Weekly Conversations – JSMineset Premium

Posted at 12:23 AM (CST) by & filed under JSMineset Premium Content.

Dear CIGAs,

Bill and I talk one on one for approximately one hour weekly to review all markets of interest on JSMineset Premium.

This week we were honored to have Yra Harris with us. Yra as you might know was my floor partner in Chicago during those great years of the first bull market in gold. Yra is, in my opinion, the only person in this business today that I believe is the equal of Bert Seligman, Jesse Livermore, or the modern master of the universe, Paul Volcker.

Not only is he the top intellect of the most complex economic theory, but he is a master trader who never fights with the market. He has both disciplines mastered. So much so that I believe he is the most capable person to conservatively run a central bank for the benefit of society rather than in league with the Brothers for their profit and society’s financial demise. His greatness comes also in the form of his never thinking about it.

He made a great point considering our Fed to be addicts to the theory of model driven. Chairperson Yellen is shocked this week to see her beloved and trusted models starting to fall on their face. This is not a glitch, but rather the end of days for the lifetime of models who always refuse to see major structural changes.

The major structural change involves the advent of globalization combined with the greatest bubble in this history of markets called broken national debt trading at zero to negative interest rates. that combination is nuclear in its potential.

The question now is what will the model addicts do when they start coming apart one by one. Algorithms are a form of structured model whose recent success for the models and algos have seen their best days. The largest of the market fiddlers using them made them appear omnipotent because they were just mammoth market bullies.

What comes next when both start to misfire badly?

That is simple. The answer is market dislocation to historical proportions with history making volatility beyond anyone’s worst nightmare before the wunderkins pull the plugs to their super computers out of the wall.