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As long-time readers know, I am fascinated by HUMAN NATURE.

It takes a lifetime to get a basic understanding of how mankind thinks, but even years of observation can’t predict many of the decisions people make.  Irrespective, I’ve done my best to interpret what I’ve observed, as such analysis have served as the most powerful tool in my decision-making process.  Particularly during terrible economic conditions, such foreknowledge of man’s tendencies can mean the difference between financial life and death.

This morning, I finished Ayn Rand’s Fountainhead, the beautifully-written precursor (by 14 years) of Atlas Shrugged.  I can imagine an idealistic Alan Greenspan reading it circa 1950, pondering, as I, the evils of human collectivism and tragic mistakes such thinking spawns, such as fiat currency.  Back then, I’m sure he felt as strongly as I do now, but didn’t yet understand HUMAN NATURE, particularly that the “dark side” would be powerful enough to lure him to a life of deceit, and consequently divestiture of his most fervent beliefs.

In the book’s Afterward, Rand describes the character of Ellsworth Toohey as a “noted economist, critic, and liberal,” and more specifically, a “Noted anything and everything,”  which made me think about mankind’s collectivist tendency to create consensus beliefs to hide behind, and subsequently “Noted” leaders to publicly espouse such beliefs.  Politicians, bankers, and the media, the “troika” of evil in today’s society, are comprised of experts in corralling the public zeitgeist and converting it to tangible propaganda, whereas only the most INDEPENDENT, FREE-THINKING individuals can escape their influence.

My readers understand the importance of critical thinking, particularly in today’s era of historical change in the economic, political, and soon-to-be social backdrop of the Western world.  TPTB are well-aware of this inflection point, and thus utilize increasingly draconian methods of influence to maintain order.  This saga was played out brilliantly in Rand’s Atlas Shrugged, and we all know how that ended…

Today, I initially intended to write about ramifications of the MF Global collapse, but that discussion was put on hold following yesterday’s ugly market action.  I will get to the horrific Cartel attack shortly, but my mind is focused more on the PPT lately, as described in recent RANTS.  The title of this RANT was inspired by last night’s Denver Broncos comeback, but there was nothing ILLEGAL about Tim Tebow running over the Jets, as when the “President’s Working Group on Financial Markets” runs roughshod over stock exchange rules, and more importantly the spirit of free markets.

I’ve discussed in detail my observation that the PPT’s mandate to ‘protect stock markets in times of crisis’ was exceeded circa 2000, not un-coincidentally when the U.S. economy peaked.  The 9/11 tragedy was the PPT’s first full-scale test, and since that time I have observed it increase the group’s scope in virtual lockstep with the decline of America’s economy, dollar, and reputation.  The two most important tactics in their playbook are early morning support of Dow Futures to “set the tone” for the day and “HAIL MARY” goosing at the end of the day, to “instill confidence” that all bad news has been discounted, and secondarily cause the collectivist media to report as such.

As angry as it makes me to watch the Cartel blatantly attack PAPER gold and silver prices as yesterday (and today), I find that it doesn’t bother me much anymore, as I know my PHYSICAL gold and silver coins sit quietly in a vault, as unchanged in value as untarnished by the elements.  To the contrary, mining stocks were violently decimated yesterday (and today), creating REAL losses in brokerage accounts that may or may not ever be recovered; only time will tell on that note.

By the way, while the world fretted yesterday about imminent financial collapse, and mining stocks plunged by 5%, on average, thanks to the Cartel’s NAKED SHORT SELLING ALGORITHM PROGRAMS, Miles Franklin saw strongdemand for PHYSICAL gold and silver.  Yes, 2011 is turning out to be a MAJOR inflection point in the now eleven-year-old PM bull market, as for the first time investors are AGGRESSIVELY ACCUMULATING PHYSICAL metal on EACH and EVERY DIP.  Miles Franklin had one of its strongest months in YEARS following the September DEATH STAR ATTACKS that took PAPER gold and silver down by 20% and 40%, respectively, in a matter of weeks, yielding sharply higher PHYSICAL premiums.  In fact, I believe five of its best ten days EVER occurred during that period, symbolizing that more and more investors are THINKING CRITICALLY and INDEPENDENTLY, seeing through the façade into what’s really occurring in the world.

I’ve written nearly every day this week of my experiences watching PPT operations in the early morning hours.  Today, I walked into the gym to see Dow Futures at +40 points, YET AGAIN turning positive the day after a sharp decline.  If there is ONE “sixth-sigma” phenomenon to focus on in the markets, it is the near GUARANTEE that Dow Futures will be called higher after a major market decline, and today was no exception.  Not only that, within MINUTES it jumped to +108, recovering nearly ALL of yesterday’s losses despite ZERO news, while gold of course was mired near yesterday’s lows.

The only material news last night was that the Shanghai futures exchange raised margins on silver, once again explaining why silver was trashed so violently yesterday.  Why silver margins would be increased when silver has been trading in a tight range for weeks is beyond me, particularly AFTER such a huge smash just hours before.  But then again, following “D-DAY” a year ago, ALL Cartel activities have been stepped up to epic proportions, particularly its manipulation of margin requirements to create PAPER liquidations.  “D-DAY” represented the first INTRADAY silver margin increase EVER, and thereafter we have seen a cornucopia of sinister margin increase strategies, particularly the new tendency to raise PM margin requirements AFTER gold and silver prices fall.  Remember the SUNDAY NIGHT PAPER SILVER MASSACRE, when margins were increased FIVE TIMES in response to silver’s attack on its all-time high price of $50/ounce?

Silver plunge EXPLAINED, SHANGHAI hikes silver margins

And, by the way, the reason the Cartel needed to PULL ITS BIDS on a SUNDAY NIGHT in early May with the Chinese markets closed, and then falsely announce that bin Laden had been killed (as if that means anything), was that in a normal market surging to ALL-TIME HIGHS, a margin increase would injure the SHORTS, not the longs, as the SHORTS would be the ones receiving margin calls!  Of course, when the shorts (JP Morgan) are GOVERNMENT-BACKED, they are not issued margin calls, and even if they were, the government would just print the money to meet them.  Conversely, “the shorts” ATTACK viciously with illegal, NAKED transactions (as they did Sunday night, May 1st, and YESTERDAY), and THEN margins are raised to DESTROY the longs stupid enough to take them on.  You’d think the CONSTANT LOSSES traders generate in this game of “rinse and repeat” would prevent them from still playing, but they’re still there, albeit in lesser volumes.  But don’t worry, Open Interest continues to decline for this reason, and the MF Global fiasco will only contribute to this trend in the coming weeks and months.


OK, so while Dow Futures were being goosed yesterday morning despite crumbling European markets, gold was enjoying its typical early morning walk down for no apparent reason.  The Dow/Gold directional ALGOs were on, only allowing PAPER gold to tick up when the Dow was rising, but at only half the rate, as opposed to when Dow Futures decline, at which point gold prices fall at twice the rate.  Same pattern as I’ve watched for years, as well as the incredibly irritating tendency for the gold price to tick down essentially EVERY time it is shown on the CNBC screen.

Anyhow, with the European crisis once again reaching DEFCON 1, the Cartel used EVERY ONE OF its tricks yesterday, including EVERY TOOL DOCUMENTED in my “Cartel primers” published in June, the “2010 and 2011 COMEX Manipulation Pictorials,” links below:



As you can see, yesterday’s high print was at EXACTLY 3:00 AM EST, followed by a vicious smash at the odd hour of 6:30 AM EST.  Next, the typical attack at the COMEX open at EXACTLY 8:20 AM EST, another just before the PM fix at 10:00 AM EST, and the coup de grace, a VIOLENT DEATH STAR ATTACK at EXACTLY 12:00 PM EST, the notorious “cap of last resort” time.

Simultaneously, we watched the PPT fight weakening European stock and bond markets tooth and nail, until finally it succumbed to the pressure of being the ONLY market in the world to not be down sharply.  The Dow then spent the last two hours trading between -160 and -200, until it MAGICALLY leapt in the FINAL TWO MINUTES of trading to close at -134, down a measly 1% while the world crashed and burned.  No matter that American Airlines was down 6% to a new all-time low, or the major banking stocks, on average, by 5%.

Thanks to the blatant FASB ACCOUNTING FRAUD perpetrated on America to enable WALL STREET to record “record bonuses,” the financial sector accounts for a RECORD 29% of ALL U.S. profits.  Yes, those beautiful “profits” generated from the accounting treatment of DECLINES in corporate bonds, and real estate write-ups during a real-estate crash, account for the LARGEST percentage of U.S. profits.

If that doesn’t illustrate how dire America’s financial situation is, I don’t know what does.

Financial Sector Back To Accounting For Nearly One-Third Of U.S. Profits

On second thought, how about the fact that these banks received taxpayer-funded, printing press-created BAILOUTS as rewards for destroying the world, were granted the right to report PROFITS when only LOSSES exist, AND didn’t have to pay income taxes?

Bailed out banks PAID NO INCOME TAX

Or how about this chart, showing that American businesses’ cumulative penchant for DEBT make GREEK companies look like fiscal conservatives.  Something tells me the BANKS are skewing this chart vastly higher than the average American company, and that the TAXPAYERS will be liable for paying off these debts.

Anyhow, it truly amazes me how XLF, the financial stock ETF, which represents nearly a THIRD of ALL U.S. profits, can be DOWN 22% for the year, yet the Dow still UP 2%; not to mention, in an environment where essentially EVERY STOCK MARKET ON EARTH is down by at least 10%-15%!  I can’t imagine how much money has been thrown into PPT operations this year, particularly when turds like JP Morgan and Bank of America are pulling down the Dow.  I’d love to see what price the Dow would be if it still included the bankrupted (and subsequently bailed out) General Motors, Citigroup, and AIG, and what it WILL look like before the soon-to-be bankrupted (and subsequently bailed out) JP Morgan and Bank of America are replaced.

Oh well, nice to see ZeroHedge actually giving some air time to the blatant Dow propping described above.  Perhaps one day they’ll publish my “conspiracy theory” findings about the gold cartel…NOT!


Before I get to today’s “horrible headlines”, I’d like to comment about yesterday’s RANT regarding COMEX options expiration, as well as an extremely important Cartel-related topic.  Yesterday, I stated clearly that gold and silver may well fall this week, but NOT necessarily due to the upcoming options expiration on Tuesday.  Options expiration has had essentially ZERO impact on PAPER gold and silver trading in 2011, in my view because the overall goal of attacking gold ANY TIME it makes a material surge higher has taken precedent, whether it happens prior to an options expiration period or not.  Clearly, the European meltdown is nearing its denouement, and consequently ANY and ALL Cartel tools have been deployed to take PMs out of the “safe haven spotlight” while Greece, Italy and the rest go to financial heaven.

THAT is why the PM sector was smashed yesterday, and why the Cartel followed through this morning with a similar, nonsensical SMASH at EXACTLY the COMEX opening at 8:20 AM EST, and AGAIN (as I’m proofreading) at EXACTLY 12:00 PM EST!

The best way to look at Cartel attacks is to realize they are RARELY executed for a specific reason.  It is the BIG PICTURE that matters, the OVERARCHING GOAL of preventing PM sentiment from growing too strong, threatening commencement of the imminent PHYSICAL buying frenzy that will ultimately bring the system down.  Isolated events such as options expirations are just NOISE in the big picture, particularly when viewed as in the charts below.

Looking at DAILY data, gold has fallen 8% or more TEN times in the past decade…

But on a MONTHLY basis, this number falls to FIVE times…

While on a QUARTERLY basis, it drops to just ONE time…

And on an ANNUAL basis…NEVER!

Finally, research from one of the most brilliant, yet unknown gold analysts in the world, my good friend from GATA, James McShirley.  While I have toiled to document the TIMES when the Cartel is most likely to attack, he has analyzed the statistical anomalies caused by their capping activities over the past decade, specifically the “1% and 2% rules.”  James has done magnificent work tabulating the rarity of COMEX gold prices rising by 1%, or god forbid 2%, and when hell freezes over, a higher PM fix than the AM fix.  These rules define the term “sixth-sigma,” and at some time soon I hope to share his data with you.

James is obsessed with “capping statistics,” and put out the fantastic note below last night, which I view as far more relevant than minimal events such as COMEX options expirations.  This is not to say his analysis is definitively correct, as only time will tell.  But when creating a mosaic of the overall enigmatic movement of the PM sector, it helps to have as key pieces of the puzzle, such as this, at your disposal.

It’s obvious that there is real forceful opposition to gold getting past the $1,770- $1,790 area. I’m sure Dec. options expiration is significant, but there is likely another reason in play. The $1,770 – $1,7790 area could also be due to yet another cartel limit, this one being the maximum yearly gold gain allowed. Just like the 2% daily rule there is no other commodity that I can find that has had such consistent gains on a yearly basis the past decade. In fact at $1,777 gold has gained 26.6% for 2011, virtually IDENTICAL to the gains for both 2010 and 2009. ( +26.6% and +26.9%) Furthermore if you take the 8 best years of the past decade, (throwing out 2008) the average is +24.8%. Oddly enough (or not) that is an average of …. wait for it, … 2% per month. Like most peculiarities surrounding gold this can’t be a coincidence, and is certainly indicative of the level of manipulation when considered in total. The evidence suggests the cartel has maximum allowed gains not only on a daily basis, but probably even weekly, monthly, and even yearly bases. As time permits I intend to research weekly and monthly gold gains, which I believe will also show a similar manipulated pattern.

Regardless of the cause of the pressure the upcoming week looks stacked against friends of gold. If December continues the trend of “consolidation” as MSM calls it, then 2012 could quickly develop into some spectacular gains. $1,780 X 126.6% = $2,253.50 for 2012? Statistically it has a 100% chance since 2009, and an 88.9% chance since 2002. Let’s get those standard deviation from norm modelers out there to help calculate this stuff!

And finally, this week’s final installation of “horrible headlines”, starring….THE WHOLE WORLD!

Let’s start today with a headline that’s horrible only to the Cartel, ROCKETING worldwide demand for gold, particularly in China, the world’s richest nation…

CHINA’S GOLD DEMAND to reach 750 tonnes this year, up 29%

Unfortunately, foolish construction and other wasteful infrastructure spending has created cascading financial issues across many of China’s 23 provinces…

And thanks to the HOSTAGE-LIKE GRIP America holds over China due to its ENORMOUS holdings of U.S. Treasuries (if China sells, the whole world follows), the Chinese government may have FAR LESS capital to invest overseas than the consensus view…

Analysts suspect China’s Forex may be WEAKER THAN PERCEIVED

In Europe, Greek citizens have switched the focus of their anger from the ECB to where it rightfully belongs, AMERICA…

While TPTB clamp down on Italy in a “One World” power grab that puts Stalin to shame…

Mike Krieger EXPOSES Three Card Monti

The UK’s version of Ron Paul lectures Parliament of the “Pandora’s Box” it has opened…

Nigel Farage: How Dare You Tell the Italian and Greek People What to Do!?

And anyone ignoring the DIRE forecast inherent in these charts should be prepared to lose A LOT of money…


The ECB comically states that daily OVERT intervention in PIIGS debt will be capped at a measly €20 Billion…

ECB agrees on UPPER LIMIT to Sovereign Bond purchases

…so perhaps someone should show them what happens when they don’t buy EVERY BOND IN SIGHT…

Is 16 TIMES the charm for ECB INTERVENTION?

As for America, it just gets uglier and uglier, despite the PPT’s insistence that a stable Dow cures all ills.  Once again, American Airlines closed at a new low, before being downgraded yet again by Standard & Poor’s.  It’s only a matter of time before it goes bankrupt, with its 73,000 employees.

S&P downgrades AMR deeper into JUNK, watch NEGATIVE

American bank stocks were DESTROYED yesterday, led by its top French banking industry proxy, Morgan Stanley.  Look at those CDS rates rise…

U.S. Financials CDS UPDATE

…then consider we are just FIVE DAYS from the Supercommittee deadline, which could prove CATASTROPHIC if it ends (the day before Thanksgiving) with yet another round of Boehner vs. Reed jawboning.  Cuts or not, the current debt ceiling of $15.194 TRILLION will be breached shortly, and agreement or not, you can bet it will be raised to $16.394 TRILLION by year end.

Automatic spending cuts a NEW THREAT to U.S. ECONOMY

Meanwhile, the Fed continues to prepare the world for OVERT QE3, which I ASSURE you is coming soon (yet another reason the Cartel is so eager to push gold away from the key $2,000/oz level)…

Fed’s Dudley  – The Central Bank is NOT YET Out of Ammunition

While the OWS movement WILL NOT be deterred by system shills such as Mike Bloomberg…

Occupy Protesters Arrested in NYC Financial District

I guess that’s enough for this week, and perhaps I’ll take the weekend off given that my mother’s in town from New York (we’ll see).  Steel your minds, and wills, for what is coming later this year, as well as 2012, which will likely be the most pivotal of our lives.

Ignore the NOISE around you, from talking heads, newsletter writers, Cartel attacks, PPT operations, and ANYONE or ANYTHING seeking to divert your attention from what’s REALLY going on in.  Think independently of this noise, and you will know the right decisions to make.