Art Cashin: "What's left in the gas tank"?

In this recent interview over at King World News, long time market mavin Art Cashin is weighing in with cautions and warnings to those who will listen.  Read the article.  Cashin is long time head of USB trading floor operations for USB which has $650 Billion of other people's money worth of skin in the game.  He is not known for making panicky remarks.  It takes a lot of emotional control to trade successfully in the markets and the successful pros have long ago replace "gut instinct" with detailed analysis of hard data.  In other words, Cashin is not a crank.  He is not a nobody.  He is a trader's trader.

His main worry is "that the bond market may decide it’s not going to wait for the Fed.  It’s going to make some adjustments.  And if interest rates begin to move independent of the Fed, that could be a devastating problem."  Now let's decode that a bit.  When the bond market moves independently of what the fed wants, it's known as the fed "losing control of the bond market".   You know this is happening when interest rates begin to skyrocket despite soothing words from the fed on how they have it all under control.  As I have written many times, the cowboys sing and coo to the herd in order to get the herd to move in the desired direction but every once in a while the herd says "screw this" and the stampede begins.  At that point, expect the fed to step aside and let it play out or be trampled.  The fed cannot control the herd once the herd gets spooked.  History is very clear on this matter.

Cashin goes on to say that despite having thrown the kitchen sink at the problems since 2009, nothing is getting any better and, Cashin warns us, "some of the recent data has weakened".  Well, there's data and there's data.  Notice that Cashin doesn't indicate what data weakened, only that it has.  If it were something that is trivial I do not think he would embarrass himself by having this in print.  I don't know what data he is talking about it but the point is that he is indeed talking about it.  What else do I need to know?  Something critical, probably real jobs related data, is sliding away.

Cashin goes on to say that", [the current situation reminds him] of something that was written by Adam Smith in his book, ‘The Money Game.’  ... in it he talked about being at a party where the food and drink are absolutely magnificent and everybody is having fun.  Yet the veterans know that soon it will end, the music will stop, and the riders will come through the doors and there will be great trouble.  The only problem is the clocks have no hands.  We don’t know exactly what time it is.  That’s about where we stand today.”

So clearly, Cashin thinks that a day of reckoning is coming, not if but when.  And he worries that when it arrives there will be no tools left to kick the can down the road any further.  Now here's the good part and I apologize in advance for stealing most of Cashin's best quotes from the article:

“The problem is that many of the academics have been dismissive of gold, despite its millennial history of being a storehouse of value.  And they use Greenspan’s old phase about it being a ‘barbarous relic.’  Yet demand is always there.  The people in the villages and the towns know they have gold they can trust. 

If you look in Europe, you had wars where people marched in with different colored uniforms and gave you different colored money, and told you it would be good.  Only to have somebody march in with a yet another uniform and tell you, ‘That money is no good.  Use this money which is this (different) color.  And people always found ways to protect themselves by buying things like gold and precious stones, to protect what value they had.

If you note in Yellen’s testimony, one of the senators asked her, ‘Do you monitor gold?’  She answered, ‘I’m fully aware of it and I watch it.’  And I don’t remember who said it but it was quite a witty remark, but somebody said, ‘Yellen may not know about gold, but gold apparently knows about Yellen,’ because as she testified the price of gold rose.”

Those running the fiat currency scam have really only 1 credible enemy: gold.  Because gold is money (and they know it), it behaves as an alternative currency (no matter how many denials the fed puts up).  The Chinese and the Indians are hoarding gold not because it looks pretty but because it is money.  Since gold has very, very little industrial use, the price of gold cannot be blamed on "gougers" or "opportunists" who are just screwing the people by charging high prices for the metal.  If fiat currency were any good, people wouldn't care about gold.  People don't use gold in daily life.  They don't eat it.  Those who have it tuck it away where it does not earn interest.  

Because of all this, gold is the only thing on the planet that can call fiat currency a scam and a fraud.   If people needed gold to live day to day, government hacks would go after the gold industry for price gouging.  It would tell the people how horrible the greedy gold miners are for keeping their prices too high.  But anyone saying that will be laughed down immediately because gold is not a commodity, it is money.  So when gold goes up it is nothing more than a big yellow flag with a clear message on it: "fiat currency is a complete scam and so are those who administer a currency supply that is based on it". 

I suggest that you go to King World News and download the audio Interview with Cashin to be sure that you know his words were not taken out of context.