Tuesday afternoon, and the world is agog of Apple’s blowout earnings. Good for them, it’s nice to see an American company doing so well, not via government (i.e. taxpayer) largesse but old fashioned ingenuity and business savvy. My first “desk job” involved word processing with an Apple Macintosh circa 1990, when it was struggling to survive in the computer business. Apple’s desktop business never became the powerhouse Steve Jobs envisioned, but my god what he’s done with gadgets such as the iPod, iPad, and iPhone. He and Bill Gates are two of the smartest men America has ever produced, and I wish the best of luck to Apple for decades to come.
Of course, I don’t own Apple, or any other stock in the entire market. My last non-Precious Metal stock was sold in April 2000, and my last mining stock last summer. You see, in a 100% rigged market, buying OR selling short is hazardous to your financial health, particularly when TPTB have no interest in helping you become wealthy. True, they support the Dow Jones Industrial Average and other stocks deemed important to “national security” – such as TBTF banks – but everything else is fair game, the domain of criminal HFT algorithms. At times, TPTB attack the stock market if it’s deemed politically expedient, particularly as an excuse to OVERTLY announce new stimulus programs. As Bill Murphy says, “Market action makes commentary,” and if the PPT takes the Dow down a few hundred points, it knows the puppet media will rush out the “deflationary collapse” headlines so useful in supporting new MONEY PRINTING initiatives.
Of course, that is the opposite of the PPT’s current plan, to NEVER let the Dow meaningfully decline – EVER. This (Tuesday) morning at the gym, Dow Futures were down 50 points, but miraculously never dropped further despite abject failure of the comical “Greek debt negotiations,” as well news that the IMF significantly reduced its 2012 growth estimate (growth, yeah right!), warning a “severe recession” could ensue if the EU doesn’t act to resolve its debt crisis.
IMF Cuts Global Forecast, Sees European Recession, Warns Of 4% Economic Crunch If No Euroarea Action
I don’t know about you, but that sounds darn gold positive/stock market negative to me, identical to the headlines yielding such market activity last summer. Essentially, a plea by the IMF for the ECB to PRINT MONEY, and do it NOW, plus a “worst-case scenario” threat of another global financial crisis. European stock markets were down roughly 1.5% when this emerged, but somehow righted themselves by day’s end. The Dow, of course, was rescued within minutes of the open to set the tone, with no volatility for the remainder of the day.
The dollar barely budged, and base metals had extremely strong days, such as zinc (+5%), lead (+3%), and nickel (+2%). Per the charts below, all four spiked up at the COMEX open, with nary a blip downward all day, while Zero Hedge maintained its streak of stupidity by flashing out its moronic “risk off” headline.
I don’t think there’s a more idiotic term in modern markets than “risk off,” which gets thrown out every time the Dow falls 30 points or copper a few pennies, even more so because traditional safe havens like PHYSICAL gold and silver have been the ultimate “risk off” securities for the past 5,000 years, not to mention in early 2009 and mid-2011 amidst dramatic market turmoil. Even more idiotic is not following up such knee-jerk drivel-spewing with commentary wondering why, in a “risk off” environment, global stock markets ended the day barely lower, base metals higher, the Euro unchanged, and Precious Metals significantly lower.
Not only lower, but via the EXACT SAME PATTERNS as we see every day, be it an up or a down day. All day long the Dow / Gold x 2 ALGORITHM was on, never allowing gold to meaningfully rise during PPT-inspired Dow goosings. Conversely, it was smacked down each and every time it attempted to rise, per the ridiculous – and common – jagged pattern in the green line below. Quite a coincidence that “risk on” commenced at EXACTLY 3:00 PM EST for gold, with yet another mini-WATERFALL DECLINE at EXACTLY the COMEX open at 8:20 AM EST, followed by a third at EXACTLY 12:00 PM EST when it had the gall to try and rise. Come to think of it, EXACTLY like yesterday’s COMEX trading pattern, and hundreds of other days over the past decade. The similarity of the red and green lines below is all the evidence you need to see – but not enough for “Tyler Durden” to spend material time on.
And don’t forget the abysmal mining shares, down another 2%, not including another horrific performance from Pan American Silver (PAAS), under relentless attack from Cartel naked shorts to continue the façade that ALL mining share news is horrific. Miss earnings by a penny, make an acquisition, see a 5% cost increase, etc. – you name it, and your stock will plummet 20%. Hardly the PROTECTION against imminent hyperinflation one is looking for. Mining share earnings and resource/reserve multiples have been CONTRACTING since 2007, and until the Cartel is BROKEN I see ZERO chance of this loss-inducing trend abating.
Other than the aforementioned dire IMF economic warning, which in today’s “LOCKDOWN” market environment is no longer newsworthy, just more of the same from both sides of the pond. There is simply no way of describing Europe other than bankrupt basket case, with perhaps a dozen nations committing ongoing political and economic suicide each day.
Whether it’s Spain begging for more bailout funds (geez, take a look what an unadulterated unemployment chart looks like)…
Desperate Spain Wants European Rescue Fund To Be “The Bigger The Better”
Standard & Poor’s warning of an imminent Greek default…
S&P Warning Of Imminent Greek Default Again – Zero Hedge
The realization that Portugal is next on “financial death watch”…
Portugal Reenters Bailout Radar As Traders Realize Greek “Rescue” Model Is Not Feasible Here
Or Italian police breaking into S&P’s offices last week, and Fitch’s today…
Italy Police Busts Fitch Milan Office
…the end result is the same. Capital is FLEEING the PIIGS (and will soon be fleeing “bigger fish” such as France, Germany, and the UK…
…and the only way to prevent immediate default, and subsequently collapse of the Euro currency, is massive MONEY PRINTING. TPTB will continue down this course, i.e. “QE to Infinity” as they have no choice, but given the DIMINISHING RETURNS of new debt, the ultimate HYPERINFLATIONARY result is set in stone.
Here in the States, the situation is no different, other than that our “world reserve currency” enables us to paper over our problems more so than other nations. That said, this privilege has been catastrophically abused, to the point that America has more sovereign debt than all of Europe combined – and that’s just the “on balance sheet” amount, ignoring $5 TRILLION owed by “off balance sheet” entities such as Fannie Mae and Freddie Mac, plus $100+ TRILLION of “unfunded liabilities.” Not to mention, the potentially TRILLIONS of bank losses to be transferred to TAXPAYERS in Obama’s abominable “mortgage settlement plan,” to be unveiled shortly.
Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement”
Then again, holes in the dollar’s armor are rapidly widening, as non-dollar currency settlement agreements have been signed by nearly all major Eastern powers in recent months, such as China, India, and Japan. Even more ominous is this hot-off-the-press announcement that Iran is now accepting GOLD from India in exchange for crude oil, a practice which five years from now may be more common that oil for petrodollars.
Gold for Oil: India and Iran Ditch Dollar – Report
This news is HISTORIC, as it once again re-establishes GOLD as the international currency it has been since the earliest human civilizations. I cannot overemphasize the importance of this development, which could commence a “chain reaction” of similar REAL MONEY contracts in a very short period of time. In essence, it represents the “beginning of the end” of dollar, and “middle of the end” of the petrodollar. I could go on for some time of its importance, but instead will let my good friend Bill Holter do the talking for me…
To all; “India trades Gold for oil with Iran”, this news came out yesterday with little fanfare and even less response from the markets. This is really BIG news! India is entering into an area that has been absolutely taboo since the 1947 Bretton Woods conference. It has been “expressly forbidden” to conduct trade amongst nations using Gold as the medium for settlement. Now, India is skirting the plans and wishes (demands) of the U.S. that the world embargo Iranian oil. Not only that, as a side irritation to the U.S., our “ally” Turkey, is facilitating trade with Iran through their banking system. Oh yes, lest we forget, Russia and China have set up trade deals amongst themselves AND with other trading partners where the Dollar will not be used. It is this “settlement of trade” function that has been a source of huge Dollar demand during our entire lifetimes that is now being threatened.
Please keep in mind that this lower demand for Dollars is coming at a time where the Fed has, is and must in the future, create more Dollar supply (creating debt) than any time in the past. In my opinion, the ultimate “pushing on a string” will result and Dollar supply will dwarf demand. This will result in hyperinflation and it will be as we thought all along, a currency event. Can we go through a period where the Dollar gets squeezed higher because of temporary demand to repay international Dollar denominated debt? Can we see foreign currencies “drop” faster than the Dollar because foreign currencies are largely backed and reserved with Dollars? Yes we can, but in the end, where does real and sustainable demand come from if the Dollar is not used to settle trade?
The answer to this question? It doesn’t in any real form. I can envision the absolutely comical situation where the Fed “prints” Dollars to “buy” Dollars on the open market (don’t laugh, this has and probably is already happening). As the current Dollar/debt system is an outright Ponzi scheme, anything and everything will be done to prolong it. BLS statistics and government statistics are “made up” to the absurd all the time, what would stop the Fed from “fudging” money supply numbers? We know now of $16 Trillion worth of international loans back in 2008-2009 that we knew nothing of then so…we should faithfully believe they would not do it again? The Fed has been strenuously avoiding audit and simply says “trust us”. Well, we did that…for too long and look where we are now.
Do you see what I am getting at here? This is crunch time big time! Just as we are NEED extra demand for Dollars, the opposite is happening. Just as “they” are running out of paper tricks and physical supply to depress Gold prices, demand is ramping up! Mind you, this ultimately HAD to happen sooner or later, international traders are taking matters into their own hands and Gold is finally being re-monetized. My guess is that we will hear of a few more “Dollar-less” deals announced and then we will get the Big One. That being some currency or currency block that backs their paper with Gold on a ratio. Some sort of linking or (God forbid according to Bernanke and Geithner) “peg” to Gold is announced by a renegade government. Even 2 years ago this sort of “tin foil hat” thought was laughed at, soon it will be reality.
Anything, any policy and any type of volatility can commence from here. Do not be surprised by anything on a daily or very short term basis as we are in the desperation phase and any type of leverage or risks will be undertaken by the official sector to retain power (control). It will not stand and Mother Nature’s real and true money, Gold, will be the last man standing! Please, do not “get out of position” for any reason! Regards, Bill H.
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READ THE FULL NEWSLETTER
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Today’s RANT topic is going back to basics.
My job is to alert you of the REAL state of the economy, the so-called “shadow world” where TRUTH exists for the few that dare to enter, but my passion is empowering people to PROTECT THEMSELVES. As David Schectman noted in yesterday’s blog, he views me as a whistleblower against the establishment, particularly the Wall Street crime syndicate that enslaved me between 1989 and 2005.
I may be “young” in absolute terms, but at 41 have seen all sides of the financial world, as a compliance officer, bond broker, buy-side trader and analyst, sell-side analyst, and investor relations officer and consultant. I earned my Chartered Financial Analyst, or CFA, in 1998, and for those doubting my “credentials,” here is a list of the firms I worked for, or interned with, during my 15-year Wall Street career.
Firm | Position |
Paine Webber | College Intern |
Shearson Lehman Brothers | College Intern |
Merrill Lynch, Pierce, Fenner & Smith | College Intern |
A.G. Edwards & Sons | College Intern |
Prudential Securities | College Intern |
S.G. Warburg & Co. | Compliance Officer |
Cantor Fitzgerald | Bond Broker |
Kensington Partners | Buy-Side Analyst/Trader |
(Capital One) Southcoast Capital | Sell-Side Analyst |
Salomon Smith Barney | Sell-Side Analyst |
Of course, that’s just career number one, as since leaving Salomon Smith Barney in 2005 I have worked exclusively within the mining industry. I spent four years as an Investor Relations officer for junior mining companies, and one with Torrey Hills Capital, the largest U.S.-based Investor Relations consultant to junior miners, all while writing “RANTING ANDY” blogs and acting as, for all intents and purposes, an unpaid principal of GATA, the Gold Anti-Trust Action Committee. While working with myriad mining companies – at least 30 by my count – I also gained intimate knowledgeable of Canadian investment banks, which diligently work to destroy their clients the way U.S. investment banks destroy the nation at large, and the global financial system for that matter. For those seeking to impugn my “street creds,” I welcome you to contact anyone I’ve worked for.
Why am I writing this, you might ask? NOT to brag, and frankly I’m not sure there is much to brag about, except that I worked my arse off for two decades, observing a lifetime’s worth of unethical industry practices along the way. In other words, my “whistleblower” persona – RANTING ANDY – was borne mostly of NURTURE, and hopefully a bit of NATURE as well.
Most communications with readers are positive, but occasionally I am criticized, and take each message seriously. Some criticisms relate to my opinions, some my writing style, and some my contentious attitude toward the mainstream. As much as I would like it to be the case, I will never be able to appease everyone, but I like to think I am an amiable chap, and that such sentiment is reflected in my RANTS. However, beauty is in the eye of the beholder, so some will always believe otherwise. All I ask is to be shown the same RESPECT I extend to you, unless you are evil bankers and politicians seeking to harm or discredit me. If that is the case, I will continue to demonstrate the same level of RESPECT you have shown me – NONE!
I am very open-minded socially, viewing the entire world as a meritocracy. First impressions mean a lot, but the entirety of one’s work means more, and sometimes – though rarely – first impressions are wrong. I cannot promise you will like – or even agree with – my work, but that each of you will be treated with RESPECT if such sentiment is reciprocal. It matters not your age, business credentials, or social background. Heck, it doesn’t matter if you are friend, neighbor, colleague, or even FAMILY, so long as you RESPECT my right to an opinion, which I provide, by the way, free of charge.
My overarching view is we are all born equal, uniformly deserving of RESPECT and DIGNITY, and for as long as I live, and write, I will follow that credo. For those seeking to discredit, slander, or shed my reputation in a negative light, good luck. I write for Miles Franklin because its principals share the same “mission statement” about life, and if there’s one thing I hope to be remembered for when I die, it will be the RESPECT I have shown the world, and all individuals around me.
Hi Andy.. AGAIn . You are doing such a wonder service for me.. and all free.. I listen to Mark Levin each night and marvel at his legal mind and wonderful insight to how much this Obama Whitehouse is doing to all of us.. and I told you how I religiously read Jim Sinclair each day.. and NOW I have you.. I love the way you wont stop telling it like it REALLY is.. and you have no axe to grind .. just wonderful ways to be succinct to help us all.. I thank you HUGELY for that… I am lucky in that I can write thanks to you. JIm is so busy he cant get emails from em.. . But I often write to Dan Norcini.. he is great to pass things on to Jim.. I just know that my life savings over the last 6 years has been saved since I came across Jim.. I dont have much money now to invest since I put it all in silver.. and gold. the whole ball of wax.. Buying Eagles at 5.40 at one point from Investments Rarities of Jim Cooks.. I now have a tidy some in the deposit boxes and I am so glad that I did the gut level thinking back then..
I feel the same with you and JIm S.. how your understanding the game.. the real game of manipulation is being played off.. I think we metals people will win.. we are quiet and very silent.. but I am a tea partier that will see G&S I think go to Alf’s numbers of maybe 4500 in the next 5 years.. we shall see.. Then I can fish and retire to travel and maybe one day meet you and Dan and JIm .. I would love to go on a trip with Jim to Tanzania one day.. he would be great to listen to at a campfire.. Maybe it will all happen.. Again. if you ever come to Lanai please let me know.. I dont have much but I can take you bouncing around in my 43 jeep to go fly fishing for Bonefish!! Aloha.. and a big thanks.. Terry Baird
Terry,
Thanks so much, I appreciate it.
Diana and I went to Hawaii for our honeymoon in 2002, and spent a memorable day on Lanai.
Perhaps we’ll be back again, and if so I’ll definitely let you know!
Andy
HI Andy.. Please see the above note I have sent.. Thanks.. Terry Baird
Hi Andy,
I really enjoy reading your rants everyday. I am just starting out researching this fiat money situation.
I have three questions:
1. If all that stuff about owning mining stocks is true, why do guys like Embry and a lot of other goldbugs promote and recommend mining stocks, particularly the juniors?
2. What do you think about owning generic silver rounds vs minted coins?
3. As you so often say to protect yourself now, would a small investor be better off to own mostly silver and some gold or only silver?
Thank you!!!
Miro
Miro,
Thanks so much, and if your are just starting your research today, you are still ahead of 95% of the world, and 99% of Americans.
As for your questions:
1. Many people – including myself – believe mining stocks will rise sharply, but particularly Embry as he is biased by running one of the largest mining stock funds in Canada. I just believe the RISKS in mining stocks are not worth it when PHYSICAL will rise more than most stocks have EVER risen.
2. I have plenty of generics. Just be careful what you own, and who you buy it from. They cost slightly less, but have the same silver content. Many feel uncomfortable with generics because they are not widely known, or printed solely from government mints. I am not of that opinion, as I own many buffaloes and others, and believe eventually silver content is all that will matter. Please do your due diligence on generics, and if you have any questions, feel free to call Miles Franklin!
3. Gold and silver will BOTH soar, so I’d own some of each. Silver is more volatile (thanks to the Cartel), but will rise much more because it is more undervalued. Plus, it is better for barter because of its low absolute value.
Andy
Hi Andy,
Keep up the good work!
One question regarding your position on the miners…
Is there some level at which you would be willing to buy the miners or is this now an ideological matter and you won’t consider it regardless? I imagine at some price relative to earnings potential the “risk” become worth it for you at least for a percentage of your assets.
Thanks,
Steve
Steve,
Thanks so much, I’m just getting started.
As for miners, here’s my answer, from tomorrow’s (Thursday’s) RANT:
I have never said mining shares will not go up, only that the RISKS of holding them are not worthwhile given the extraordinary gains to be made in PHYSICAL gold and silver with virtually ZERO risk. For the record, my stance has always been that quality shares will have a huge move up once the Cartel is broken, but once that happens, be prepared to sell quickly before draconian government measures such as windfall taxes and nationalizations take center stage, at which point it will be GAME OVER for mining shares.
I hope this helps.
Andy
Hello, Andy. As one of your MANY fans I would like to offer my sincere thanks for the work that you do and the selfless manner in which you are willing to share these golden comments with the rest of the world. It is a joy to read your rants and I look forward to each and every one of them. Not that I agree with you 100% of the time by any means (high 90s for sure!) but there is always something in your writings that is like finding a new nugget among all the sand and gravel on the Internet. If I were to call your writing “thought provoking” that would be a definite understatement!
Thanks much for the WAKE UP! call. I have been researching the Fed, gold and silver as REAL money, and the alternative news sites for about a year now and I am continuously amazed at how many people out there are completely oblivious to reality. Were it not for guys like you, Shawn at SGT Report, GATA, Dave Morgan, Ted Butler, and many others I too would still be munching happily, eyes about 1/2 closed, and baa-ing from time to time! ACK! What a complete and terrible waste! 🙁
Anyway, please understand that you do have MANY fans out here in the world. I once heard a congress-critter say that every letter they received was the opinion of 5,000 voters because so few actually voice their opinions and concerns. I believe this to be true in your case as well, so don’t be discouraged by the few who reply with comments. Just know that you are a “bearer of light” in a world filled with darkness. Please keep up the outstanding and MUCH needed work! God bless.
Ed,
One of the nicest notes I have received, I am truly grateful.
Don’t worry, NOTHING will stop me from continuing with my mission of PROTECTION!
Andy
Hi Andy,
Thank you for the response. Helpful advice indeed. I am also wondering about this: As the currency meltdown slowly unfolds before us, what do you think about having personal debt as we move forward? That is, would it be wiser to throw cash in physical pm’s or use it to get out of debt now?
I’m not asking for financial advice, I’m just wondering what you would do or your take on it.
Thanks!
Miro
Miro,
I am asked this often, as it is a very tricky question.
Theoretically, in hyperinflation all debts are wpied out, so the temptation would be to borrow to the hilt and buy things of real value with the proceeds.
However, if hyperinflation doesn’t occur, or does so later than expected, one can be left with huge debt burdens, particularly if you lose your job, etc..
Thus, be very careful. Personally, I am averse to debt, but others may act otherwise.
Andy