As of 8:30 a.m. EST, Sept. 20, the US National debt was $14,744,278,404,668. That is over $47,000 per American citizen, over $131,000 per taxpayer. America is bankrupt and desperate to grab at any loose dollar within its reach.
-Five Min. Forecast
I get an increasingly ugly feeling that we are re-living 1930.
I was in touch with Bill Murphy (LeMetropole Café) and Andy Hoffman today. One thing we all agree on – this is NOT 2008 revisited. It is different and it is worse. The Fed is desperate and whatever they try does not work. Soon, they will be forced to announce QE3 and then gold and silver will rocket up! Andy Hoffman dropped me a note this afternoon. “It looks like the EU is about ready to announce a MASSIVE MONEY PRINTING EXERCISE. And the FED will JOIN them, you can take that to the bank.”
The markets are reacting to the Fed’s Operation Twist – everything is falling. Holding down long-term interest rates will not spur on more borrowing and more hiring. Unless the economy suddenly improves (not gonna happen) and the stock market suddenly reverses course and moves smartly up (not gonna happen), the Fed will introduce QE3 (this was always in the cards) and gold and silver will resume their strong moves up.
Jim Sinclair hit the nail on the head, last night, when he wrote:
Operation Twist will not have any significant impact on unemployment and the present softening economy. It will set up a situation for which only QE has application. It is that fact that support gold’s bullish trend.
I agree with Ed Steer (and Ted Butler) that the current decline in precious metals is bullion bank-driven. They will milk it for all it is worth and unload as many of their Comex short gold and silver contracts as possible. When they have forced the speculative funds out of the market, the prices will stabilize and resume their upward move.
Here is what Ed Steer wrote yesterday:
Here’s the 6-month gold chart. The price continues its bullion bank-driven decline…and at the same time, the 50-day moving average continues its relentless climb upwards. There’s about $40 between yesterday’s close and that moving average. It appears that JPMorgan et al are determined to take it out, despite the hugely negative news for interest rates and the US dollar. Let’s see if they make it…and if they do, by how much…and for how long.
Now it’s just a matter of waiting it out. Once the bullion banks have covered as many shorts as they possibly can in both silver and gold, then the price bottom will be in. But it’s a big unknown as to when that might be. And, as I said yesterday, we’re a lot closer to the bottom than we are to the top.
In case you haven’t noticed, platinum is now selling below the price of gold. In fact, it is $50 below gold and frankly, I have never seen it this cheap (relative to gold). If history repeats, it will soon move ahead of gold and it is an excellent buy right now.
The following analysis is by Bill Holter from LeMetropole Cafe. It is excellent!
(It shouldn’t take long for) gold to turn up and explode! This is NOT 2008 all over again. The markets across the globe are turning a huge “thumbs down” to yesterday’s Fed announcement. Instead of a rabbit, it looks like Fed pulled a huge turd out of their hat. Gold, Silver and the mining shares are taking a beating on the open this morning as the Dollar rockets against ALL foreign currencies in what can only be described as a “Pavlov’s dog response” with the help I am 100+% sure from the PPT. Thinking through the Dollar rally is a joke because fear of another economic collapse will only collapse federal tax receipts which can only make the Dollar’s footings that much weaker and precarious.
The big dump in Gold will be explained away as selling to meet margin calls in other underwater positions (may have some truth to it short-term) and that the Dollar is the true safe haven to which I call bullshit as loud as I can. The $1,700 level should hold and I think you can look for a true “outside day” within the next 2-4 days (maybe even today) that will prove bottom. It will be viewed as a “successful test” of the $1,700 level and turn higher out of nowhere. The current move I believe is 100% paper generated and cannot imagine any but the most retarded holders of physical metal letting loose of even 1 measly ounce!
This episode is ENTIRELY about the banks, sovereigns and THUS the entire financial system. If you knew that the system would fail today and not reopen tomorrow would you throw away your Gold and Silver positions? No, you would not. Neither would any other “sane” investors which is why at this juncture you have to believe that only paper is being sold (by the official sector) to try to scare people out of and away from Gold. THIS action is entirely about perception and nothing more. You will know that the current “game over” has gotten out of control when “they” lose control of Gold and Silver prices. This action could be later today, tomorrow or ANY day, it is very very close at hand!
As I said earlier, this is not 2008 all over again. It is FAR, FAR worse! Once the “insiders” realize that they have lost control, THEY will be piling into the precious metals with everything they have left. I fully assume that the “insiders” have already built huge and substantial positions in the metals as they know full well how this will end. The “outside” or “reversal” day that I am speaking of will launch a rally in my opinion surely larger in Dollar gains and probably bigger in percentage terms than anything we have seen so far in this 11-year old bull market so far. NOW is not the time to panic. Now is the time to KNOW that you have done the math and logic and that ownership of precious metals is THE ONLY safe haven when governments and their banking systems are bankrupting. Your math and logic are correct. Governments and their banking systems ARE bankrupting. Sit back and relax as far as your finances are concerned but make sure you are prepared to live in a different world where you must rely only on yourself for a period of time. YOU can be your own worst enemy by letting your emotions into your financial life, please, now is not the time to let this happen.