What a difference a day makes!
Amazing how a well-planned PAPER attack can cause such short-term decimation of one’s net worth and sentiment, and how quickly the damage can be reversed when REALITY sets back in, as has been the case for the entire 12-year PM bull market. Admittedly, Cartel attacks have been much more frequent and intense in recent years, particularly since “D-DAY” on November 9, 2010 when they first experienced a tangible fear that the imminent PHYSICAL melt-up might be upon them. However, EVERY TIME such attacks have occurred since 1999, gold and silver prices have recovered to hit new ALL-TIME HIGHS, and this time will be no different.
Yesterday morning, Jim Sinclair sent out the following dispatch, highlighting that gold negativity reached “epic levels” last week, validating the various, heavily oversold fundamental, technical and sentimental indicators presented in my recent RANTS. I have been reading Sinclair for eight years, and have NEVER seen him so besieged by suicidal PM longs – and believe me, I’ve seen all his posts, including when the Cartel smashed silver to $8.00/oz in late 2008 (no, it wasn’t “margin selling” or “long liquidation”).
I am not saying PM mining shares cannot rise, and to the contrary have repeatedly stated my expectation they will rise sharply when the Cartel is broken, at least until the first hint of windfall taxes and/or nationalization fears arise. However, the reason for this “epic negativity” is NOT gold and silver themselves but the mining shares, which as noted repeatedly have dramatically underperformed the metals since 2006.
If my PM holdings were still heavily weighted with shares, I too would be suicidal after watching what the relentless, naked-shorting U.S. government algorithms and sinister Canadian investment bank shorting schemes accomplished this Fall, but with my 100% weighting of unencumbered, unfinanced,PHYSICAL gold and silver, I am not bothered one bit. Frankly, I spend more time obsessing over the PPT’s Dow-supporting machinations than Cartel PM suppression, as lower gold and silver prices simply make it easier help more people PROTECT themselves with lower-cost purchases.
Yesterday’s year opening Dow surge was clearly a PPT-planned strategy, “OPERATION INSTILL CONFIDENCE,” and given the momentum change achieved in buying up stock futures so aggressively during the thin holiday trading conditions in December, pushing the Dow up on the first day of January was a non-brainer. Furthermore, the Cartel knows the damage inflicted by “OPERATION PM ANNIHILATION II” – financially, technically, and sentimentally – has left gold, and particularly silver, heavilyoversold, and thus knew to back off while the PM sector drifts back up. Heck, as I’ve been noting for weeks now, the COMEX silver “commercial” short position has fallen to its lowest level in ten years, so you can judge for yourself what JP Morgan believes the price is likely to do.
I remember Goldman Sachs being short enormous amounts of PAPER gold in the Tokyo futures market circa 2003-2006, making it seem as if they’d never go long. But gradually they covered their entire position, and in the ensuing years gold more than tripled. Not that JP Morgan has the ability to hold silver down indefinitely (they DON’T!), but like Goldman’s ephemeral gold short position, eventually JP Morgan will see the writing on the wall and turn its silver short position to the long side, perhaps this year if the COMEX is not destroyed by other means.
Anyhow, gold started the year by rising 2.3%, modestly exceeding the Cartel’s 2.0% cap limit that has characterized 99% of ALL TRADING DAYS over the entire 12-year bull market. They still fought gold the entire way, first at EXACTLY 3:00 AM EST, then at EXACTLY the 8:20 AM EST COMEX open, and finally at the “cap of last resort” at EXACTLY 12:00 PM, as gold CANNOT rise like ANY other commodity, such as crude oil which rose 4.5% or silver, which erased essentially ALL of 2011’s 9% loss with a 7%+ gain in the first day of 2012.
And if you think I’m kidding, try to picture the media frenzy if GOLD were allowed to rise 7% in one day. Such movements occur with regularity in essentially ALL other commodities, not to mention insolvent bank stocks, but have not occurred ONCE in the 12-year gold bull. A 7% gold increase yesterday morning would have amounted to a $110/oz, bringing it to back to nearly $1,700/oz, causing every “black box algorithm” to turn positive, every fence-straddling, technical analysis reading newsletter writer to go long, and the media to proclaim inflation an emerging problem. In other words, the market is so fragile, it cannot handle even a DAY devoid of Cartel and PPT activity, although in time we will see just that, as they won’t be able to hold back the dam forever.
Of course, I would have bet EVERYTHING I owned that gold would be trashed overnight, particularly as it is sitting right around the KEY ROUND NUMBER $1,600. And voila, look at this morning’s action.
Could there possibly be ANYONE of unbiased mind left on Earth that can’t see what I see, starting with gold being pushed back below $1,600/oz in the ultra-thin trading hours following the NYSE close, to the sudden, sharp plunge at EXACTLY 3:00 AM EST when gold made a parabolic surge to new highs, once again pushing it below the KEY ROUND NUMBER of $1,600/oz. I’m sure you can guess that silver was simultaneously stopped cold just below the KEY ROUND NUMBER of $30.00/oz, and is dramatically underperforming gold as we speak with absolutely no material news, or major market movements, this morning.
Remember, the Cartel has several other rules, as highlighted in my “CARTEL SECRETS REVEALED, PARTS I and II” RANTS from last June. To start, “all great days must be followed by horrible days,” and secondly, if either gold, silver, or the shares, have a very strong day of outperformance, they must immediately underperform the very next day. Not that I KNOW what will ultimately occur today, as I’m writing at 7:00 AM EST this morning, but I have seen these “rules” enforced countless times over the past decade, particularly in front of a non-farm payroll employment number, as is scheduled for “fudge patrol” on Friday.
As for the “news” of the day, again I see a whole lot of the same. Stagnant global economic activity weakly disguised by MONEY PRINTING, escalating financial woes, and the progressively louder beat of war drums. The scariest article is the one below, showing sovereign debt issuance for 2012 forecast at more than $8 TRILLION, 90% of which emanates from the so-called “world leaders” of the G-7. As in America, the idiots running Europe have heavily weighted national debt with short duration bonds, which can see EXPLOSIVE yield surges at any time, as was the case in 2011, and today in soon-to-be bankrupt Hungary.
Picture having no savings and no job, and a mortgage on 90% of the (declining) home value due in TWO YEARS, instead of a 30-year mortgage. THAT is why European and U.S. sovereign debt is un-payable, and why the Fed, ECB, BOE, and SNB will maintain their ZIRP (Zero Interest Rate Policy) forever, at least until the system inevitably COLLAPSES.
Meanwhile, not a single article about the U.S. debt ceiling since last week’s headlines that Obama would “ask” for the debt ceiling to be raised by $1.2 TRILLION on December 30th. Here we are a week later, and yet no one CARES that we are about to breach the limit, let alone the inevitable approval of a MASSIVE $1.2 TRILLION increase following the $0.9 TRILLION increase in the Fall that has already been gone through.
Oh, wait, here’s some breaking news. Obama decided to wait until his two-week, TAXPAYER-FUNDED luxury vacation in Hawaii to deal with this trivial issue, and thus will likely submit the $1.2 TRILLION debt ceiling increase request later today. Wow, what an incredible amount of news coverage, given that a $400 BILLION increase in August caused a U.S. debt rating reduction, soaring gold prices, and a plunging Dow. Again, does ANYONE of sound mind really still believe financial markets are not rigidly controlled?
Adding to the inevitability of near-term inflation fears, minutes from the Fed’s December’s policy setting meeting were published yesterday, noting “a number of FOMC members saw possible need for further easing.”
But that’s not the half of it, as that was the 2011 crew of misfits, considered far more “hawkish” on inflation than the 2012 crew (FOMC voters rotate each year), featuring several major inflation “doves” and just ONE with any hawkish leaning, the same “Jeffrey Lacker” who made his most dovish comments to date just weeks ago.
And the Fed certainly should be “dovish,” as no matter how the Washington/Wall Street/MSM (Mainstream Media) “axis of evil” tries to spin the U.S. economy, it SUCKS. I still recall the hype about “record Black Friday sales,” which I heavily refuted based on assumptions that people are simply doing more holiday shopping that weekend than in prior years, principally due to UNPROFITABLE, deep discounting campaigns by DESPERATE retailers.
As it turns out, I was 100% correct, as not only were DECEMBER retail sales much worse than expected, and early comments from U.S. retailers dour, but now we’re seeing record returns of holiday gifts, presumably from “giftees” equally desperate for CASH to pay bills. As a rule of thumb, “sales” in today’s economy have as much meaning as “page clicks” in the internet days of yore. PROFITS keep companies in business, and deep discounting only hastens a retailers path to BANKRUPTCY!
Not to mention, I love all the “sentiment” and “diffusion” indices published by the government, often based on methodology either unexplained or unknown. Not to mention, such indices have nearly ZERO predictive value, as proved by a long-term chart of “consumer confidence” I published last week, showing consistent public confidence at economic “tops,” particularly when government handouts of PRINTED MONEY are initiated, such as “cash for clunkers” and “home buyer tax credits,” or times of propaganda hype about “patriotism,” such as in the aftermath of 9/11 (“do your duty and go to a Broadway show or shop on 5th Avenue”).
Moreover, does anyone notice how such indices tend to counter-intuitively rise just as the economy is at its worst, particularly during holiday shopping seasons? Or how only rising indicators are published by the media, as opposed to those, like the one below, that languished for MONTHS?
No matter what they say, do (i.e. PRINT MONEY), or falsely report, the REAL U.S. economy is weakening by the minute, and REAL employment and income will continue to fall toward the global mean for years, if not decades. This is why public hatred toward politicians and bankers, and gun sales for that matter, are at record levels, and why Ron Paul is surging in the polls despite every effort to denigrate him, such as the current, pathetic Republican Party mandate for all its candidates, no matter how despised or disgraced, to call Ron Paul “unelectable” any chance they can get.
Yes, Ron Paul, who with eleven Congressional terms has been elected more than any Presidential candidate in recent history, has by far the most experience, the most sane views, and came in a close third in last night’s Iowa Caucus, is “unelectable.” Keep it up, GOP, and you will find Nightmare Obama in office another four years!
No matter how you slice it, the U.S. government WILL default on its debt by nonpayment, military force majeure, or hyperinflation, EXACTLY why they are steadily increasing the inevitable Iranian war drums. A military force majeure is the best option for any government desperate to maintain POWER, attempted 100% of the time throughout history by militarily strong nations such as America.
U.S. bankers singlehandedly destroyed the worldwide financial system, using campaign contributions to take over Washington and get Glass-Steagal repealed in 1999, and subsequently creating a global derivatives network intimately tying the fortunes of ALL major Western nations, and SEVERAL Eastern nations as well.
The U.S. no longer exports ANYHING except worthless fiat DOLLARS, printed both overtly and covertly, resulting in massive GLOBAL inflation…
…and endemic financial BANKRUPTCY.
Yet, the doting MSM and “investment community” STILL fail to understand what is going on, or, for that matter, to even try.
But they WILL understand, be it in 2012 or sometime shortly afterwards! Per the excellent article below, it once appeared the Portuguese Escudo would remain the “world’s reserve currency” forever…
…and then the Spanish peseta…
…and the Dutch guilder…
…and the French franc…
….and the British pound…
I think we ALL know which country will be added to the top right of this table in the coming years. Thus, listen to Jim Rogers and have your children learn Mandarin, and to RANTING ANDY by PROTECTING YOURSELF with PHYSICAL GOLD and SILVER, FOOD, and OTHER LIFE NECESSITIES!
Today’s RANT topic, “DILUTION, AMERICAN STYLE,” has nothing to do with the dollar, mining shares, or anything financial. Instead, it describes the decline of American culture, which in many ways has spread to the world round. I believe excessive money printing, harkening to the abandonment of the gold standard in 1971, is the root cause of the “dumbing down” of America, in which commercialization long ago surpassed innovation and quality as the nation’s defining traits. Whether it’s the ten new flavors of M&Ms with different colored packages, millions of mindless SPAM messages invading my computer and cell phone each day, or the explosion in meaningless, unearned births in College Football “Bowl Games,” the universal impact, and consequently societal damage, of amoral, exploitative commercial practices is omnipresent.
Two recent observations inspired this RANT, although this topic has disturbed me for years, in a significantly more far-reaching way than the limited scope of this piece. The first was the realization that so many meaningless College Bowl games have been created in recent years, SOLELY for the purposes of generating revenues. To prove this point, of the 72 teams playing in a record 36 Bowl games this year, 22 had records no better than one game over .500, including seven below .500!
The second thing that got me thinking relates to a favorite topic, and pastime of mine, Word games. In some ways, a follow-up to my December 6th RANT, LITERATI, but don’t hold that against me when you read the section below about the “sequel cancer” that has overtaken American movies. What got me irritated is the explosive growth in “words” in the Official Scrabble Dictionary, barely recognizable from the first edition published in 1978. When my wife informed me that za, qi, and a host of previously slang or other “non-words” have now been included, it made me think of how diluted the language has become, and how game companies have catered to lower cultural denominators to bring in new players, even if such “catering” means the most respected Word game in the world literally making up words.
In LITERATI, I wrote of the online cheating tools developed by programmers, which have essentially destroyed the concepts of competition, education, and critical thought. Online gaming can be extremely stimulating, but like its evil brethren, gore-soaked games like Grand Theft Auto and Tour of Duty, such tools now evince much of the same negative emotions and instincts. And now, thanks to “new words” like za and qi, children and adults alike are rewarded for cheating and diluted education.
In other words, Americans have become so accustomed to “winning,” they don’t realize they aren’t winning at all, much as a $100,000 salary doesn’t mean much today thanks to the 5+% annual inflation created by the Federal Reserve. When I was a kid, a score of 100,000 on a pinball machine was easily top score, whereas today pinball machines award scores of a BILLION or more for the same results. Likewise, no longer is 300 the standard of a strong Scrabble score, now closer to 450 when adding slang possibilities such as za and qi. Inflation permeates our lives in more ways than we can imagine, and no one is happy to have its dumbed down constituents boiled in it more than the BANKERS destroying our lives through the Federal Reserve printing presses. Gee, I wonder when a perfect bowling score will be raised to 600!
I could write for HOURS of the myriad ways this blight expresses itself in American society, but don’t have either the time or inclination to do so, particularly relating to America’s top cultural cancer, reality television. Fortunately, I don’t need to, as nowhere is the dilutive impact on culture more prevalent than MOVIES, where essentially ALL new releases focus on pure commercialization, to the point where ALL box office winners are superhero/epic war/vampire flicks, sequels, or animated garbage that parents feel obligated to take spoiled children to.
Below is a list of the “25 most anticipated movies of 2012,” including a whopping 14 sequels, the overly-hyped reissue of Titanic, and a new “commercialization cancer,” the creation of sequels of age-old stories to cash in on brand names. It’s bad enough that the remake of Clash of the Titans was butchered last year, but now we will be treated to Wrath of the Titans to make sure the original concept is gored beyond comprehension. Moreover, in the spirit of the horrific Red Riding Hood “remake” last year, which turned it into a werewolf story, American children will now get to see “gorified versions” of children’s classics such as Hansel & Gretel and Snow White.
As for sequels, it’s one thing to add Batman movies, now renamed The Dark Knight to fool you into believing the stories are any different, as Batman is a staple of American culture. But now they’re making The Avengers, a sequel of sorts to the horrific Thor, Captain America, and Hulk movies, in which even Robert Downey Jr. was pimped into joining, so as to permanently destroy any remaining integrity in the Iron Man franchise. And then you have sequels of long-dead movies such as Men in Black, made simply because creative juices were long ago “sucked dry” from American culture by Vampire movies, of which four grace 2012’s top 25. Of the six movies not characterized as sequels, reissues, or remakes, two are vampire movies, two futuristic, gory war movies, one a Quentin Tarantino thriller, one an animated children’s film, and one a chick flick. I don’t think I’ve EVER wanted to see a chick flick before today!
When I peruse through the premium cable movie channels, which Comcast gives me for free because their business model is being decimated by competition, I rarely find anything worth watching, even in the “Just In” section of Pay-Per-View. However, I see scores of new horror films, as well as another expanding cinema cancer, the remaking of forgotten, low-budget 1980s horror films such as Friday the 13th, Halloween, and Nightmare on Elm Street, and still older horror films such as House of Wax. The advertisements don’t even bother to tell you they are remakes, as the producers figure dumbed down American teenagers won’t care that these once-novel ideas have been stolen in the name of a producing the ultimate low-budget films, ones that already have scripts. It is SICKENING how low the entertainment industry has sunk, but not as low as the GLOBAL business world in general, per the “World’s Most Lucrative Business Markets” article below.
There is no doubt in my mind that Central Bank MONEY PRINTING played a major role in the explosive growth of each and every item on this list, starting with the ironically-named “Defense” industry to illegal businesses such as drugs and prostitution. Too much money has destroyed culture as rapidly as it decimated the banking system, the middle class, and the world’s cumulative ethics and morals, but particularly in America, the so-called “role model” to billions.
Sometimes I write with a specific point in mind, often related to a particular financial issue, but sometimes I just RANT. I am very happy with my life, but equally unhappy with what has befallen America in my lifetime, which ironically commenced a year before the gold standard was abandoned. The underlying message is still there, to PROTECT YOURSELF from the inevitable, across-the-board increase in social, political, and economic risk, although my method of describing it is sometimes circuitous.
I am saddened greatly by the dilution of American culture – which has spread around the world like a cancer – but more so as I view its root cause to be the “get rich quick” mentality and “welfare society” lifestyle enabled by the lure of printing unlimited money.
One would think things couldn’t get worse, but what will happen when the dollar’s “reserve currency” status is revoked?
In Rome, they fed Christians to the lions, and in Berlin, Jews to the concentration camps.
PROTECT YOURSELF, and do it NOW!