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I urge you to read Ron Paul’s farewell speech before Congress.  It is long, but you should read it from start to finish.  Ron has been the guiding light in Congress for many years.  Who will take his place to grill the Fed Heads now?  No one, I guess.  We are all worse off with his departure.

Farewell to Congress – Ron Paul

Here are the latest real-world economic data from John Williams (Shadowstats)

No. 482: October CPI, PPI, Retail Sales, Real Earnings

November 15th, 2012

• Official Real Retail Sales Signal Recession
• Storm’s Impact on October Activity Was Mixed
• Official Real Earnings Sink to Four-Year Low,
Down 2.7% Year-to-Year
• Annual Consumer and Wholesale Inflation Continue to Rise
• October Year-to-Year Inflation: 2.2% (CPI-U), 2.2% (CPI-W), 9.8% (SGS)

This is exactly the pattern that Williams expects and he is still confident that the U.S. will experience hyperinflation by the middle of next year.  Heck, his SGS metric puts inflation at 9.8% NOW.  You can choose to accept the BLS numbers, – 2.2% inflation – if you wish, and bury your head deep in the sand, or you can use Williams’ number and deal in the REAL world.  The issue is where can you put your money and stay ahead of 9.8%?  Gold and silver have finished well ahead of this number for the past 11 years and I see nothing in our future to change that kind of return, unless the percentage INCREASES.

This morning I asked Trader David R about the repeating trends in gold where the price is taken down into New York and then rises, in the typical “V” pattern (pictured below).

David R replied:

The machines open in NY and trigger stop loss selling and push it down to get more stops then they slowly buy back.  These markets are run all by algo’s.  The machines are running these markets…. it’s frustrating for everyone.  None of the banks are seeing any of this business and they are all getting killed …… lots of guys being laid off as nobody is making money at the banks.

This explanation is not popular with Ranting Andy, but I say it makes little difference WHO is doing the manipulating; what is important is that IT IS BEING DONE.  On that topic, we have no disagreement.  David R knows many of the bank’s traders who have lost their jobs, and he has maintained for a long time that the bank’s gold and silver trading departments are hurting due to the deep-pocket funds and their algos.  He also stated that it won’t be long before gold rises by $100.  My timetable is for gold to start its move up in December.

After I wrote the Friday daily, Jim Sinclair wrote, “Calm down. Emotions are being run by machines, HFT and nerds who hide behind their computer.”  So, if you disagree with Trader David R, you should probably disagree with Jim Sinclair too.