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TUESDAY AFTERNOON WRAP-UP 1/31/2012

Another crazy day, for both the market and myself.  It’s not often I get to see an icon (and personal idol) speak, which is precisely what occurred this afternoon at Ron Paul’s Denver campaign stop.  One of the most inspirational speeches I’ve ever heard, as espoused in today’s RANT topic.

As for the market, more of the same.  Perhaps I sound like a broken record at times, but there’s a method behind my madness.  Back on Wall Street, I learned the importance of being concise, focusing on the key points, and repeating prominent themes.  I may write a lot of words each day, but only a handful of messages – unerringly consistent and patently memorable.  Even a casual RANT reader understands PAPER gold is suppressed at four KEY ATTACK TIMES each day, the Dow supported with equal vigilance, PHYSICAL gold and silver are not investments but MONEY, and that one should PROTECT THEMSELVES from what’s coming, NOW.
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Today was yet another in a seemingly unending string of market farces, but then again “the market” no longer exists for reasons described in great detail in prior RANTS.  Retail equity participation was largely destroyed by the dotcom bust in 2000, but the last remnants were withdrawn last year amidst a “cash grab” for desperately indebted people the world round.  Hedge fund failures have been enormous since the commencement of Global Meltdown I more than three years ago, and HFT algorithms now account for roughly three-quarters of ALL equity trades.  Volume has long exited the building, and per the article below, by far the highest concentration of volume is at the end of the day, when coincidentally we tend to see “HAIL MARY” rallies approximately 90% of the time.

Dead Market Exhibit A: January Volume

Today was yet another perfect example of how the government controls the market.  With European markets relatively flat, waiting with baited breath for the unending Greek debt negotiations to conclude , the news out of the U.S. was bad, bad, bad, starting with yet another horrific Case-Shiller real estate reading…

No Housing Bottom: Home Prices Decline For 7th Consecutive Month, Lowest Since 2003

…an “unexpected” decline in the Chicago Purchasing Manager’s Index, featuring a dramatic decline in the employment component…

Chicago PMI Misses, Prints At 60.2, Down From 62.2, Dashes Hopes For Rebound

…an admission by the Congressional Budget Office, or CBO, that Bureau of Labor Statistics (BLS) unemployment statistics are understated…

Latest Congressional Budget Outlook For 2012-2022 Released, Says Real Unemployment Rate Is 10%

…and the latest blow to once great Sears, on the road to certain bankruptcy.

Sears Plunges As CIT Reins In Loans (Again)

Dow futures were down 60 all morning, but miraculously the “world’s most important stock index” never fell as low as the key 100 point level I described yesterday as NO LONGER ALLOWED.  Once the PPT stabilized the Dow around midday, it was yet another unstoppable, non-volatile climb toward the unchanged level, just as we saw yesterday.

As for Precious Metals, as always, the polar opposite.  One would think a $349 million order for PHYSICAL gold by the Sprott trust would enable gold to rise more than the standard 1% capping level, but not so, as not one but two surges were stopped cold at the 1.0% level.  And would you look at that, yet again at the Cartel’s line in the sand at the KEY ROUND NUMBER of $1,750/ounce.  The first time gold tried to surge to $1,750 was at EXACTLY 3:00 AM EST, and the second at the PM Fix at EXACTLY 10:00 AM EST.  Not only that, but when the Dow fell by 60 points, or a measly 0.4%, at around 12:00 PM EST (the “cap of last resort”), PAPER gold suddenly plunged 1.0%, silver 3.5%, and the HUI mining index 4%.  Geez, how dumb do we look?

All day long the Dow / Gold x 2 ALGORITHM operated in its full glory, from the second I walked into the gym at 4:30 AM MST until the NYSE closed, yet the end result was a just a modest loss for the Dow, silver, and the HUI, and a $13 gain for gold, relentlessly held below the Cartel’s $1,750/ounce line in the sand.  Then again, EURO GOLD had another big day, surpassing all but its peak point in early September on fears of imminent PIIGS-led contagion.  Watch this space, as it could get VERY, VERY interesting this spring.

Of course, the Dow’s flat overall performance – care of its old friend “HAIL MARY” – flew in the face of an incredible barrage of “horrible headlines,” one worse than the next and some potentially CATASTROPHIC.  For starters, the imminent downgrade of scores of banks from Portugal and Spain, the two nations directly behind Greece on “PIIGS death watch”…

Various Portuguese Bank Ratings Placed On CreditWatch Negative After Sovereign Downgrade, Others Remain On Watch

S&P increases number of Spanish banks rtgs on watch negative

Next, heightened threats of damaging trade wars with the Chinese…

Labor Unions Demand Escalation Of Trade War With China, Ask Obama To Restrict Chinese Auto Part Imports

Then, an incredible announcement making Jim Sinclair’s urgent commentary last night look that much more prescient.  In his late night interview with the Ellis Martin Report, he warned of the ISDA’s upcoming, untenable choice between characterizing a 70% Greek debt write-down as a default or not.  However, at today’s “debt swap negotiations,” new proposals were made to write down Greece’s debt by more than 70%!  The fact the ISDA is run by the same criminal banks – Goldman Sachs, JP Morgan, etc. – that created these worthless securities is bad enough, but even they will not be able to avoid the term “DEFAULT” when the write-offs are nearly 100%.

Greece Releases New Proposal With Even Greater Losses To Creditors

Goldman and JP Morgan may have the world’s politicians in their pocket, but cannot create a virtual reality where DEFAULT is not DEFAULT.  I don’t care how many politicians and judges they buy off, no “exemption” from regulation will prevent Greek, and other PIIGS assets, from eventually being marked to reality, i.e. ZERO.  And if you think that’s bad, just wait until the contagion leaves European shores and affects the UK, U.S., and the rest of the world.

Goldman, JPM Attempting to Exempt Swaps Books from Regulation

Late in the day, with the Dow relentlessly marched toward breakeven for the second straight day, the PPT was feeling quite smug, having won the battle against so many “horrible headlines” with unstoppable Dow Futures purchases with PRINTED MONEY.  After all they had been through already, it must have been a shock to see this headline hit the tape in the market’s final hour, of an EMERGENCY CRISIS MEETING due to breakdown of the aforementioned Greek debt negotiations.

Greece Calls Crisis Meeting As Debt Talks Stall

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WEDNESDAY MORNING COMMENTARY

Ho hum, another day in the Bizarro World, impervious to ANY and ALL negative news, which per yesterday afternoon’s commentary continues to besiege the markets from all conceivable angles.  Even Zero Hedge’s 24/7 team is getting some sleep due to the current mental “LOCKDOWN” caused by incessant MONEY PRINTING, MARKET MANIPULATION, and unending PROPAGANDA by TPTB.

The only “positive” overnight news was that the Chinese PMI Index – one of the most manipulated on Earth – came out at 50.5 vs. “expectations” of 49.6.  Happy days are here again!  Not to mention the “positive news” that India’s Central Bank has joined the GLOBAL QE movement by agreeing to purchase sovereign bonds in the face of exploding national inflation rates.

RBI says to buy up to Rs 100 billion of Bonds

On the military front, it’s always encouraging to see the “foreplay” in front of what could shortly become World War III…

In Advance Of Third Aircraft Carrier Approaching Iran, US Nuclear Sub And Destroyer Enter Red Sea

…especially when evidence that the “undisputed military champion of the World,” the United States, has been utterly decimated by a group of under-armed, undermanned, undercapitalized, undertrained, religious zealots in the mountains of Afghanistan.

Taliban “poised to retake Afghanistan” after NATO pullout

In Precious Metals news, the final figures are in for January 2012 Silver Eagle sales (subject to upward revision), which looks to be the second strongest month EVER.  In the below table, I’ve listed the Top 10 sales month since the U.S. Mint’s Silver Eagle program commenced 26 years ago, ALL in the past two years.  Please read the comments to the right, noting the strongest months resulted from EITHER surges to new highs OR Cartel attacks to new lows.   THIS is why I emphasize that the Cartel appears to be “boxed in” between $30/oz and $50/oz, as PHYSICAL sales rocketed higher when gold reached $50/oz in May 2011 and $45/oz in August 2011, as well as when silver was attacked below $30/oz in both September 2011 and December 2011.

TOP 10 MONTHLY RESULTS, U.S. MINT SILVER EAGLE SALES
SINCE PROGRAM INCEPTION IN 1986

Silver Eagle Ounces

Month

Comment

6,422,000

Jan-11

Silver breaks $30/oz for first time in 31 years

6,107,000

Jan-12

Following “OPERATION PM ANNIHILATION II”

4,460,000

Sep-11

Following “OPERATION PM ANNIHILATION I”

4,260,000

Nov-10

PSLV IPO – Silver stopped at $30/oz on “D-DAY”

3,679,000

Aug-11

Gold reaches all time high, silver at $45/oz

3,653,000

May-11

Silver reaches all-time high of $50/oz.

3,636,000

May-10

Silver reaches $20/oz for first time since early 2008

3,592,000

Jan-10

Following Dec. 15% Cartel Silver price attack

3,402,000

Jun-11

Following “SUNDAY NIGHT PAPER SILVER MASSACRE”

3,381,000

Mar-10

Following Jan/Feb. 17% Cartel Silver price attack

As for gold this morning, how much better can the Cartel make me look?  Just before the COMEX open at 8:20 AM EST, gold pushed above the KEY ROUND NUMBER of $1,750/oz for the first time since the commencement of “OPERATION PM ANNIHILATION II” on December 8th – just before the infamous, later retracted, but never denied “gold sale headline” appeared.  I could not be more emphatic about how staunchly this level has been defended over the past four months, and this chart says it all.

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RON PAUL – AMERICA’S GREATEST MAN

Oftentimes, the world goes generations between the existence of true leaders.  Not just people with charisma, military expertise, or financial sense, but ALL of those characteristics and, equally importantly, a desire to restore the nation’s greatness.  Such “good, smart people” are rare to start with, let alone in politics, a field littered with shady characters and conflicts of interest.  Ron Paul is one of those true leaders, and we should all play a part in spreading his message.

It matters not whether you are “Democrat” or “Republican”, or “Liberal” or “Conservative,” and it certainly matters not your age, race, religion, or marital status, as ALL AMERICANS should fight for freedom and personal liberty, and with it salvation of our dying nation.  Few have contributed more to America over the course of a lifetime, and none residing in Congress.  None of Ron Paul’s competitors understand why America is failing, and none have a plan to improve it, let alone save it.

This afternoon, I was privileged to attend Ron Paul’s Denver campaign stop, a sold out event of more than 1,000 loudly cheering followers, standing-room only.  This group understands the nation is on the precipice of social, political, and economic collapse, with only one voice of reason emanating from Washington.  I have never attended a political rally, and did not expect to be so awed by the character of his speech, practicality of his message, and overarching desire to take back the enterprising, freedom-loving nation he grew up in.  But wow, was I!

One of the few non-attorneys in the U.S. government, Ron Paul was an obstetrician for nearly two decades, delivering more than 4,000 babies and spending five years as a medical officer in the United States Air Force. Since entering politics in 1976, he has served 12 terms in Congress, not once voting for a tax increase or earmark, one of the few voices of reason in an erstwhile landscape of self-serving babble.

For those dismissing my views, think of all the failed politicians America has experienced in recent decades, particularly since America “peaked” at the turn of the century.  One after the other, U.S. “leaders” have allowed our liberties to be dissipated (often by their own hands), made egregious financial and military decisions, and displayed a complete lack of compassion for, and humility amongst, the nation’s 300+ million citizens.  Watch the two videos below, compilations of some of Ron Paul’s most prescient forecasts of the direction of America, and tell me if another in Congress, much less a boob like Obama or cretin like Mitt Romney, could do better.

The Amazingly Accurate Predictions of Ron Paul
The Amazingly Accurate Predictions of Ron Paul
Ron Paul Predicted 9/11 a Decade Ago!!!!!!!!!!!!
Ron Paul Predicted 9/11 a Decade Ago!!!!!!!!!!!!

Ron Paul wants to END the single most destructive – and UNCONSITUTIONAL – entity in this nation, the Federal Reserve, and restore the definition of DEFENSE, as opposed to the military-industrial complex funded OFFENSE we play today.  He also wants to shrink government, balance the budget, end the “welfare society,” and encourage people to use their own skills to advance, not subsidies, affirmative action, and other non-competitive means.  His agenda is not about politics, but SAVING AMERICA!

I fully understand Ron Paul’s chances are slim, and frankly believe the election process has become as rigged as the financial markets.  Wall Street wanted Barrack Obama in 2008, and today they want Mitt Romney, just as they want higher stock prices and plunging gold.  I cannot say what will happen between now and November 6th, but can assure you the current crop of politicians will make it much, much worse.

Only Ron Paul can lead this nation with a dignity that would be respected worldwide, and only Ron Paul gives us a chance to constrain the evil, freedom-stealing agenda of TPTB.  Please think long and hard about your view of America’s future, as time is running out before WAR, HYPERINFLATION, and SOCIAL UNREST become the dominant issues of the day.