impact the fire at the PES facility will have on summer gas prices and for how long for East coast motorists,” Jeanette Casselano, spokeswoman for the American Automobile Association (AAA), told the Daily Caller News Foundation in an email.

The fire, which started in a butane vat around 4 a.m., set off a series of explosions that rocked neighborhoods miles away. Emergency responders had the fire under control by 7 a.m. and no injuries have been reported.

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Safe Haven Demand As Rising Risks

Gold surged over $1,436/oz this morning, it’s highest level in almost six years as an escalation of US sanctions on Iran added to heightened geopolitical uncertainty and uncertainty in global markets.

Market participants are also concerned about the G-20 summit this weekend where it is hoped that President Donald Trump and China’s Premier Xi Jinping will meet to discuss the deepening trade war.
Gold has closed above $1400 for first time since 2013 as investors diversify into safe haven gold to hedge the growing global risks including the risk of much looser monetary policies again and of zero percent and negative interest rates.

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Truth, Lies And Inflation

By GE Christenson – Re-Blogged From Gold Eagle

Christopher Whalen wrote “Trump is Right to Blow Up the Fed.” He stated:

“Anybody who cares to read the 1978 Humphrey Hawkins law will know that the Fed is directed by Congress to seek full employment and then zero inflation. Not 2 percent, but zero. Yet going back a decade or more, the Fed, led by luminaries such as Janet Yellen and Ben Bernanke, has advanced a policy of actively embracing inflation.”

From the Federal Reserve’s web site:

“The Congress established the statutory objectives for monetary policy—maximum employment, stable prices, and moderate long-term interest rates—in the Federal Reserve Act.”

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The Bearish Momentum In Oil Accelerates

By Nadia Simmons – Re-Blogged From Silver Phoenix

Oil price is melting down like there’s no tomorrow. How else could we describe the bloodbath? Fresh monthly lows being hit on a daily basis. Slicing through important supports. With such a weak close to the trading week, how will black gold fare the next one? Clearly, the most recent Mexico tariff announcement hasn’t helped and it’s widely felt in the markets, including this one. Better news on the horizon?

Let’s take a closer look at the chart below (charts courtesy of http://stockcharts.com

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Nasdaq De-FAANGed?

By Zachary Mannes – Re-Blogged From Silver Phoenix

We generally chart the regular NASDAQ — the NDX, QQQ, and the futures — but when you consider that a mere five momentum names, affectionately given the acronym “FAANG,” comprise nearly 40% of the weighting of the entire index, a glance at the Equal Weight version is not a bad idea. I prefer the First Trust  (QQEW) to the Direxion (QQQE) as it seems to chart slightly cleaner and the “EW” is easier to remember.

Watching for nuanced differentiation in the patterns between the QQEW and NDX, it is possible to see the potential for the former to lead a bit. For example, back in August/September of 2018, QQEW marked a divergent high. More recently, the QQEW began to count more like the blue 5th wave extension of (5) of Primary Wave 3 before the NDX shifted from it’s “(B)” wave.

More importantly, though, is that fact that the Equal Weight does not get pulled to such price extremes by the disproportionate momentum of a scant few stocks. The Primary Wave 3 in NDX has stretched all the way to the 223.6% Fibonacci extension as measured in log-scale off the July 2010 low for Primary 2. By contrast, the QQEW hit a more perfect 161.8% Fibonacci extension for it’s Primary wave 3 top.

The disproportionate extension, though, also appears to affect the downside corrective moves.

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Nonmonetary Cause Of Lower Prices

By Keith Weiner – Re-Blogged From Gold Eagle

Over the past several weeks, we have debunked the idea that purchasing power—i.e. what a dollar can buy—is intrinsic to the currency itself. We have discussed a large non-monetary force that drives up prices. Governments at every level force producers to add useless ingredients, via regulation, taxation, labor law, environmentalism, etc. These are ingredients that the consumer does not value, and often does not even know are included in the production process. However, these useless ingredients can get quite expensive, especially in industries that are heavily regulated such as health care.

What Force Pushes Prices Down?

There is another non-monetary force, and this one is pushing prices down. Producers are constantly finding useless ingredients that they can remove. In the research for his Forbes article on falling wages, Keith discovered that dairy producers found ways to eliminate 90% of the ingredients that go into producing milk between 1965 and 2012. For example, they reduced by two thirds the labor hours that support each cow.

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The 2 Faces Of Inflation

By Keith Weiner – Re-Blogged From Gold Eagle

We have a postscript to last week’s article. We said that rising prices today are not due to the dollar going down. It’s not that the dollar buys less. It’s that producers are forced to include more and more ingredients, which are not only useless to the consumer. But even invisible to the consumer. For example, dairy producers must provide ADA-compliant bathrooms to their employees. The producer may give you less milk for your dollar, but now they’re giving you ADA-bathroom’ed-employees. You may not value it, but it’s in the milk.

On Twitter, one guy defended the Quantity Theory of Money this way: inflation (i.e. monetary debasement) is offset by going to China, where they don’t have an Environmental Protection Agency. In other words, the Chinese government does not force manufacturers to put so many useless ingredients into their products as the US government does.

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