Rhodium

Rhodium Prices Higher as ETC and ETF Funds Set to Launch (26 May 2011)

(14 Dec 2011) What have rhodium prices done since the ETF launch?  Well they have gone down.

We are approaching $1400 USD an ounce.  I imagine that industrial users of rhodium are just happy as clams that they can buy raw materials so much cheaper than before.  I had occasionally looked at rhodium prices in relation to other precious metals because I believed that it was not as heavily influenced by massive speculators and hedgers.  But I now doubt that to be true.  I think the the formation of ETF funds linked to commodities simply enables high-frequency traders and algorithms to better latch onto the underlying price discovery system, and once liquidity is achieved it allows them co-opt the price discovery mechanism in their favor.

Federal Debt Ceiling

As we will begin to see over the next few weeks we are watching a slow motion train wreck called the Federal Debt Ceiling.  Here are a few stories that will appear to be psychic (when viewed in retrospect)

1. Treasury Ending issuance of SLGS as of Friday
2. Treasury Auctions will put debt over the debt ceiling by Monday 5/15/2011
3. Heritage Foundation - Says Sell Federal Assets to Balance Budget, like Treasury Gold in Fort Knox? 5/16/2011
4. America's Deepening Default Chasm (5/22/2011 - FT - complete via google jump)
5. Policy Fatigue.  Accidents can happen?  Do you want these politicians driving the US economy? (6/9/2011)
6. US Treasury Secretly Weighs Options to Avert Default (7/7/2011) A small team of U.S. Treasury officials is discussing options to stave off default if Congress fails to raise the debt limit by the Aug. 2 deadline
7. A Trillion is a Big Number (9/5/2012) We just broke through $16tn debt.  Rick Santelli summarizes, in words and tables that any 6 year old girl could comprehend, why "a trillion is a big number"