NEVER in my life have I had such clarity of thought, mind, and conscience. I am FREE of the bondage, lies, and CONTROL over my life the gold Cartel held for the past decade.
Not that I did anything RECKLESS by investing heavily in mining stocks, which I essentially broke even on over a nine-year period. To the contrary, I am a conservative person by nature, and acted as essentially all my “Comrades in Gold Arms” over that period. Yes, I owned a lot of mining stocks, but didn’t view them as “risky” due to my confidence in the gold and silver bull markets, which I was DEAD ON right about in spades.
However, I didn’t realize the Cartel would CHANGE THE RULES in its quest to suppress PMs and maintain the PERCEPTION of strength in PAPER, UNBACKED assets such as the dollar and U.S. Treasuries. I was not prepared for a sixth-sigma ATTACK in late 2008, a stair-step increase in MANIPULATION OPERATIONS after “D-DAY” a year ago, another sixth-sigma stairstep in April, care of the SUNDAY NIGHT PAPER SILVER MASSACRE, and certainly not OPERATION PM ANNIHILATION in September (starting on my birthday!), when gold approached $2,000/oz. for the first time.
Despite the heightened INTENSITY of Cartel suppression, gold and silver have continued to rise for a decade, growing stronger and stronger in momentum, picking up “longer and stronger” buyers, and convincing thousands of people each month that the fiat currency system is indeed a HOUSE OF CARDS, just one breeze away from COLLAPSE.
Owning stock is like GAMBLING, as the odds are always loaded against you. I’d guess 98% of ALL stocks throughout history have gone to ZERO, and I’d also bet, having worked in the industry while holding 80%+ of my portfolio in mining stocks, that 90% of ALL mining stocks, WORLDWIDE, are under $0.50 per share right now. I always hated casinos because the odds are so bad, but now believe Black Jack odds aren’t much worse than owning stocks, if at all. Yes, it is possible to make a killing in the right stock at the right time, and I know this well as I more than tripled my net worth in 2005-07 with mining stocks. However, the HOUSE has since rigged the game to a point that it’s not worth the risk, particularly in such a “life or death” economic environment. Like I said, I’ve broken even on my mining stock investments, so ALL those gains vanished while gold and silver prices tripled.
Once I realized PHYSICAL gold and silver WILL outperform perhaps 99% of ALL stocks in the HISTORY of mankind, it became clear that my life’s vocation, the fundamental and technical analysis of equities, should be disavowed. I am CONFIDENT that QUALITY-mining shares will see a brief window of opportunity, but only QUALITY mining shares will participate, with heightened risks in the stock picking process with each passing month. Operational risk, cost pressures, political risks, windfall profit taxes, and capital gains tax increases will ALL intensify, culminating in the coup de grace for the ENTIRE sector, EXPROPRIATION RUMORS. Not to mention, the risk that banks and brokerages holding your shares go bankrupt, bank and/or stock market holidays, and, of course, the risk that your paper-denominated shares cannot be effectively (or practically) converted into REAL MONEY due to hyperinflation and/or metal shortages.
I have not slept this well in a decade, and will NEVER have the FEAR, LOATHING, and ANGST I had while holding large positions in mining shares, NEVER again!
OK, let’s get back to today’s stock market love fest. The Dow is now up 1,800 POINTS in the past three weeks, albeit in a PPT-dominated environment featuring EXPONENTIAL increases in government stock buying aimed at squeezing the RECORD stock short position and creating the PERCEPTION of a “European solution”, all despite unwavering mutual fund redemptions week after week after week. Yes, there still are SOME legitimate stock market participants, but the majority lost their shirts during the tech wreck, and much of the rest during GLOBAL FINANCIAL MELTDOWN I three years ago.
Goldman Sachs alone accounts for 10% of ALL U.S. stock trades, and other HFT firms another 65%. “Buy and Hold”, the mantra of two centuries of American stock investing (Peter Lynch, John Templeton, and Warren Buffett) is long dead, as the average holding period for U.S. equities has fallen, thanks to GOVERNMENT and HFT MANIPULATION, from four years in 1945, to EIGHT MONTHS in 2000, to TWO MONTHS in 2009, to just ONE MONTH today!
Today’s stock market surge, and frankly the entire 1,800 POINT Dow advance, is the product of EXPECTATIONS for a “Greek bailout”, aided by maniacal PPT buying, of course. Western government “leaders” KNOW what happened in 2008-09, and are desperately attempting to recreate the two years of investor RELIEF from the last round of mass bailouts, which enabled them to kick the can into mid-2011. TPTB are not smart AT ALL, not Merkel, Sarkozy, or “Iron Bra” Lagarde from the East Side of the pond, and CERTAINLY not the ABJECT morons on this side, Generals Bernanke, Geithner, and Obama. But they do understand that the majority of market participants believe BAILOUTS make for higher stock markets and reduced credit market stress, and are determined to recreate their 2009-2011 “success.”
To them, it doesn’t matter that a decade of bailouts, either implicit such as ZIRP or explicit such as TARP and the EFSF, have only made things worse, or that each dollar, Euro, and Pound printing brings the world that much closer to HYPERINFLATION. All that matters is their attempt to do ANYTHING to “extend and pretend” the fiat-based game, irrespective of the consequences. Just keep PRINTING MONEY and goosing the stock market, and all else will take care of itself, so they think.
If the “historic” (facetious) Euroland bailout wasn’t announced today, it would have been just another day of economic misery, and fraudulent government accounting. To wit, we started today with a huge drop in pending U.S. home sales…
…and an even sharper decline in consumer expectations, to a level last seen at the BOTTOM of GLOBAL MELTDOWN I…
But don’t worry, GDP growth ROSE 2.5% in the third quarter, despite the most rapid deterioration of economic statistics I can remember. Take a good look at the chart below, showing just how fraudulent government accounting has become.
For the past 15 years, consumer confidence has had a roughly100% correlation with personal expenditures, the component MOST responsible for the 3Q GDP “spurt.” Not only did consumer confidence PLUMMET during the third quarter, but literally fell off the bottom of the chart, to the lowest level in perhaps 30 years.
Yet, the government says personal expenditures ROSE in the third quarter, yielding 2.5% GDP growth!
Before I get to the grand European QE announcement, keep in mind that GLOBAL QE is the more appropriate headline. Japan continues to fade into oblivion, in its 22nd year of recession and more than a decade of ZIRP. Yet another OVERT QE announcement was made this morning by the pathetic BOJ, but sadly the financial world seems to care about as much as they do of the misery of Japan’s citizens. The land of the world’s oldest population, and lowest birthrates, is now the center of radioactive hell, a tragedy sure to be borne out for several generations.
Pardon me if I’m not that excited about the “big announcement” of a European bailout (which is exactly what it is), as it has been telegraphed for weeks. Anything short of a full-scale, TARP-clone bailout would have yielded immediate market collapse. So, what a shock, a TARP-clone bailout announcement!
I’m not going to repeat the numerous, fantastic analyses I’ve read of it today, such as this one from GATA poster, and fellow Coloradan, “Dave from Denver”…
However, suffice to say what occurred today, in my view, marks a KEY INFLECTION POINT IN ECONOMIC HISTORY. There should no longer be any doubt that all PAPER financial markets are controlled by WESTERN GOVERNMENTS, led by the EVIL leaders in Washington, New York, and London.
To start, the 50% “Greek Haircut” was no such thing at all, a pure farce as it’s only 20% when you exclude Greek debt owed to “the Troika”, which conveniently is not subject to the haircut (heck, they need every penny they have for the $1 TRILLION increase to the EFSF stability fund). Moreover, the criminal ISDA, or international regulatory agency for CDS instruments (which I had not HEARD OF until today), determined that since the EU arbitrarily termed the haircut “voluntary”, it didn’t count as a “credit event”, and thus would not trigger payment mechanisms on Greek sovereign CDS agreements!
I am no fan of the CDS market, which represents ALL THAT IS WRONG with the global financial system. However, despite its MASSIVE FAILINGS of the past (can you say AIG?), it has been considered a legitimate hedging tool by the market, and today the U.S.-led politico-economic CRIME SYNDICATE declared CDS contracts to be null and void, changing the accounting rules in the same reckless, illegal manner as they did in 2009 when they forced FASB to alter its derivative valuation rules for zombie TBTF banks. Clearly, the ISDA is to derivatives as FASB is to accounting, the SEC to stocks, and the CFTC to commodities – a puppet organization run by the bankstaz and for the bankstaz.
No matter that the ISDA’s OWN VOTING MEMBERS disagree, much like the drowned-out objections of Bart Chilton re: COMEX silver manipulation. The FINANCIAL MAFIA gets what it wants, caveat emptor (unless, of course, you own PHYSICAL gold and silver, where they are POWERLESS)!
Whether a repeat of mid-2009 through mid-2011″reflation” occurs or Europe and the rest of the Western financial system collapses, gold and silver will SOAR. However, for the few TRUTH-SEEKERS of the world, have no fear. If the former scenario takes hold, its HALF-LIFE will be dramatically less than the two-year period the last time around, likely by no more than HALF, per the definition.
The economic damage by reckless, FRAUDULENT fiscal, monetary, and accounting policies has been so pervasive, so decisive, and so UNPRECEDENTED; it is MATHEMATICALLY impossible to prolong the inevitable for more than 6-12 months, in my view. In fact, today’s announcement that CDS swaps are no longer valid will not take long to filter through the balance sheets of the multitude of INSOLVENT WESTERN BANKS and SOVEREIGNTIES. “Winning” CDS positions, utilized to HEDGE against exactly what has occurred, were the only things standing in the way of numerous balance sheet defaults, while INTEREST RATES have no where to go but up now that CDS rates, previously utilized as a BAROMTER of default risk, have been disabled.
Kind of like what THEY have attempted to do with the gold and silver BAROMETERS OF BAD TIDINGS, huh?
Either way, THIS is the REAL state of Europe, a bottomless financial pit with EVERY POSSIBLE VARIABLE working against it. THIS is the Europe that will emerge from the latest “bailout”, to return to its economic dark ages in the coming decade.
Of course, it all comes back to the same old problem, with the same old, historically proven solution. Fiat currencies ALL collapse, and the current fiat currency system, which unfortunately is now GLOBAL, is about to have the grandest collapse of ALL TIME.
The LINCHPINS OF THE ENTIRE MONETARY SYSTEM are GOLD and SILVER, and all it will take for them to re-establish their historical roles as MONEY are a few billionaires or sovereign wealth funds taking on the Cartel. Believe me, in just two days at Miles Franklin’s office, I can SEE the discussions with such “whales” building momentum, nearing that final melt-up when gold and silver go NO OFFER, and everything paper NO BID.
And speaking of PHYSICAL DEMAND, my good friends at the Central Gold Trust (GTU) announced an overnight stock offering this afternoon, armed with a fresh $1 billion shelf offering. In recent years, each successive GTU offering has set a new record, and I’d be very surprised if this one doesn’t exceed the June 2010 offering size of $280 million. GTU is one of the two “stocks” I own, the other being its “sister fund’ SVRZF, the Silver Bullion Trust. I’d own 100% physical if I could, but still need some “cash” to pay the bills, and in my case, GTU and SVRZF in a Charles Schwab brokerage account represents such “cash.” Watch for the fund buying its gold tomorrow morning (and the Cartel attempting to cap gold simultaneously), as well as the ensuing announcement of the deal’s size.
And by the way, remember the MASSIVE silver shortages in April, when PAPER prices approached $50/oz before the SUNDAY NIGHT PAPER SILVER MASSACRE? Just wait and see when it decisively breaks through $50 next year (or this year, if TPTB lose control more swiftly). The supply vacuum resulting from a THIRTY-YEAR TRIPLE TOP BREAKOUT will be among the most AWESOME in FINANCIAL MARKET HISTORY, although the world in which it occurs will not be one I am looking forward to living in.
PROTECT YOURSELF, and do it NOW!
Very informative and passionate… I have been studying and investing in the PM market for only about 3 years so I am still somewhat of a novice, but this seems to be such a divided topic (mining shares vs physical or both). I have decided on both so far, but continue to evaluate this topic. Peter Schiff, Jim Sinclair, John Hathaway, Eric Sprott, John Embry and some others seem to think that the mining shares will do ok, but I wonder if they will do ok no matter what or only if we return to the gold standard??? I do have to wonder how you could be a fan of GTU and not CEF? Thanks for the information…
Thanks for your comments, much appreciated.
As for gold vs. shares, if you have been reading my RANTS, you know I am very skeptical about mining shares for a variety of reasons. Most importantly, however, I believe gold and silver prices will rise mroe than 99% of all stocks in HISTORY, so why take the chance of owning the wrong mining stocks.
Moreover, while gold and silver will be soaring, other assets classes will plummet, so on a relative basis you will be doing 2x as well.
As for GTU vs. CEF, I’ve never said I’m not a fan of CEF. They are run by the same management team (as well as SVRZF), and are all equal investments.
Truth be told, however, I only own GTU and SVRZF because I believe GOVERNMENT COMPUTER algrorithms regularly suppress the much more liquid (and thus more dangerous to the Cartel) CEF.
95% of my holdings are PHYSICAL, and the remaining 5% are GTU and SVRZF, simply to have readily liquid assets to “pay the bills.”