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Today’s
RANT is being written in stages, the first between Montreal and Minneapolis
Friday night and the second Sunday morning, en route between Minneapolis and
Denver, with the third and final stage to be completed Monday morning.
Given the unending torrent of “horrible headlines,” I wanted to
use my flight time to commentate on the myriad news items, and propaganda,
around us.
Let’s
start with Friday’s insane activity, particularly the NEW ALL-TIME HIGH
in market manipulation observed across the board.
Since
Tuesday’s watershed GLOBAL QE EVENT, the Dow has been propped up by PPT
buying more than at any time I’ve ever observed.
Not only has the Dow been vehemently supported above the KEY ROUND LEVEL of
12,000, it simply has not been allowed to turn red for even a few
minutes. Meanwhile, the markets most amenable to MASSIVE, WORLDWIDE
MONEY PRINTING – gold and silver – have been so viciously capped,
it is hard to believe anyone can no longer see it.
Not to mention,
on Friday we saw a huge miss versus “whisper
numbers” of the monthly NFP jobs report, despite the popular propaganda
that it was “in-line” with expectations. For perhaps the
fifth time this year, the comical “ADP employment report” came
out Wednesday way above “expectations,” prompting giddy media
shills to proclaim the end of the recession. However, as usual the ADP
report had absolutely zero predictive value of Friday’s NFP report,
which was roughly in line with the cruddy expectation of 120,000 job
additions during the month in which hiring of temporary holiday shopping
workers is greatest.
In other words,
please remember the #1 rule of economic data propaganda. If the ADP
report is “stronger than expected,” shout how bullish it is from
the rooftops, but if it is “weaker than expected,” completely
ignore it. Moreover, no matter how many times the NFP report fails to
correlate with the ADP report, continue to hype it up so it can be positively
spun when needed.
The job report
itself was another dud, highlighting not only how weak the U.S. economy is,
but how desperate the government is to ‘make a silk purse from a
sow’s ear.’ Yet again, with barely any statistically
significant change in overall jobs creation, the government reported
a HUGE drop in the “unemployment rate,” this time from 9.0% to
8.6%. Yes, despite the 120,00 jobs reported being EXACTLY in line with
expectations, the reported 8.6% unemployment rate was a huge 0.4% BELOW the
expected 9.0%!
Publishing such
rubbish is a mockery to the American public, which has seen REAL U-6
unemployment rise to near 1930s Depression levels. The reason for the
lower unemployment rate is the same as always – more and more people
dropping out of the labor force due to expiration of unemployment benefits,
and thus a lower amount of “unemployed” as the evil, twisted
Bureau of Labor Statistics defines it. In fact, labor force
participation collapsed last month to 64%, the lowest level
in 28 years, while the average unemployment duration period shot up 4% last
month alone!
Key Charts From The NFP
Report: Records In Jobless Duration And People Who Want A Job As Civilian
Labor Force Plunges
And speaking of
misleading economic data, who better than America’s worst
company, General Motors, to lie about its “progress” since
miraculously emerging from bankruptcy two years ago? Aside from making
the world’s worst cars, compiling one of the highest corporate debts in
history, and being run into the ground by the world’s worst executives
and most destructive labor unions, GM can now claim the title as the
world’s most aggressive channel-stuffers.
Remember, when
you are majority-owned by the U.S. government (as in the case of Freddie Mac
and Fannie Mae), your objective is to maximize output, NOT profits. And
minimize profits they certainly are doing, as dealer inventories hit an
ALL-TIME RECORD this month, as GM sets itself up for the quickest return to
bankruptcy in global history!
GM Channel Stuffing Surges To
All Time Record
As for
the substance of U.S. economic data, it is as qualitatively poor
as it is quantitatively. One of my favorite pursuits of late is
dispelling the PROPAGANDA that strong “Black Friday” sales
symbolize “improvement” of U.S. economic activity. For
reasons discussed in prior RANTS, I believe this year’s
“strong” Black Friday and “Cyber Monday” sales
indicate the opposite, particularly when some of the so-called
“gift items” aren’t really gifts at all…
Black Friday Gun Sales Break
Records
And speaking of
guns, I see the war drums beating still louder over Iran, where despite the
“consensus belief” that nothing will happen, the inflammatory
rhetoric seems to rise a few decibels each week. This weekend the
Iranian army appears to have shot down a U.S. drone flying reconnaissance
(i.e. spying) over the world’s second largest oil producer, and
don’t think this situation cannot escalate dramatically in a short
period of time, particularly during an election year with the incumbent
President’s approval ratings at an ALL-TIME LOW level.
Iran Military Shoots Down US
Drone, Threatens Response
Separately, the
U.S. national debt EXPLODED higher each week, and despite the incredible ado
created over the August ‘debt ceiling debacle,’ no one seems to
care that the “Super Committee” failed to approve cuts by so much
as a PENNY, laying the groundwork for a massive, $1.2 TRILLION
debt ceiling increase with ZERO corresponding spending reductions.
Despite
claiming it would further reduce U.S. debt ratings if legitimate deficit
reduction plans were not drafted, S&P has said NOTHING about the Super
Committee failure. Moody’s, too, hasn’t even addressed it,
and the best Fitch could do was reduce the U.S. outlook to
“Negative” from “Stable.” I cannot imagine the
level of political pressure being placed on those three firms to remain
silent, but have no doubt bribery and coercion are
a major part of the government’s approach to “dealing with”
this “national security” issue.
US Debt/GDP Hits Post WW2
High 99.5% Following $55 Billion Overnight Debt Increase: Total Debt Now Over
$15.1 Trillion
In Europe,
despite Tuesday’s “U.S. dollar swap” initiative – you
know, the one that was supposed to “save the world,” ECB bank
deposits plus emergency loans SOARED this week to a new RECORD HIGH as
European banks continue to FEAR and MISTRUST each other’s solvency, as
well as DOUBT their own respective abilities to survive…
So Much For The Bailout
– European Funding Situation Worst Since March, As ECB Deposits And
Emergency Loans Soar
…while
the newest Goldman Sachs Central Bank planner, Mario Draghi of the ECB,
prepares to completely destroy the Euro with ZIRP, and
potentially another €1 TRILLION of additional, FRESHLY PRINTED MONEY!
ECB lines up €1
trillion rescue – MEGA CHIONG!
…or
perhaps the Fed will do it for him, or with him,
as the two prepare to DESTROY the world for the benefit of the TBTF banks!
The Latest Rumor: Fed To Fund
IMF, Bypassing Congressional Refusal Of European Bailout
In Portugal,
the failing government proves my point further regarding why one
must consider moving assets to nations with reduced political and financial
risk, such as Canada. Following in the footsteps of the U.S. government
during this summer’s ‘debt ceiling debacle,’ Portugal has
officially stolen nearly €6 billion of pension fund assets to pay down
its SKYROCKETING, hopelessly irredeemable debts. But
feel comforted, hard-working Portuguese citizens – the theft of your
life’s savings will allow your profligate, sociopathic leaders to stay
in office another two months or so.
Portugal Is Latest Country To
Go “MF Global”, Raid Pensions Funds To Delay Fiscal Death
Meanwhile, in
Germany, the nation’s second largest bank, Commerzbank, nears
bankruptcy and/or outright government nationalization…
Germany Planning For
Commerzbank Nationalization
Like American
Airlines this Fall, perhaps if people had simply watched Commerzbank’s
stock without rose-colored glasses, or hallucinogens for that matter,
they’d have an inkling this was coming…
And don’t
kid yourself about Germany. Despite prevailing PROPAGANDA that it is a
‘bastion of financial strength,’ Germany, too has MASSIVE
national debt…
National Debt Clock – Germany
…in fact,
more so than even ITALY, although Italy has 30% fewer people and 30% less
GDP…
National Debt Clock – Italy
On to gold, the
PHYSICAL market continues to tighten as investors and Central Banks alike
pour depreciating currencies into REAL MONEY at a pace not seen indecades,
if not centuries…
Bank of Korea Increases Gold
Reserves by Massive Nearly $1 Billion or 39% in November Alone
As usual, both
the media and investment community fail to see the key financial trends of
the day, such as imminent bankruptcies (i.e. Commerzbank and American
Airlines), soaring unemployment, and, right under their noses, expanding
currency crises. While the Wall Street Journal, New
York Times, and other GARBAGE PUBLICATIONS mislead readers by focusing
solely on the “dollar index,” currencies around the world are
CRASHING amidst the early stages of GLOBAL MELTDOWN II, a trend which
will dramatically intensify in 2012.
Given the South
Korean Won’s 20% freefall this summer, DESPITE being Korea being one of
the world’s stronger economies, it should surprise no one that its
Central Bank is aggressively buying gold, nor that Indian citizens have been
maniacally a adding to positions amidst a nearly 20% decline in the Rupee
since August.
Analysis: India inches closer
to crisis as rupee retreats
Yes, readers,
this “flight to quality” is the unintended consequence of the
Frankenstein monster-like global fiat currency system that is destroying the
financial world today. Investors are not fleeing to the dollar because
it’s safe, but because it’s more liquid than
other currencies, which in turn enables the Federal Reserve to print as many
as it desires. As opposed to my analogy of Jack and Rose racing UP the
ship as it starts to sink, the bastardized, mangled global currency system,
in essence, is causing national central banks to race DOWN
the ship toward the most flawed, overvalued, and ultimately, most vulnerable,
currency!
And finally,
before I nod off during the last leg of my flight, and prepare for
“Tebow Time” later this afternoon, I wanted to once again
highlight the near impossibility of holding on to your capital in the PAPER
financial markets, be it in general equities, bonds, or the majority of
mining stocks.
The article
below depicts how, thanks to a COLLAPSING economy, MANIACAL PPT, and
DOMINATING HFT algorithms, the S&P 500 has now fluctuated 1,234 points
this year, or more than its entire value, while not changing in
price AT ALL.
Thousands, if
not tens of thousands of retail, institutional,
and sovereign investors have been DECIMATED in 2011, and if you think
that’s bad, just wait until 2012!
A Snapshot Of Ludicrous
Volatility: Since May 1 The S&P Has Travelled 1234 Points Yet Is
Unchanged For The Year
Next up, I want
to discuss one of my favorite topics, and perhaps one of the most important,
and BULLISH, for those considering initial, or additional, investments in
PHYSICAL silver. That topic, of course, is the continuing collapse of
open interest on PAPER metal exchanges, particularly the New York COMEX crime
den.
As long-time
readers know, my long-time opinion regarding the likely direction of COMEX
open interest has been contrary to the consensus. The prevailing
thinking has been that as the PM bull expands, so will open interest,
eventually leading to the piddling COMEX inventory being taken out, yielding
a force majeure event that ends the COMEX’s criminal
grip on PAPER gold and silver prices.
However, I have
long held that the COMEX inventory either doesn’t exist or is
encumbered, yielding the likelihood that essentially ALL inventory data are
outright LIES. For instance, the fact that COMEX physical silver
inventory uncannily refuses to budge below 100 million ounces – even
during periods of EXTREME demand – should speak volumes about
the fact that “something is rotten in the state of
Denmark.” But STILL the “investment community”
believes thegovernment-published data, no matter how illogical it
seems.
I have also
believed the COMEX’s stranglehold on PAPER metals pricing would end in
the opposite manner than the consensus belief, with open interest PLUNGING as
traders flee this snake pit of manipulation out of sheer desperation to hold
on to their remaining, scant capital. And if the MF Global bankruptcy,
in which the Company pilfered more than $3 BILLION of customer funds while
the CME stood idly by, doesn’t convince you I am right, I’m not
sure what will…
Puplava interviews Ann
Barnhardt re MFG/Corzine crime
But then again,
that’s why I support my conclusions with empirical evidence,
such as the fact that COMEX silver trading volume PLUMMETED 42% in November,
a direct result of the MF Global collapse at the end of October.
http://www.cmegroup.com/wrappedpages/web_monthly_report/Web_
Volume_Report_CMEG.pdf
But this trend
of plunging open interest started nearly two years ago, accelerating this
Fall as an ‘unintended consequence’ of the Cartel’s desperate,
last-ditch attemptto hold PM prices down via “OPERATION PM
ANNIHILATION,” as can be seen clearly by the charts below, particularly in
the far more manipulated PAPER silver market.
First, we see
that open interest has fallen to levels last seen during the height of the
Cartel’s violent PAPER attack during GLOBAL MELTDOWN I in late 2008,
and before that mid-2006. In other words, today’s COMEX open
interest, with silver prices hovering around $33/ounce, is the SAME as when
silver prices were $13/oz in 2006 and $8/oz in 2008!
Ditto for COMEX
gold open interest, which per below peaked at 650,000 contracts a year ago,
when gold was below $1,400/oz, compared to just 420,000 contracts today, with
gold at roughly $1,740/oz.
Next up,
let’s look at “Commercial” short positions in PAPER gold
and silver, which I have “quotes” around as they couldn’t
be further from commercial gold and silver users. Plain and simple, the
“Commercial” category is JP Morgan and the other
collusive, U.S. government-funded CRIMINAL BANKS that steal your money each
day.
In COMEX gold,
the Cartel has continually increased its short position through theentire ELEVEN-YEAR
bull market, which is EXACTLY how they have been able to CAP the
market’s persistent, unstoppable rise. However, you can
also see the gold commercial short position peaked more than a year
ago, to be more specific September 2010 at 302,000 contracts, at a time
when gold was just $1,310/ounce. Not that the “commercials”
could ever extricate themselves from such an enormous short position without
driving prices into the stratosphere (don’t worry, they won’t try
because their shorts have explicit U.S. government backing), but today we
have seen the “commercial” short decline to just 193,000
contracts while the price simultaneously rose to $1,740/ounce.
In COMEX
silver, the numbers paint an even more dire position of PHYSICAL tightness,
as not only has the “commercial short position” been steadily
shrinking for six years, but is actually threatening to go
positive in the coming months. As you well know, I believe short-term charts
are WORTHLESS in a rigged market such as the COMEX. However, long-term charts
are extremely valuable due to the MASSIVE support and resistance
levels CREATED by such manipulation, and this chart is SCREAMING that silver
is preparing to launch higher.
Finally, I
created a new way to measure the dying influence of the COMEX, the ratio of
Open Interest to price. This ratio summarizes the earlier data,
demonstrating that rising gold and silver prices no longer are drawing
increased PAPER trading volumes, but to the contrary decreased volume.
In other words, traders and investors alike are shunning COMEX trading
entirely, seeking alternative means of PM investment.
Obviously, the
respective November 2004 and April 2006 launches of the criminal bullion
ETFs, GLD and SLV, started the trend of reduced COMEX futures trading.
However, these six charts demonstrate this trend has clearly ACCELERATED in
the past year, not un-coincidentally since “D-DAY” on November 9,
2010, the day I have pounded the table about all as a MAJOR
INFLECTION POINT in Cartel strategy, when for the first time they exhibited
FEAR and realized they needed to DRAMATICALLY step up manipulation
intensity if they sought to prevent the PM market from melting up.
And step it up
they certainly have, as I have exhaustively PROVEN via a year’s worth
of (more than 160!) RANTS, particularly my manipulation opuses, “COMEX
GOLD MANIPULATION PICTORIALS, VOLUMES I, II, AND III.” Part III
was published last week, with links to Parts I and II within.
Comex Gold Manipulation
Pictorial #3
I have also
demonstrated that the discounts to NAV, or Net Asset Value, have been slowly
increasing over time for GLD and SLV, and given last month’s GLD
dilution threshold change (hidden secretly in their prospectus), you can bet
that its discount to the price of REAL, PHYSICAL gold will increase further
in the coming months and years.
‘D-Day’ near for GLD
Readers, as the
COLLAPSE of the global financial system accelerates, you will seedramatically increased
market volatility, and dramatically intensified attacks (and
rebounds) in precious metals prices, such as this morning’s typical,
unprovoked gold DEATH STAR ATTACK whilst all other markets sat quietly
(foreshadowed by Friday’s blatant attack on the HUI mining stocks, of
course).
However, if you
look at the data, it should become crystal clear that the influence of
PAPER manipulation on gold and silver prices is waning, more so than at any
time in the ELEVEN-YEAR PM bull market. It is only a matter of time
before COMEX trading CEASES to impact prices at all, and all one needs to do
is watch the ratio of PAPER instruments such as COMEX Futures and bullion
ETFs to that of REAL, PHYSICAL gold and silver to see how quickly this trend
unfolds.
And for the
millionth time, DO NOT assume PM mining shares will suddenly
become market darlings. Yes, it is likely they will move higher when
the Cartel is finally broken, but how much higher, and at what
risks? PHYSICAL gold and silver will increase more than 99%
of all investments in the HISTORY OF FINANCIAL MARKETS, with
essentially NONE of the risks, and secondarily may be able to save
your life in an environment where PAPER investments become
worthless.
Furthermore,
take it from someone that has not only owned huge positions
in mining shares for the past decade (until this spring, when I went 100%
physical), but has worked as an advisor to, or officer of, mining companies
for more than five years. Cumulatively, I find mining companies to be
among the worst managed in the world, partly due to their failure to
acknowledge government price manipulation, but also a general lack of
understanding regarding the myriad operational hurdles in front of them.
To wit, in
response to Eric Sprott’s brilliant piece last week, “A Call to
Action,” in which he vehemently encouraged silver miners to withhold
production due to depressed silver prices, the ONLY public answer he received
was this pathetic lip service from Coeur D’Alene, historically the
“worst of the worst” in terms of management savvy, that they
would “consider” such an action in the future, but not until they
first build a “sufficient cash cushion,” as if their current $208
million cash balance is not cushion enough!
Coeur would mull holding
silver over cash, says CEO
PROTECT
YOURSELF, and do it NOW!
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