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It’s
still Thursday afternoon, and my wife is teaching so I figured I’d get
started on Friday’s RANT.
LOTS of
interesting things to tell you, and show you, starting with
the fact that for the second straight day, Miles Franklin has been very busy
with buyers taking advantage of the 100% PAPER-driven Cartel attack. In
fact, thanks to the Cartel’s dramatic gold takedown below its 200 DMA,
as well as rising fears of imminentmarket collapse, Miles
Franklin has seen, for the first time in two years, a dramatic increase in
the amount of gold sold, relative to silver. Silver is
by far the cheaper metal, but I expect many investors to associate what is on
the near-term horizon with what happened in late 2008 – wherein silver
declined more dramatically than gold – and thus are opting for
heightened near-term caution. Either way, BOTH metals are going up, and
investing in EITHER will PROTECT you from the upcoming chaos.
Based on what I
have read about the MF Global collapse, last week’s emergency Fed
“swap facility,” and deterioration of the European Union, I could
not be more certainGLOBAL MELTDOWN II commenced in November. I
believe the END GAME would have switched to terminal mode two
weeks ago if “the system” had not self-injected the WORLD’S
LARGEST CRACK DOSE, to avert the MOTHER OF ALL WITHDRAWAL SYMPTOMS.
Irrespective,
“MANIPULATION SATURATION” has set in, and NOTHING they do can buy
more than a few weeks of calm anymore. Several nations are
on the verge of collapse, as are dozens of banks, particularly
the “Big Three” French banks, whose stocks continue to plunge
into oblivion, and Bank of America, which despite MASSIVE PPT support, is
barely holding its head above the same key $5.00 share level that narrowly
averted breaking via the aforementioned emergency Fed
“swap facility” announcement. But not for long, I’m
SURE.
Speaking of the
PPT, I don’t think it’s EVER been more blatant how hard they are
working to prop the Dow up, including their early morning Futures goosing
EVERY TIME the Dow has a down day, and not EVER taking a breath in its 24/7
quest to prevent it from turning red, even for one minute. Notice how
on five separate occasions yesterday it attempted to
turn red, rescued each time in the exact opposite manner that
PMs are prevented from turning green.
Such as was the
case with GOLD, which rose ALL NIGHT in the global, PHYSICAL-dominated
market, until EXACTLY the 8:20 AM EST COMEX open, when itplummeted for
no reason, by a whopping $35. No other market budged, just
gold and silver, which remain entrenched in the clutches of “OPERATION
PM ANNIHILATION II,” to be discussed further below. Another WATERFALL
DECLINE at the PM Fix at EXACTLY 10:00 AM EST, a hard cap when
gold tried to surged at the “cap of last resort” time of EXACTLY
12:00 PM EST, and even some Dow / Gold x 2 ALGOs to push it down further in
the afternoon.
And
wouldn’t you know it; both major attempts to rise
today were stopped just below the KEY ROUND NUMBER of $1,600/ounce. No
worries, by this time next year, $1,600 will be a distant memory, NEVER to
trade there again, or even within earshot.
 
Before I
forget, I want to return to gold lease rates, which as I pointed
out yesterday, have moved up towards positive territory after spending
several months below zero, not coincidentally commencing EXACTLY the week in
late August when gold surged to a new all-time high above
$1,900/oz. The concept of “gold lease rates” is so
ridiculous, and revolting, I have a hard time even thinking about
it without getting nauseous. NOTHING screams PURPOSEFUL SUPPRESSION
more than the fact that “lease rates” tend to hover around zero,
andbelow zero when the Cartel is really on the offensive.
And I put “lease rates” in quotes, by the way, as in many ways I
don’t believe they even exist, other than as a Cartel
“signal” to its puppet traders that additional PAPER raids are
upcoming.
The concept of
“gold lease rates” is that certain parties desire to lease a
“dead asset” such as gold, sell it, and reinvest the proceeds in
higher yielding assets. In practice, one would pocket the difference
between the ultra-low 1% lease rate and higher yielding bonds then return the
leased gold back to its owner. A fantastic strategy when gold is in a
bear market and bonds in a bull market – but not so good when gold is
rising (and thus more expensive to re-acquire and repay the owner) and bonds
falling (yielding losses on the bastardized “carry trade”).
When Barrick
and JP Morgan were sued by Blanchard & Co. in 2003, it was for this
disgusting, suppressive practice, and don’t forget that Barrick, to
this day, has been allowed by its partner, the U.S. government,
to fudge the accounting of its hedges based on an assumption it has an
endless supply of “deep storage gold” in the ground. And
yes, the government was their partner in crime, as Barrick
tried to have the case thrown out (unsuccessfully) using this argument.
Nearly 12 years
into the gold bull market, with the global financial system on the brink
of collapse and Central Banks net buyers of
gold, the concept that this ridiculous gold leasing practice is legitimately
ongoing is an insult to the collective intelligence of the market. Then
again, “the market” isn’t as smart as it used to be,
and, as always, when it comes to PM manipulation the ongoing
mantra is “see no evil, hear no evil.”
Negative interest
rates imply that one is being PAID to lease the gold and sell it, or better
put, BEGGED to do so. Why not just sell it yourself if you’re so
eager to get rid of it, and save the 1% of interest? I mean, can you
imagine paying your bank to hold your
money? Scratch that, we had negative interest rates on
T-bills earlier this year, as the U.S. banking system has become so poisoned
that many investors trust the U.S. government more than their local banks!
Anyhow, I
don’t believe the Central Banks have much, if any, actual
gold to sell, though rumors abound that Greek or Libyan gold has been
commandeered to flood the market and buy a bit more time. I mean,
seriously, if the Bank of England were involved in the selling operations
reported last Thursday, and they barely have ANY gold of their own, then
where the heck did they procure it?
Suffice to say,
the Cartel was DESPERATE to get ANYONE to sell whatever stash of gold they
had available, and by setting lease rates below zero could kill two birds
with one stone, by signaling” puppet PAPER traders that a big smash was
coming, encouraging them to aggressively sell and add shorts, backed or naked
not material of course.
As you know, in
doing so they knocked the PAPER gold price 3% below its 200 DMA, an extremely
rare occurrence as pointed out in my past two RANTS. Not only
does such an event occur as regularly as a total eclipse, but during a period
of maximum positive fundamentals is truly a gift to buyers, hence the surge
in PHYSICAL gold buying at Miles Franklin and other bullion dealers this
week.
Moreover, in
doing my internet rounds this afternoon, I came across the following chart
from an old comrade of the gold industry, Eric Hommelberg. Fellow
Coloradan “Dave from Denver” posted the below commentary on the
GATA website this weekend, putting the long-term technical oversold condition
of gold in another light. Per Hommelberg’s “RGold” calculation,
gold is currently OFF THE BOTTOM OF THE CHART right now, perhaps one of the
best buying opportunities in YEARS!
Eric Hommelberg
does not freely publish his work anymore, but he follows a metric known as
“Rgold”, or “Relative Gold.” This is the spot price
of gold divided by the 200 DMA. The chart below just shows 2004-2008, but
please note that whenever the Rgold metric rises above 1.20 it is a
definitive “sell” signal, and conversely when it falls below 1.00
it is a definitive “buy.” Right now, that measurement is
0.93, which equals a BUY with both hands. Here’s the chart:
Not only that,
my good friend Mike Krieger, also a former Wall Street analyst who moved to
Colorado for a better life and escape from pervasive New York corruption,
alerted me that the Dow/Gold ratio has reached an EXTREME, long-termoverbought
condition, BEGGING to be sold here – manipulation or not.
This ratio started rising precisely when “OPERATION PM ANNIHILATION
I” commenced in late August, and now its Relative Strength Index, at
the top of the chart, has reached its MOST OVERBOUGHT CONDITION IN AT LEAST
YEARS, possibly of the ENTIRE DECADE. In other words, the odds are
strongly that gold is about to make a significant move higher relative to the
Dow.
Finally, a word
to assuage frustrated and/or scared PM
investors worried that the biased media and Wall Street finally have
it right, that in their fiftieth or so attempt they have finally called
the “end of the gold bull market.” Don’t make me
laugh, that group of socialist, government-backed jackals won’t EVER be
right, about anything, much less the MOST POWERFUL BULL MARKET OF
ALL-TIME, one they have been wrong about since day one!
What we just
experienced is yet another PAPER Cartel attack, perhaps
the fiftieth in my 9½ years of fighting them, not
even close to their best efforts, and with larger, more identifiable
footprints than ANY I’ve witnessed. All they did was create one
last opportunity to buy gold well under $2,000/ounce, although be warned, the
larger the size you intend to buy, the harder it will be to secure PHYSICAL
metal at these bargain prices (ESPECIALLY if you are an Eastern Central bank
– read, CHINA – looking to buy in real SIZE).
Below is a
chart of gold’s jagged rise over the past four years, starting just
before GLOBAL MELTDOWN I commenced in mid-2008. As you can see, gold
experienced numerous “interim tops,” in nearly all cases
due to Cartel attack operations per its overarching goal of slowing the PM
bull, NEVER allowing it to surge parabolically (as it so
yearns to do) and thus draw speculative fervor (i.e. GREED) and, more
importantly, panic buying (i.e. FEAR). GREED will be what draws
gold’s attention, but FEAR will ultimately break the Cartel’s
back, and these yin and yang emotions go hand-in-hand in the unique, precious world
of PHYSICAL gold and
silver.
I have written
often of “THE WAITING,” i.e. the seemingly interminable periods
between interim tops, how tortuous it seems and how LONG. Due to the
aforementioned, unrelenting Cartel pressure, Gold has ALWAYS displayed the
unique, frustrating property of gnashing for months before finally
surmounting Cartel-induced “walls of worry” to reach new ALL-TIME
HIGHS, only to IMMEDIATELY crash (TO A HIGHER LOW) and start the process of
climbing anew. Kind of like Sisyphus pushing the boulder up the hill,
only to have it roll back down; although in this case, the gold bull pushes
the boulder higher each time, and is able to stop the boulder’s descent
at a higher point each time.
http://www.youtube.com/watch?v=K5MdFdAe_JY
Below is a
chart breaking down the periods between interim peaks over the past four
years, depicting how much time gold investors must “WAIT” with
the amount of time gold rises to new highs. It wasn’t easy
creating a table visualizing this concept, so please read carefully.
I started with
the first interim peak of 2008-2011, at, what a shock…the very KEY
ROUND NUMBER of $1,000/ounce. As expected, the Cartel attacked
viciously at that level, and per the second row of the table, it took 339
days to return to the $1,000 level, which just happened to be at the
height of GLOBAL MELTDOWN I, in February 2009 (yes, it IS a safe
haven!). The second to last column, “Time between Return-to-Peak
and Ultimate Peak” depicts the period from when that $1,000 price
finally returned and when gold reached its next interim
peak.
Unfortunately,
In February 2009 the Cartel was VIOLENTLY against gold surging through $1,000
during a time of maximum crisis, and thus wouldn’t let it rise further,
hence the “0 days” entry in that column, followed by another 214
days of “WAITING” until $1,000 was again reached by Sisyphus –
er, gold. Gold then rose 20% in the ensuing 70 days, before yet
another Cartel attack yielded yet anotherinterim peak at
$1,195/oz, and yet another long period of
“WAITING,” this time 229 days, before $1,195 was again reached.
Per the bottom
row of the table, the TOTAL amount of time in which gold was rising past an
interim peak to a new ALL-TIME HIGH was just 342 days, compared to 1,256 days
of “WAITING” to return to a previous peak. In other words,
for the past four years, gold has been below an
interim peak an astounding 79% of all trading days, creating the
ILLUSION it is “always falling” even though, in actually, the
short bursts of those 342 days more than made up for the tortuous,
frustrating PLUMMET and CHOP of the other 1,256.
This ILLUSION
works wonders in demoralizing investors, particularly those
“doubling their pleasure” by simultaneously investing in mining
shares, which I will never again do for reasons discussed ad nauseum in
recent RANTS. For example, take a look at the action of the HUI mining
index over the past three years, a jagged saw-like chart depicting no less
than 19 significant declines in 36 months. If gold is only rising to
new highs 21% of all trading days, I’m guessing the same calculation
for the HUI would show it to be advancing to new highs on no more than 5%,
the ULTIMATE in investor torture (thank you, ALGOs!). Moreover, in
recent years the HUI has DRAMATICALLY underperformed GOLD and SILVER
themselves, although who knows what that relationship will look like in 2012.
Next, look at
the Dow’s three year chart, the polar opposite of the
HUI in that itnearly always rises smoothly, with essentially no
volatility no matter how bad the news. Inevitably it does have declines,
as PPT or not, there are still SOME legitimate market participants left, and
during periods of maximum FEAR even the PPT must concede declines – at
the least, for appearances sake.
But just as
EACH and EVERY HUI spike is met by an immediate WATERFALL
DECLINE, each and every Dow decline is met by immediate, maniacal
support. When “periods of maximum FEAR” inevitably
occur, they just step up such support, particularly at KEY
ROUND NUMBERS, such as the VERY KEY 10,000 level defended so vigorously for six
months in mid-2010, and the 11,000 level that has been equally vigorously
defended for the past four months.
In other words,
readers, “WAITING” periods are simply “gifts from the
gods” (those same gods that cursed Sisyphus), to be utilized accumulating PHYSICAL
gold and silver in advance of the brief sprints to NEW ALL-TIME HIGHS, when
one of these days the Cartel will LOSE CONTROL, yielding the aforementioned
PANIC buying that will ultimately break them, yielding
supply shortages that will make it all but impossible for late entrants to
PROTECT THEMSELVES.
And one more
article before I retire for the night, to yet another soccer game. The
article below by Casey Research depicts some of the supply factors to be
considered when investing in gold. Note that production peaked nearly a
decade ago, and due to rising production costs and political risks it will
take some time to surpass that peak, while simultaneously investment demand
EXPLODES exponentially, such as the 4,000% increase in Chinese
gold exports from a year ago.
Wow! China Gold Imports Spike
4,000% y-o-y
The most important
charts below are the last three, depicting rising investment
demand compared to jewelry and other uses, the end of
Central bank and investor selling, and the even distribution of
investment demand by geographic region.
Guest Post: What Gold Supply
Crunch?
Hopefully, this
section has convinced you how strong a buying opportunity exists NOW for
gold, which WILL likely end its “WAITING” period in early 2012,
and prepare for its INEVITABLE surge past $2,000 per ounce!
OK, it’s
Friday morning, and I’m fired up anew over yet another instance
of unbelievably BLATANT Cartel/PPT activity. All you need to see is
today’s gold chart to observe that, for the second straight day, gold
rose ALL NIGHT until the SECOND the COMEX opened at EXACTLY 8:20 AM EST, when
gold suddenly plummeted $15, losing HALF its overnight gains in the first 30
minutes of COMEX trading. Look at the green and red charts of the last
two days, up until the COMEX opening – IDENTICAL!
Not only did
PAPER gold get attacked at its usual time, but was stopped at
+$31, or EXACTLY the 2% daily cap limit imposed on 99% of ALL TRADING DAYS
over the 11+ year bull market, at EXACTLY the KEY ROUND NUMBER of
$1,600/ounce! Meanwhile, as always Dow futures were higher all morning,
surging 50 points in the first five minutes of NYSE trading to “set the
tone” for the day and make sure the week concludes on a positive note,
again above 12,000 if the PPT gets what it desires.
And ditto for
PAPER silver, which rose ALL NIGHT until EXACTLY the 8:20 AM COMEX opening,
when it was stopped pennies from the KEY ROUND NUMBER of
$30/ounce before it’s usual, daily WATERFALL DECLINE.
So what
occurred overnight that’s so BULLISH for the Dow, bullish enough to
push it above 12,000 (and the KEY 200 DMA of 11,940) for the umpteenth time
this fall, while GLOBAL MELTDOWN II simultaneously progresses?
Could it be
news that China’s economy is significantly slowing…
China Export-Growth
Officially Slowing: Trade Deficit Coming?
…or that
it imposed huge tariffs on American auto imports?
I find it
hilarious that the press talks about how “horrible” this act is,
when in fact China is simply retaliating to similar actions
undertaken by the U.S., per the title of the article…
China Gets Revenge On Obama
With Tariff On U.S. Autos
And speaking of
China, not only has it taken over the world’s manufacturing crown
from the U.S., but banking leadership as well (for what
that’s worth)…
Charting China’s Take
Over Of The Banking World… And A Stark Warning
Compared to
China, the U.S. is becoming an also-ran in nearly all categories.
However, it still throws its weight around, in an increasingly arrogant,
aggressive fashion, because the dollar remains the “world’s
reserve currency.” In other words, “it may be our dollar,
but it’s your problem.” Ah, young
grasshopper, but for how long?
China’s first aircraft
carrier spotted at sea
Today’s
westward journey of “horrible headlines” takes a pit stop down
under, where lo and behold even Australia is locked in the vise-like,
GLOBAL grip of the European crisis. Sorry mates, your banks, too, are
ensconced in the daisy chain of bad debts and derivatives centered in
EUROPE but created by AMERICA. Throw in the fact that
the Aussie dollar, too, is a fiat currency – as is
EVERY CURRENCY ON EARTH – and you can see how NO NATION IS IMMUNE to
the economic conflagration set to consume the GLOBAL
financial system. Some nations will fare better than others – and
I’d guess Australia is one of the former – but ALL will see
massive debt defaults, rising inflation, and declining standards of living
when the dollar-based GLOBAL fiat currency system collapses, prior to
creation of a new GOLD STANDARD.
Australian Banks Given One
Week To Prepare For European “Meltdown”
Next stop,
Russia. No matter where one looks these days, the pre-World War III
drums are beating, with IRAN squarely in the cross-hairs as its focal
point. I don’t know WHEN, or by WHOM, but SOMEONE will manufacture
a conflict with Iran in the coming months, or years, and when they do, will
find a large, aggressive, well-armed, West-hating, nuclear-equipped army
waiting for them with rage in its eyes. I shudder at the thought, as
mankind never learns its lesson.
Russia Intercepts Radioactive
Shipment To Iran
On to Europe,
where as you can imagine the list of horrible headlines is as long as
ever. But don’t worry, the stocks are higher! All’s
well!
First to
Eastern Europe, where the contagion is just as powerful. It looks like
Hungary is about to collapse, with its huge banking ties to the AAA-rated
(LOL) nation of Austria…
Hungarian Rescue Talks Fail
And then to
Western Europe, where the IMF is begging the rest of the world for
help…
IMF Says Europe Crisis
Escalating, Needs External Assistance
And how about
this knee-slapper? That the DOA EFSF fund is still making headlines is
pathetic enough, but given that Italy and Spain are two of the top candidates
for near-term bailouts, isn’t it ironic that these two
financial zombies are responsible for funding one-third of
the fund? Only in today’s bizarre world!
Revised EFSF Draft Shows
Italy, Spain Responsible For One Third Of European Bailout Funding
Speaking of
bailouts, I see Fitch downgraded EIGHT global banks last night, including
major European banks such as BNP, SocGen, UBS, and Deutschbank, and the two
American banks most likely to lead the upcoming daisy chain of bankruptcies
– French-noosed Morgan Stanley, and PPT-supported above $5.00/share
Bank of America!
And speaking of
“French-noosed,” I wonder how many people realize that GERMANY,
considered a pillar of financial conservatism, owns 90% of all French
government debt!
Fitch Downgrades 8 Global
Banks Including BNP, SocGen, BofA, Deutsche, Morgan Stanley and
UBS
Sticking with
the ugly topic of French finances, in light of yesterday’s accusation
by a Bank of France official that the UK, not France, should be downgraded
(more of the political infighting I have spoken of), it
should be pretty clear BOTH nations are in trouble, and likely the UK more
so given that these figures only discussgovernment debt.
To wit, as horrific the condition of France’s “Big
Three” banks, they pale compared to the recklessness of UK banks, which
have borrowed nearly as much as French and Italian banks COMBINED!
UK Vs France: You Decide Who
Is Worse
While on the
topic of sovereign borrowing, here is a table listing debt/GDP of major
Western nations, not including “off-balance” sheet items, of
course, which in the case of America includes the expanding losses, and thus
debts, of Freddie Mac and Fannie Mae as the epic U.S. housing bubble
endlessly bursts. And how about that, the U.S. trumps BOTH the UK
(E) and France (F ()!
In other words,
if not for its “world reserve currency” status of the dollar, the
U.S. would be wallowing amidst the PIFIGS pen!
Of course, when
considering the $114 TRILLION of American unfunded government
liabilities, the PIFIGS pen looks more like the Ritz-Carlton!
To give some perspective how much money the U.S. government owes (a number to
be shortly compounding at an exponential rate), below is figure
depicting how large a structure would have to be built to hold $114 TRILLION
of fiat dollars.
This figure,
shown on the right, is ENTIRELY COMPRISED OF $100 BILLS, totaling $114
trillion. In other words, a structure holding $114 trillion of one
dollar billswould be 100 TIMES HIGHER, or 33 MILES HIGH – above
the stratosphere, and into the mesosphere!
To finish this
section anticlimactically, I feel the need to include this article about the province
of Ontario, home of some of the most unscrupulous banking characters I have
come across, although not close to the criminals residing in
New York and London. Per the article below about the province of
Ontario under scrutiny for potential downgrade, and the above article about
Australia preparing for a European bank collapse, NO NATION ON EARTH is
immune from the economic tsunami about to wash across the world’s
shores, DIRECTLY resulting from the TOWER OF DEBT pictured above!
Moody’s Turns To Canada:
Ontario Outlook Revised To Negative, “Softening Economic
Outlook” Cited
And on to
today’s RANT topic, my idol and precious metals “father
figure,” Jim Sinclair.
I first met
Sinclair in January 2004, when I traveled to his winter home in Jupiter,
Florida for an intimate presentation to gold investors. Then, as now,
the sole purpose of his writings, and such meetings, was to empower people
to PROTECT THEMSELVES from the oncoming economic storm. That mantra has
permeated my personal and professional lives, and here I am eight years later
espousing the same sentiments to a readership of tens of thousands.
Sinclair is
known as “Mr. Gold” due to his unsurpassed knowledge of the inner
workings of the gold market, although he has an equal, unparalleled understanding
of the banking system and macroeconomics. He was talking about
DERIVATIVES light years before anyone else, and as the former operator of a
clearing firm, knows EXACTLY the ramifications of “fatal errors”
such as the MF Global collapse.
He has been
100% in his macro forecasts over the past decade, particularlyregarding
GOLD, and he is currently shouting from the rooftops that
gold his headed to $2,000/oz, then $4,500/oz and significantly beyond, per
comments in this exclusive interview Wednesday afternoon, following that
day’s incredible $60/oz COMEX PAPER attack.
http://www.kingworldnews.com/kingworldnews
Sinclair
believes the headline of Cartel sales last Thursday, as well as essentially
everything out of TPTB’s mealy mouths since gold passed $1,900/oz in
August, has been JAWBONING, a last-ditch act of Central Bank cowardice before
all hell breaks loose.
Ignore Jim
Sinclair’s warnings at your own peril, or listen to them,
PROTECT YOURSELF, and SURVIVE and THRIVE in the upcoming GLOBAL economic
collapse.
Have
a great weekend
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