Silver Stackers Can End The Silver Manipulation And Stop The Criminal Banksters
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zerohedge.com / by Tyler Durden / 08/31/2015 09:52
Following this morning’s ISM Milwaukee disappointment, missing for the 8th month sof the last 9(printing 47.67 vs 50.00 exp and hovering at 2 year lows) with production and prices plunging, Chicago PMI just printed a slightly disappointing 54.4 (against expectations of 54.5). After last month’s surprise bounce, this slowdown suggests there is little to no momentum in any ‘recovery’ stemming from a Q2 bounce. Weakness under the surface is broad and as purchasers warned “failure of New Orders to materialize “within the next few weeks” could put firms at risk of being over-inventoried and curtail producton levels.” Perhaps most worrying though is the 4th consecutive contraction in employment… but the recovery?
news.goldseek.com / By Frank Holmes / 31 August 2015
Platinum prices were off 0.14 percent this week, holding in as the best performer of the precious metals group. Gold bullion, though down for the week also saw a pickup in the net long position by the non-commercial, according to data released by the Commodity Futures Trading Commission (CFTC).
Funds backed by gold saw the biggest inflows of assets in seven months on speculation that the U.S. Federal Reserve may hold off on raising interest rates. New York Fed Governor William Dudley said on Wednesday that the case for raising rates in September is increasingly doubtful after recent turmoil in global stock markets, particularly stemming from fears about weakened Chinese growth. Separately, Minneapolis Fed President Narayana Kocherlakota said he sees ways to lower interest rates further, citing asset-purchase tools.
According to France’s Economy Minister, the country plans to open new mines, including gold mines. Rarely does France make the news concerning gold mining; perhaps this is a sign of a greater interest in hard assets versus currency reserves.
Silver did not fare as well as gold, finishing the week down 4.79 percent. The net long position in silver only ticked up modestly while total known holdings in silver ETFs actually fell 0.14 percent. Palladium was much weaker than platinum, down 2.50 percent and the net long position actually contracted this past week. Perhaps the markets have seen a near-term peak in car sales.
market-ticker.org /by Karl Denninger / 2015-08-31 05:30
I read this twice before realizing the last name of the author perfectly fit the so-called “fix” for 2008 — and the premise that “they could do that again.”
By the end of the week, stocks, currencies and commodity prices weren’t crashing any longer but financial markets were far from settled. Over the past 10 days, markets have plummeted, paused, recovered and fallen again. There’s little sign the anxiety is lifting.
Until recently investors had been preoccupied with the weakness of the post-2008 recovery. Now some are asking whether 2008 might come round again. It’s an especially disturbing possibility because, on the face of it, the policy options for responding to another slump are fewer than last time. Governments have run big budget deficits to support demand, so there’s less so-called fiscal space for a new round of stimulus, or so the thinking goes. Interest rates are still at zero, and even the advocates of quantitative easing recognize that it ran into diminishing returns. What’s left?
Clive goes on to raise the old flag once again; that the “effective remedies” could once again be trotted out.
There’s a problem with this premise: They didn’t work the last time.
My evidence? All of those measures are still in place!
If they were effective then they could have been withdrawn. They were not, any more than opiates are effective at resolving the source of pain. Oh sure, opiates maskpain (at the cost of making you stoned out of your mind!) but they don’t fix whatever is causing the pain itself.
What’s worse, of course is that in order to maintain their effectiveness you must continually increase the dose of these monetary instruments exactly as tolerance does the same thing with opiates. In the case of opiates you eventually reach a “coffin corner” as there is a depressant effect on the body that has a hard upper limit; when you reach it the user’s respiration and heart stop, and that’s the end of the show. As the effective dose ratchets upward you eventually reach the point where either the user accidentally takes too much and dies, or worse reaches the point that the effective and lethal doses cross and he dies that way.
In the case of so-called “monetary stimulus” the facts are in at this point — the 2008 nostrums did not work. Yes, the stock market went back up. But here’s the rub — they “worked” by increasing the debt in the system, and since GDP is computed in units of currency you must back out of the GDP equation the additional units that were added.
armstrongeconomics.com / by Martin Armstrong / August 31, 2015
The Financial Times over the weekend reported that Beijing would abandon its large-scale share purchases. This story sparked declines in China’s A-listed shares, although the Shanghai Composite pared losses to close 0.8 percent down. Then there is Jackson Hole and how amazingly people are stupid and do not understand what the Fed has been saying that they must get back to “normalization” of interest rates. The people who pretend to be pundits in the know, keep talking about unemployment, jobs, inflation, as if the Fed were still guided by Keynesian economics. The Fed is trapped and has lost all ability to return to Keynesian economics unless it raises interest rates to normal levels. We have a massive debt crisis coming from state, municipalities, and pension funds. They all needed “normal” interest rates to survive.
zerohedge.com / by Tyler Durden / 08/31/2015 09:37
It’s a busy week for the market, and not to mention the Dow Jones-dependent Fed, which will have to parse through reports on Chicago PMI, Construction Spending, ISM (Mfg and Services), ADP, Productivity and Labor Costs, Factory Orders, Trade Balance, and the weekly highlight: Friday’s Jobs reports.
The key event US this afternoon is the August Chicago PMI along with the ISM Milwaukee and Dallas Fed manufacturing activity reading.
It’s a busy early session in Asia on Tuesday with August PMI readings for China and Japan, along with capex spending and vehicles sales data in the latter. The RBA decision is also due in Australia. In Europe on Tuesday we get the final August manufacturing PMI’s for the Euro area, Germany and France, along with unemployment data for the former. In the UK we’ll get mortgage approvals, net consumer credit and the manufacturing PMI. In the US on Tuesday we’ve got ISM manufacturing and prices paid, IBD/TIPP economic optimism survey, construction spending, manufacturing PMI and vehicles sales data all due.
We start in Europe on Wednesday when we get Euro area PPI. This is followed up in the US with the ADP employment change reading, nonfarm productivity, unit labour costs, factory orders and the ISM NY. The Fed is also due to release the Beige Book on Wednesday.
Reports are pouring in that the politically-correct politics surrounding the term ‘white privilege’ are gaining traction at many universities.
Plenty of professors at various colleges across the nation are confronting students with racial and ethnic issues, and decimating their grades if they aren’t sensitive enough to the use of delicate terminology.
Multiple professors at Washington State University have explicitly told students their grades will suffer if they use terms such as “illegal alien,” “male,” and “female,” or if they fail to “defer” to non-white students.
According to the syllabus for Selena Lester Breikss’ “Women & Popular Culture” class, students risk a failing grade if they use any common descriptors that Breikss considers “oppressive and hateful language.”
At another school, a course in comparative ethnic cultures docks students who fail to recognize “white privilege” and use terms like “illegal alien” to describe people who circumvented immigration laws and came to this country without permission.
zerohedge.com / by Tyler Durden / 08/31/2015 08:55 -0400
Last weekend, someone at SunGard Data Systems tried to implement an upgrade to the accounting system that Bank of New York Mellon uses to calculate NAVs for the mutual fund and ETF industries. Well wouldn’t you know it, there was a “glitch” after which something became “corrupted” (so, kind of like what happens inside the Beltway on a daily basis) and so, come Monday, investors couldn’t get accurate assessments of the fair value for the funds.
Speaking of last Monday, if memory serves us, something notable happened in equity markets… oh, that’s right, the Dow crashed 1,000 points out of the gate in a harrowing bout of flash-crashing, circuit breaker-tripping mayhem and that, according to SunGard, is completely unrelated to the fact that the company still, as of Sunday night, had not calculated NAVs for all of the affected funds. WSJ has more:
Bank of New York Mellon Corp.’s chief executive warned clients that his firm might not be able to solve all pricing problems caused by a computer glitch before markets open Monday, the latest delay in an unprecedented outage that has frustrated investors and prevented nearly 50 fund companies from providing accurate values for their holdings.
It “has taken far longer than any of us would have expected,” CEO Gerald Hassell said in a Sunday night conference call.
acting-man.com / By Pater Tenebrarum / August 31, 2015
A Classical Rebound from Oversold Extremes
Beginning on Wednesday last week, the stock market started a rebound from extreme oversold conditions that was just as volatile as the sell-off that preceded it. Such a rebound was to be expected, but unfortunately it cannot really tell us what is likely to happen next. In the meantime, the S&P 500 Index has reached a first level of resistance, so we should soon know more.
A secondary lateral resistance level is a little further above, and is likely to be reached if the first one gives way:
Sentiment and Positioning Data
All sorts of extreme short term readings were reached around the lows, and last week was inter alia marked by numerous “selling climaxes” (i.e., stocks reaching new lows for the move, and then ending the week above the levels they started it at). Nevertheless, several short term indicators eased off from their extremes and the short term optimism indicator briefly went all the way to its opposite boundary (“extreme optimism”), but then dipped back again on Friday:
Many options-related indicators have basically ended the week in the middle of their recent ranges as well, but it is worth noting a few details in this context. For instance, Mish reports that put premiums in Shanghai havereached record highs against call premiums in recent days. He rightly points out that this is a contrary indicator,except if a crash wave is underway. The Shanghai Composite hasn’t made much progress yet from its lows:
If the “normal” interpretation of the options skew in Shanghai is applicable (which has to be accorded the higher probability), then Chinese stocks should soon begin to exhibit some strength in the short term.
In the US markets, we see options-related data at levels that are historically high, but only middling compared to recent extremes. To this we would add a personal observation: we are closely watching short term options on leveraged ETFs (we don’t recommend playing them – it is an activity on the gambling side of short term trading.
zerohedge.com / by Tyler Durden / 08/31/2015 10:03
The current VIX level of 26 is equal to the median VIX level over the last three recessions. As Goldman warns, while extreme VIX levels periodically occur, our analysis shows that VIX levels in the high-twenties to low-thirties for extended periods of time are rare outside of recessions. Furthermore, this was foreseeable as equities were ignoring potential warning signs from other asset classes prior to the recent sell-off.
Via Goldman Sachs,
While extreme VIX levels periodically occur, our analysis shows that VIX levels in the high- twenties to low-thirties for extended periods of time are rare outside of recessions. The second quarter revised US GDP print was 3.7% and our tracking estimate for Q3 currently stands at 2.3%, which biases us toward a mean reversion to lower VIX levels.
High-twenties to low-thirties VIX equates to recession volatility
On the economic front: Many investors have argued that VIX levels in the high-twenties to low-thirties are justified. We argue that while periodic spikes should be expected, it is hard to sustain high VIX levels outside of recessions. A few simple statistics:
Recession volatility: The median level of S&P 500 realized volatility in a recession month has been 17.5 back to 1929.
Non-recession volatility: The median level of realized vol in a non-recession month has been 11.4.
VIX over the last three recessions: VIX levels go back to January 1990. Since that time there have been three recessions. Average VIX levels in the first two recessions (1990-1991, 2001) were 25 and 26 respectively. The worst of the worst was of course the Great Financial Crisis. Average VIX levels in the 2008-2009 recession were 34.
marctomarket.com / Dr. Win Thin and Ilan Solot / August 31, 2015
EM is starting the week with a weak tone, though the panic of last week has abated for now. The bounce in commodity prices seems to have run out of steam, which isn’t helping market sentiment. Fed Vice Chair Fischer’s comments from Jackson Hole has put the September FOMC meeting back into play, and firm US jobs data Friday would support notions of a Fed liftoff then. We remain bearish on EM assets for now given the negative global backdrop.
Within EM, the idiosyncratic risks all seem biased to the downside as well. China has kept the yuan fairly stable since the mid-month devaluation. However, mainland equity markets remain under pressure and the Shanghai Composite is now down about 1% YTD. China reports PMI readings Tuesday (both official and Caixin) and both are expected to be below 50. While more stimulus is expected, the economic outlook is still dimming. Brazil and Turkey continue to face mounting political risk, and both are facing stronger rating downgrade risks too.
Korea reports August CPI Tuesday, and is expected to remain steady at 0.7% y/y. This is well below the 2.5-3.5% target range. Core CPI is seen rising 2.1% y/y vs. 2.0% in July. BOK’s last move was a 25 bp cut to 1.5% back in June, and could cut again this year. However, recent weakness in the won is taking some pressure off the BOK to cut imminently. Next policy meeting is September 11, and steady policy is expected then. Korea also reports August trade Tuesday, with exports seen at -6% y/y and imports at -15% y/y. Korea reports July current account data on Wednesday. The external accounts have improved despite weak exports, as imports have been contracting even more.
Last week, we called for a rising gold to silver ratio. On Wednesday, this ratio hit nearly 80 before backing down a bit by the end of the week. It did not happen with a rising price of gold, rather it was a function of a falling silver price. On Wednesday, the silver price was down $1.22, or -8%. By the end of the week, it had rebounded along with the gold price.
We said we thought silver was overpriced at $15.31. Read on, for our take on $14.53. But first, let’s discuss the concept of the fundamental price.
We have been discussing fundamental prices of gold and silver, and contrasting them every week with the market price. This is how we have known that the price of silver would fall since the inception of this report a few years ago (and prior to that). This is why we thought that the gold to silver ratio would likely hit 80 or more (as it did on August 26). It should be noted that most others were expecting silver to outperform gold.
The fundamental price is not a timing mechanism, but a valuation metric. It tells us which way supply and demand forces are applying pressure to the price. Sometimes, it is telling us the price is far from its fundamental levels. We recall the summer of 2013 when there was a ferocious rally in the price of silver from $19 to $25. That rally flew in the face of the fundamental valuation of the metal. We knew that the $25 level would not hold, despite the charts and the excited cheering from the silver bugs.
zerohedge.com / by Tyler Durden / 08/31/2015 08:47 -0400
After last week’s epic squeeze in crude, overnight weakness has accelerated dragging WTI back to a $43 handle. This comes after EIA (based on improved reporting) reduced the H1 2015 production data by 130,000 barrels per day.
Which is odd, as Reuters reports,
The U.S. government on Monday released new data on domestic oil production for the first half of this year based on improved methodology, showing output was as much as 130,000 barrels per day (bpd) lower than first estimated.
news.goldseek.com / By: Steve Saville, The Speculative Investor / 31 August 2015
After China’s government announced a small reduction in the Yuan’s foreign exchange (FX) value early last month, US Presidential aspirant Donald Trump immediately leapt onto the nearest available podium and exclaimed:
“They [the Chinese] continuously cut their currency. They devalue their currency. And I have been saying this for years. They have been doing this for years. This isn’t just starting. This was the largest devaluation they have had in two decades. They make it impossible for our businesses, our companies to compete. They think we’re run by a bunch of idiots. And what’s going on with China is unbelievable, the largest devaluation in two decades. It’s honestly…a disgrace.”
The fact is that even after its recent “devaluation”, relative to the US$ the Yuan is up by 8% over the past 5 years and 30% over the past 10 years. Here’s a chart showing the performance (a rising line on this chart indicates a strengthening of the Yuan relative to the US$). Take a look at this chart and then re-read the above Trump comments.
Is Trump really that poorly informed about what’s going on? Perhaps, but probably not. It’s clear that Trump has become the consummate populist — someone who is willing to say anything that he thinks will strike a chord with a large mass of voters, even if he knows that what he is saying is complete nonsense.
ISIS have released a new hour-long video, showing off their latest propaganda tool — their very own coin currency.
The video, which includes a dreary and distorted history of world economics, shows the smelting of gold, silver, and copper coins.
Dramatised by clips from Hollywood war films, the film accuses the United States of “confiscating Americans’ real wealth through an executive decree” with the introduction of the Gold Reserve Act in 1934.
Yet despite their glorification of their new currency, ISIS have no other means to pay their band of jihadis except through the use of U.S. dollars. …
zerohedge.com / by Tyler Durden / 08/31/2015 08:27 -0400
One week ago, just after the S&P crashed and when – as predicted – a battery of central bank intervention from China to Dudley jawboning, would unleash the biggest 2-day surge in the Dow Jones ever recorded, Dennis Gartman was unpleasantly out of stocks. In fact, the daily financial TV fixture whose daughter, Courtney, is a CNBC Fast Money line producer, could barely contain himself from telling subscribers (?) to his newsletter that now is the time to panic. To wit:
STOCK PRICES HAVE A LONG WAY TO FALL, WE FEAR!: This is the S&P in monthly terms and now that this first trend line has been broken we fear that the second one drawn here may eventually be put to test over the course of the next several months.
Over the past few days, it’s quite evident that alot has changed on the global financial landscape. However, there have recently been a few developments in China, which further signal that everything we know is about to change.
Several weeks ago, I made the case that China had been taking certain measures to put pressure on DC to give them more hefty weighting in the IMF, particularly regarding SDR inclusion. Now that it has been confirmed that SDR inclusion“will be put off for at least a year”, China has decided to take matters into its own hands…by burying two twin fangs into the US Dollar standard.
news.goldseek.com / Julian D. W. Phillips, Gold and Silver Forecaster / 31 August 2015
Gold Today –On Friday New York closed at $1,134.40 up $10.30. The dollar was stronger at $1.1335 at the close up from $1.1496, against the euro, with the dollar Index stronger at 96.07 up from Friday’s 95.19. Because of the Bank Holiday in the U.K. no LBMA gold price was set today. Ahead of New York’s opening, gold was trading at $1,132.80 and in the euro at €1,010.80.
Silver Today – The silver price closed at $14.59 up 41 cents over Friday’s close in New York. Ahead of New York’s opening today it was trading at $14.53.
Gold (very short-term) The gold price will consolidate today in New York.
Silver (very short-term) The silver price will consolidate today in New York.
The global financial markets have been sensitized to more volatility, from now on. When a rate hike in the States comes, we will see a different pattern to the one we saw last week. Instead of bonds acting as a safe haven for investors both bonds and equities will fall, cutting off a key market for retreat. This removes Treasuries as a ‘safe haven’. Here are the fundamental prospects for gold:
In the global gold market there have been +15 tonnes of gold bought into the SPDR gold ETF. On COMEX we have seen hedge funds and speculators cover more than 125 tonnes of gold short positions but only increasing 50 tonnes of long positions in the last month. More importantly COMEX added 281 tonnes of gold to stock up on gold, available for delivery [as stocks were at very low levels].
Following, as Reuters reports,Ukraine’s parliament on Monday voted for constitutional changes to give its eastern regions a special status that it hopes will blunt their separatist drive…
At a rowdy session, a total of 265 deputies voted in favor in the first reading of a “decentralization” bill, backed by President Petro Poroshenko’s political bloc and his government – 39 more than that required to go through.
But many coalition allies, including former prime minister Yulia Tymoshenko, spoke against the changes and it is open to question whether Poroshenko will be able to whip up the necessary 300 votes for it to get through a second and final reading later this year.
August has been a tumultuous month with stocks seeing sharp losses and gold has again protected investors from sharp losses. Gold has had a 3.36% gain for the month so far (see table below).
Gold is on track for the best monthly advance since January after most market participants were surprised by the devaluation of China’s currency. This has fueled concerns about further currency wars and about the world’s second-largest economy and indeed the global economy may be vulnerable to a recession – potentially a severe one.
Gold exchange-traded fund holdings rose to a one-month high last week on safe haven demand. The MSCI All-Country World Index of equities is headed for the worst monthly performance since May 2012 and a gauge of 22 raw materials was set to decline for a second month.
paulcraigroberts.org / Paul Craig Roberts / August 31, 2015
Judiciary Branch Has Self-Abolished
The US no longer has a judiciary. This former branch of government has transitioned into an enabler of executive branch fascism.
Privacy is a civil liberty protected by the US Constitution. The Constitution relies on courts to enforce its prohibitions against intrusive government, but if the executive branch claims (no proof required) “national security,” courts kiss the Constitution good-bye.
Federal judges are chosen by the executive branch. The senate can refuse to confirm, but that is rare. The executive branch chooses judges who are friendly to executive power. This is especially the case for the appeals courts and the Supreme Court. The Justice (sic) Department keeps tabs on district court judges who rule against the government, and these judges don’t make it to the higher courts. The result over time is to erode civil liberty.
Recently a three-judge panel of the US Appeals Court for the District of Columbia ruled that the National Security Agency can continue its mass surveillance of the US population without showing cause. The panel avoided the constitutional question by ruling on procedural terms that NSA had a right to withhold the information that would prove the plaintiffs’ case.
zerohedge.com / by Tyler Durden / 08/31/2015 08:05 -0400
Back in April, when Bill Dudley first admitted that the Fed’s rate hike will be “shaped party by the market reaction”, we first coined the term Dow Data Dependent. Some mocked this assessment, but 5 months later it has proven to be spot on, following Bill Dudley’s repeat appearance in which he cautioned that a September liftoff looks “less compelling”, catalyzing the biggest two-day surge in the Dow Jones in history. Today, Citi admits that the “Dow” is precisely the only “data” point that the Fed cares about.
From Citi’s rates strategist, Jabaz Mathai:
All the components for the US growth index have been reasonably strong over the last few months, and this was reinforced by the higher than expected revised second quarter GDP estimate released yesterday (3.7% vs. a Bloomberg median survey estimate of 3.3%). On the other hand, the global growth index is treading water. The Fed has to decide whether to hike based on domestic economic strength and the unsuitability of zero rates and super accommodative policy in the context of current growth or to hold back to better understand the disinflationary impact of slower external growth.
marctomarket.com / by Marc Chandler / August 31, 2015
After a tumultuous week, the global capital markets are struggling to stabilize. Chinese equities were under sharp downward pressure following news reports that the large-scale intervention was to end. However, stocks roared back in late dealings, and other reports indicated that brokerages were being asked to boost their contribution to the equity market rescue fund by another CNY100 bln (~$15.7 bln).
Meanwhile, the message from Jackson Hole was the officials in US, Japan and Europe expect inflation pressures to increase. The signal from Fed officials was a rate hike this year remained likely, and a move in September could not be ruled out.
The macro economic data seemed less important in comparison. Japanese data was simply disappointing. July industrial output was expected to rise by a minor 0.1%, but instead it fell 0.6%. This pushed the year-over-year rate to 0.2% from 2.3% in June. The consensus was for a 0.8% increase. Housings starts rose 7.4% in July year-over-year. The consensus expected an 11.0% increase after 16.3% in June. More broadly construction orders collapsed to -4% in July (year-over-year) after a 15.4% rise in June.
DELRAY BEACH, Florida – It’s hot in Florida. Steamy hot. Hair curls and bodies go limp. The “relief rally” continued on Thursday. All over the world, stocks gained. So did oil and commodities. The Dow was up 369 points – a 2.3% move. Chinese stocks were up by about 5%. Why?
U.S. GDP numbers for the second quarter came out higher than expected. The economy grew by an annual rate of 3.7%. And influential New York Fed chief William Dudley said the argument for a rate increase in September was “less compelling.”
Oh, ye of little faith… fear not! Things are happening just as they should. It is the end of summer. Markets are giving strong hints of things to come in the fall. Like Vesuvius, a plume of smoke rises… and a cloud of dust hangs over the markets. The economic earth rumbles… and animals take flight.
zerohedge.com / by Tyler Durden / 08/31/2015 07:40 -0400
The deadly chemical blast in the Chinese port of Tianjin was a preventable catastrophe in which more than 100 people lost their lives thanks in part to what looks like the political connections of the warehouse’s owners and although an upfront, transparent investigation and honest assessment of the environmental impact is likely the only way to safeguard the public and ensure it doesn’t happen again, no one believes the Chinese government has the will to conduct such an investigation.
But whatever you do, do not say any of the above if you live in China.
Similarly, China’s stock market collapse was an entirely preventable financial catastrophe caused by the unchecked accumulation of margin debt and the encouragement of speculation, and the bursting of the equity bubble which began in June has been nothing short of a debacle that’s led to international condemnation and accusations that, even in a centrally planned world, Beijing’s particular brand of intervention is so egregious as to stray outside the bounds of manipulated market decorum.
But if you live in China, don’t say that either.
Over the last two months there were signs that Beijing would soon resort to outright, sweeping censorship as it relates to both the stock market and the Tianjin blast. For instance, in July, phrases like “rescue the market” were reportedly banned and in the wake of the Tianjin disaster, hundreds of social media accounts were shut down for spreading “blast rumors.”
"There is NO market anywhere on the planet where the amounts of futures dwarf the physical product so overwhelmingly than in silver. Why is silver so important? Why has it been bludgeoned so badly and even priced below the cost of production? You must understand how small the silver market is. Total global production is less than $15 billion per year …"but", silver cannot be left alone because high silver prices do not jibe with low gold prices. …And gold MUST be kept down and out of the limelight because high gold prices do not fit with low interest rates …which are an absolute must in an effort of reflation. You see, in no way can interest rates be allowed to rise with the amount of global debt outstanding. Higher interest rates will crush the debt outstanding, the silver market is at the VERY BEGINNING of the "food chain" that keeps the lid on interest rates. I believe the Chinese hold this market in their back pocket paid for with "pocket change", they will use it at their own discretion!" - Bill Holter