It’s still Saturday afternoon, but my mind is racing, and the list of “horrible headlines” is piling up. But before I get started, I want to put you in a good mood. I was just sent the below video of perhaps the most amazing football play of all time, which even the most diehard football-hater will enjoy.
OK, back to reality. The past week was a major inflection point in GLOBAL MELTDOWN II, when the dam’s leaks became large enough for the chewing gum band-aids to be seen from outer space. The cumulative damage from decades of reckless borrowing and spending, deregulation of the most dangerous business on earth – BANKING – and corruption of the world’s most powerful politicians, is finally penetrating the artificial blockades of spin, propaganda, and MONEY PRINTING. It is downright eerie that the Mayans forecast December 21, 2012 as the “end of the world,” as I FEARwhat things will look like then, a year from today. Who would have thought that AMERICA, the “land of opportunity and freedom,” would fall so far, so fast?
The first thing on my mind is the endless bailouts – OVERT and COVERT – ongoing each day right under our noses. The concept of QE2 “ending” in June is too ridiculous to discuss, as evidenced by the continued, skyward rise of the published money supply, and anecdotal evidence that growth of the unpublished money supply, both in the U.S. and abroad, is many multiples larger. ECB bond purchases, the Fed’s unlimited “swap facility,” and of course ongoing “secret loans” to the world, only a small amount of which we have learned of, are mushrooming the global money supply to a level soon to ERUPT volcanically into the worst episode of HYPERINFLATION in human history.
Seemingly each morning a new “tipping point,” or “Lehman moment” as James Turk puts it, is averted by a combination of spin, propaganda, and, most importantly, COVERT money printing. The Fed “swap facility,” announced just two weeks ago, was an open-ended invitation to the world’s zombie banks to “borrow” PRINTED MONEY perpetually at nearly no interest rate, never to be paid back or accounted as such. Word is a MAJOR French bank, or banks would have collapsed without it two weeks ago, and it can be no coincidence the Fed “swap facility” was announced the morning after Bank of America, the U.S.’s largest bank, closed at $5.03/share and was subsequently downgraded by S&P after the close.
In fact, a major bank bailout may have occurred just DAYS ago, per the chart below. The Fed has become as skilled at obfuscating its actions as MONEY PRINTING, and it doesn’t hurt that jobless, apathetic, video game playing, reality show watching, texting, food stamp using Americans could care less. If the National Defense Authorization Act can pass by a 2-to-1 margin after just an hour of debate, with no public outcry except by Jon Stewart, than bailing out zombie banks in plain site is a no-brainer.
And before I leave the topic of the Fed, Dan at Future Money Trends is on fire this month, first publishing If Silver Goes Down, All Hell Will Break Loose In The Physical Market, which has received 120,000 YouTube hits in a week, and now this beauty on the Federal Reserve, describing how “QE to Infinity” is a 100% certainty.
Back to “National Defense,” the U.S. is finally ending the Iraq War after eight years, $1 trillion of direct costs, 10,000 American deaths (2,000 in Afghanistan), 100,000 wounded, more than 120,000 Iraqi casualties, and not a single drop of Dick Cheney’s treasured Iraqi oil. Congratulations, America, fantastic effort considering it was predicated on WMD’s that never existed and a link between 9/11 and Saddam Hussein, also untrue.
But don’t’ worry, we’ll just blame it on Iran, with or without evidence. And no worries, the dumbed down, entitlement-starved American populace will be happy to support the next chapter of the “War on Terrorism,” so long as it doesn’t pull them away from their video games or bank-financed iPhones.
In fact, while the news networks tell story upon story about the end of the Iraq war, they somehow fail to report the fact that many of those troops are being redeployed to the Persian Gulf, as the inevitable countdown to “Operation Ahmadinejad” begins. I have NO DOUBT this topic is being discussed in the White House as I write, as part of its “Election 2012” grand strategy.
And if Obama doesn’t scare you enough, just listen to this psychopathic madwoman, Michelle Bachman, espouse how we need to attack Iran NOW. Brainwashed lunatics like this have no idea that war destroys the world, or maybe they do and just don’t care. Modern America is the largest war machine in human history,care of the defense contractors that have taken over the military with the same degree of control Wall Street has taken of America’s financial decisions.
Conversely, THIS is how one should treat the world! THIS is how one makes friends, not enemies, particularly when one is completely, utterly BANKRUPT!
TPTB know the END GAME is here, and have thus pulled out every possible, illegal maneuver in their expanding playbook to buy more time, although due to the onset of “MANIPULATION SATURATION,” such “cash bombs” and “propaganda attacks” have shrinking half-lives, soon to be completely ineffective. I’m guessing they’ll make it through year-end, just long enough to pay themselves “record bonuses” with PRINTED, TAXPAYER MONEY, while the government continues to SPEND, SPEND, SPEND.
Don’t forget the $15.194 trillion debt ceiling is about to be breached, with another $1.2 trillion scheduled to be added on Friday, December 23rd. It’s hard to believe the media was so crazed about raising the debt ceiling from $14.292 trillion to $14.692 trillion just four months ago, but not a single article has been written about rising from $14.692 trillion to $16.392 trillion, with nary a dollar of spending cuts accompanying it. Nor that gold SOARED back in August for that very reason, while it has tanked this Fall thanks to the dual doses of “OPERATION PM ANNIHILATION I” in September and “OPERATION PM ANNIHILATION II” here in December.
Last year, Gerald Celente stated “the American Empire is on its deathbed,” and I believe 2012 may be the year it dies.
No, I’m not done with the United States of Corruption in this RANT, not even close. The situation here has become so vile; I can barely contain my rage. One story after the other of government-sanctioned, often government-led fraud, although when I say “government” I mean Wall Street and the aforementioned Military Industrial Complex that runs it via exponentially growing campaign contributions and reciprocal appointments.
I mean, the story below is unbelievable – “only in America” as they say. The SEC, a government agency, suing executives of Fannie Mae and Freddie Mac, two other government agencies, for fraud. Guys, get your story straight, you’re all part of the same CORRUPT team!
Or how about the unending explosion of “silver derivatives” by JP Morgan, which adds BILLIONS each quarter to this “dark pool” of naked, PAPER silver shorts each quarter, under the watch of the Office of the Comptroller of the Currency (OCC), yet another government agency. What is the OCC anyway, what does it do, and how much PRINTED taxpayer money does it cost? JP Morgan, being sued by half the planet for naked shorting silver OVERTLY on the COMEX, and under investigation by the CFTC, yet another government agency, for the past THREE YEARS for same, has close to $30 billion of “silver derivatives” alone, roughly equal to ALL AVAILABLE SILVER STOCKPILES ON EARTH (most of which is NOT FOR SALE)!
No worries, frustrated PM investors. For one, remember your “investments” in PMs are no such thing. PHYSICAL gold and silver are not “asset classes,” they are MONEY, timeless wealth that CANNOT be debased, certainly not in today’s world of EXPONENTIAL MONEY PRINTING and GLOBAL FINANCIAL COLLAPSE. Each PAPER attack takes the Cartel one day closer to its demise, as occurred with the London Gold Pool in 1968 and ALL previous attempts to suppress Precious Metal prices throughout human history.
The MF Global collapse, premeditated or not, will prove to be a watershed event when history is written, accelerating the inevitable, PERMANENT separation of the PAPER and PHYSICAL markets, a process that started years ago and recently gained strength (see the Open Interest/Gold and Silver Price ratios in my December 5th RANT, “THE SOUND OF SMART”). PHYSICAL premiums have expanded in recent years, and I strongly believe the cumulative COMEX losses caused by Cartel manipulation, loss of confidence in the COMEX itself thanks to MF Global, and the early 2012 expansion of the Pan-Asian Gold Exchange (PAGE) will shortly yield an end to COMEX suppression of PAPER gold and silver prices, and possibly the COMEX itself.
And you don’t have to take it from me, take it from this passage in James Cavell’s Gai-Jin, describing East-West trade in the 1860s.
“I’m sure you know China will only accept “cash,” i.e. silver or gold, for the tea we must import, nothing else. The only merchandise they’ll pay “cash” for – silver or gold – is opium, nothing else.
Alas, some things never change!
Twas’ the week before Christmas, and all are asleep. Off to the gym this morning, where the parking lot was empty. Not a creature was stirring, except of course the Cartel and PPT.
Yet another Sunday night attack, nearly the second the thin Asia markets opened, with NOTHING in the news except the death of Kim Jong Il of North Korea, and no markets moving at all. Once NY opened, gold actually jumped from its $1,580 overnight low to $1,608, but of course those gains evaporated at the COMEX open at EXACTLY 8:20 AM EST, followed by a second WATERFALL DECLINE at, just after 10:00 AM EST, as always. Moreover, with all other commodities essentially flat, and of course the PPT-inspired Dow futures up their token, set-the-tone 50 points, PAPER silver was down a staggering 2.5%, as the disconnect between PAPER and PHYSICAL prepares for to grows wider in the coming weeks.
In the true spirit of “market action makes commentary,” every conceivable reason is brought about to explain why PMs have been hit so hard, not a one mentioning the obviously concerted “OPERATION PM ANNIHILATION,” as I call it. Such drivel has repeatedly brought up the topic of Central bank “gold leasing”, as brain-dead reporters echo what they are told by equally brain-dead “analysts” and Cartel shills about how Central Bank gold is being “leased” to meet cash needs brought about by the expanding financial meltdown. Funny how none of these gaggle of morons ever ask themselves why, with all this gold leasing occurring, Central Bank gold holdings NEVER decline, such as the so-called 8,135 tonnes held by the U.S. Treasury, which but for a few tonnes to mint gold eagle coins, hasn’t declined in 30 years.
Yes, this is the beauty of international crime syndicate law, in this case authored by the IMF, which for some reason was years ago mandated to create the accounting rules for Central Bank gold holdings. The reporters and “analysts” neglect to research this simplest of economic concepts, and if they did they’d see that leased Central Bank gold is permitted to remain on the balance sheet, double-counted although the metal is long gone, sold by an unnamed third party, never to return. Which reminds me of the GLD and SLV ETFs, which are permitted to do the same. In fact, SLV’s custodian, none other than crime kingpin JP Morgan, is permitted by its prospectus to store the fund’s silver holdings with “sub-custodians” that don’t need to be either named or audited, i.e. “dark pools” where supposed silver bars go, but never return from.
In the article below, it appears the SLV naked short position is once again exploding due to, NO DOUBT, JP Morgan naked shorting its own fund to maintain the suppressed COMEX price and avoid delivery requirements. Apparently, yet another loophole in the SLV prospectus allows the trustee to issue new shares before it acquires the metal to back them. And yet people still buy SLV as a proxy for silver, while the discount to the PHYSICAL silver price continues to erode each year!
Back to the markets, the weekend might have been uneventful, but the “horrible headlines” continue to build, and will NEVER STOP until the system collapses entirely, likely in 2012 by my estimation. The global PTB may appear powerful due to their ability to PRINT MONEY and MANIPULATE MARKETS, but the forces of Economic Mother Nature are pure, and powerful, unable to be defeated by financial engineering and propaganda. MANIPULATION SATURATION assures that all new Fed, ECB, and BOJ efforts to stave off the inevitable will prove ephemeral, until finally the forces of reality swamp them, just as they swamped, and defeated the London Gold Pool in 1968, U.K. government support for the pound in 1992, and Bernie Madoff in 2010.
Around the globe, Economic Mother Nature is displeased, and each day it becomes more clear that no nation will be spared her wrath, ANYWHERE.
China’s real estate bubble is undergoing an epic collapse as we speak, although the puppet media is reluctant to speak of it. Apparently, much of China’s $3.2 Trillion of U.S. dollar reserves are committed to its immense, bank- financed construction Ponzi scheme, which has come to its end as no new buyers are stepping up to purchase residential or commercial properties in the dozens of “ghost cities” that have sprung up across the land.
In Europe, things go from bad to worse…and worse…and worse. Not only is the financial situation deteriorating rapidly, saved from terminal collapse ONLY by the emergency Fed “swap facility” that has likely injected hundreds of billions of FREE, FRESHLY PRINTED dollars into the system in the past two weeks…
…but political infighting has escalated to “DefCon2” levels following the UK’s refusal to join last week’s pathetic EU austerity treaty, the one which will be broken apart within weeks when it is found that most, if not all, signees are completely ignoring its tenets.
In fact, the verbal battle between the UK and France could, in and of itself, be the spark that DESTROYS EUROPE, given that the UK has the highest cumulative debt load in the world, yet has been “flying under the radar” due to its self-exclusion from the Euro Currency, and its ability, like the U.S., to print as much money as it wants. Not only is the UK the birthplace of financial corruption and military imperialism, but it has the least regulated banking system on earth, and hands down the highest inflation in the “civilized world.”
In reading Gai-Jin, about British imperialism in Japan circa 1860, I am reminded yet again of the nation’s history of abusing its military power to enslave nations, force religion and politics down their throats, and steal their wealth until finally defeated by uprisings. Even the U.S.’s corrupt history pales in comparison, although it is currently making up for lost time. Wouldn’t it be ironic if England and France, the world’s oldest cultural and military rivalry, winds up plunging Europe into war yet again, only this time involving dozens of other nations from around the world?
As for the rest of Europe, what more is there to say?
The rating agencies continue to savage the Continent’s dying “old world” nations, including Moody’s two-notch downgrade of Belgium on Friday…
…Fitch’s outlook revision on the comically AAA-rated France to negative…
…and Fitch’s capitulation that essentially ALL of Europe will likely be downgraded in the coming weeks, including France, Spain, Italy, Belgium, and Ireland.
Meanwhile, in lieu of the failed, Dead On Arrival EFSF rescue fund, all the rage Friday was that the IMF would instead act as “white knight” for Europe. I can’t describe how stupid this concept sounds, as the IMF is simply an agglomeration of funds contributed by member nations – the very same member nations that refused to contribute to the EFSF! Of course, it took exactly ONE business day for this rumor to be refuted, as NO ONE in their right mind will bail out the “too big to bail” nations of France, Italy, and Spain, EVER.
Only COVERT money-printing is likely to be attempted at this point, as risking the backlash (EXPLODING GOLD PRICES) of a massive, OVERT MONEY-PRINTING operation by the Fed or ECB could be instantly fatal. Scratch that, they’ll try it anyway, just give it time!
And what’s this? While proofreading this morning, the following article emerged, noting that ECB sovereign bond purchases have again picked up, just two weeks after MANIPULATION SATURATION of the almighty “Fed swap program” was announced, yet another example of its ABJECT FAILURE, and better yet, the sheer hopelessness of the situation.
Before I get to my RANT topic of the day, I want to bring one more topic to your attention, how SICK the American economy is, and how rapidly this TERMINAL ILLNESS is spreading, contrary to the non-stop PROPAGANDA preaching the economy is “recovering.”
Two weeks ago, I watched a heartbreaking episode of 60 Minutes, depicting the inexorable rise in American homelessness, including 1.2 million such children in the “land of opportunity.” Millions of Americans are living in cars, “tent cities,” and homeless shelters, and many of those lucky enough to find homes are doing so only due to food stamps, other PRINTED MONEY government entitlements, and bank reluctance to foreclose on homes, and thus write down their balance sheets, in turn yielding corporate bankruptcies.
Last night, I watched an equally gut-wrenching story of neighborhoods DESTROYED by government-promoted real estate lending, which are now WORTHLESS. Houses are being raised by the thousands in the mistaken belief it will raise real estate values, as the BANKS owning that real estate will obviously be forced to take the aforementioned write-downs – not to mention, the bankrupt municipalities will go into greater hock just do to the gargantuan costs of such demolition programs. Would it SHOCK anyone, for instance, to learn that the median home price in Detroit is $6,000?
Worse yet, American “growth” is based solely on unreported INFLATION and exploding DEBT. I did a double-take after reading the below article, which states that American credit card debt was 154% higher in the third quarter of 2011 than a year ago, as “the speed at which consumers are garnering new debt is unprecedented.” And I thought news of China’s year-over-year gold imports rising by 4,000% was shocking!
Readers, the ENTIRE WORLD, but particularly Europe and the U.S., which for generations have enjoyed WAY ABOVE AVERAGE standards of living, are about to enter a prolonged depression, the likes of which even our grandparents would have a difficult time remembering. That is why studying HISTORY may be the most important means of survival, to learn how such situations unfolded in past, and what people did to PROTECT THEMSELVES during such periods.
As you watch the stock of Bank of America, the U.S.’ largest bank, yet again stare at the $5.00/share non-marginable abyss, ask yourself this:
What will YOU do when GLOBAL MELTDOWN II rages out of control?
Which leads me to today’s topic, “PUT YOUR MONEY WHERE YOUR MOUTH IS.”
As noted above, I view HISTORY as the singularly best way to educate yourself, and thus spend countless hours reading about past crises of the past. The types of crises I research have not occurred in some time, so most of the writings are from deceased authors. However, World War II, the Holocaust, and the Great Depression are recent enough that survivors still exist, and in the immortal words of the great Andy Rooney, “the best classroom in the world is at the feet of an elderly person.”
Particularly in economic matters, which can literally determine your “life or death,” it pays to find the few “good, smart people” to learn from, particularly those with a lifetime of experience in financial markets. The reason I am here writing today, as opposed to out of work and scratching to survive, is my reliance on the writings of the great financial experts of our time, starting with Richard Russell and Jim Sinclair circa 2002.
Russell has been preaching of the three “primary trends” since I first read Dow Theory Letters in 2002 – the gold bull, the dollar bear, and the Dow bear. And he has been correct for a decade, more so today than ever. Who knows how much further along these trends would be if not for exponential growth in MONEY PRINTING and MARKET MANIPULATION, but then again, the levels they would have reached today PALE in comparison to how far they will extend due to such arrogance in the face of Economic Mother Nature.
PAPER and LEVEAGE – the basis of all financial markets for generations – are destined to die horrible deaths in the coming years, perhaps as soon as 2012, to be replaced by REAL ASSETS, AUSTERITY, and “CASH & CARRY” markets, for generations to come, and believing otherwise will take you with them. Stocks as mainstream investments will soon be a thing of the past, as will bonds, fiat currencies, and financial engineering, to be replaced by the “Once and Future Kings,” PRECIOUS METALS.
Mining stocks are NOT gold and silver, no more than ETFs, Perth Mint Certificates, or tungsten bars, and have proven thus over the past decade. My estimate is that 90% of all PM mining stocks have declined in value over the past five years, with the 10% that haven’t dramatically underperforming the metal besieged by surging mine costs, depletion, share dilution, and naked shorting. A precious few may survive through the breaking of the gold Cartel to make dramatic gains, but most will likely be swallowed by the abyss of collapsing financial assets, while those that do survive will likely, shortly thereafter, be undone by capital gains tax increases, bank holidays, brokerage bankruptcies (read, MF Global) and nationalization fears.
Only PHYSICAL gold and silver ensure you will SURVIVE through the coming economic Armageddon, and potentially THRIVE if the system remains intact and the world evades World War III. Richard Russell says so, which is good enough for me.
As for Jim Sinclair, “Mr. Gold,” he felt so strongly about the prospects for PHYSICAL gold in April 2008, when gold was $900/oz and had just been attacked following its first attempt to eclipse $1,000/oz, that he bet ANY AND ALL TAKERS $1 MILLION that gold would hit $1,650/oz by January 7th, 2011, a bet taken up by NO ONE despite the incredible odds in their favor.
They would have won that bet, but just barely, as gold reached $1,400 in January 2011, en route to $1,650 in August and ultimately, $1,920 before “OPERATION PM ANNIHILATION I” commenced minutes after the Labor Day weekend.
Sinclair KNOWS gold is rising to at least $4,500 in the coming years, and could not be more confident in his prediction, so SELLERS BEWARE!
And speaking of cajones, long time gold commentator Peter Grandich last week took on the “Three Stooges” of Precious Metals – Jon Nadler, Jeff Christian, and Dennis Gartman. These three symbols of stupidity, poor analysis, and the selling out to covert government interests have spent the past decade denigrating gold and silver at every possible opportunity, continually forecasting its collapse, and working with three of the most discredited organizations in the business world, to boot.
Grandich bet each of the three $1 MILLION that gold would reach $2,000 an ounce before it hit $1,000, yet not a one accepted, as all three KNOW they will lose. Not only will gold hit $2,000/oz first, it won’t even come close to $1,000, a level never to be seen again. Moreover, Sinclair’s $4,500/oz is just a “jack for starters”, as he, too, knows $15,000-$20,000/oz is a more likely end game in TODAY’S DOLLARS, having done the math to prove so.
But buying PHYSICAL gold and silver is not about TODAY’s DOLLARS, but tomorrow’s, which may or may not even be “dollars.” The present, unavoidable course is one with HYPERINFLATION, which is why one needs to PROTECT THEMSELVES, and do it NOW!