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Dang!
I was hoping to have a
“quietish” morning free of the usual dose of “horrible
headlines,” but the early trickle as usual turned to a rapid outpouring
in the last few hours. For PM investors angered and disgusted at this
week’s pre-options expiration action, have no fear, as options
expiration is TODAY.
In Thursday’s RANT, “TOP-CALLING FALLACIES,” I presented data stating that
contrary to prior years, options expiration has NOT been a major event in the
Precious Metals markets during 2011. Irrespective, I noted that with
the European crisis threatening to implode the GLOBAL economic system,
“all bets are off” related to historical market manipulation
strategies. The Cartel moved to a higher plateau of intensity a year
ago, on “D-Day” (the first day they showed FEAR of an imminent PM
MELT-UP), and the PPT similarly upped its game THE DAY AFTER LABOR DAY this
year, when it DESPERATELY sought to reverse the well-deserved market carnage
from August.
It has been painful dealing with not
just September’s PM DEATH STAR attacks, but this month’s renewed
suppressions, particularly given the MASSIVELY gold-positive nature of
worldwide news flow. However, the fact remains that the CARTEL/PPT are
LOSING! Gold was $1,620 in early August, compared to $1,690 today,
while nearly ALL Western BANK stocks are at or near new lows. Yes, the
Dow is roughly flat, but the companies that MATTER most to the PPT are
floundering badly, such as Bank of America, America’s largest
bank, soon-to-be non-marginable (when it falls below $5/share), and
subsequently, bailed out or bankrupted despite the piddling investment of
scum-of-the-earth Warren Buffett.
Anyhow, PMs were walloped this past
week, and whether the reason was options expiration or pure suppression in
the face of the imploding European financial situation matters not. If
you own PHYSICAL gold and silver, this past week’s
shenanigans are meaningless, as your metal isn’t going
anywhere, and likely never will. If you have been considering ownership,
good golly you’ve been given an opportunity to buy at lower levels and,
more importantly, at a time when supply is available and delivery times
short. As I RANTED about several weeks ago, PM buyers move like a herd
of cattle, and once they decide it’s time to buy PHYSICAL gold and
silver, premiums and delivery wait times can
spike up VERY rapidly. I cannot emphasize enough how important it is to
POUNCE on opportunities like this, as the LAST thing you want to deal with is
buying in an evaporating market.
Gold Falls Again on Options Expiry -Supported by Global Debt Crisis
& Iranian Oil Jitters
To wit, the investment world is still
in the phase where it is willing to believe, andWANTS to
believe, gold is in a bubble. They WANT to believe
“all’s well,” that the past three years, and particularly
the past three months, was just a bad dream, which can and will end
momentarily. They refuse to realize gold and silver
are DESTROYING all other asset classes this year DESPITE massive Cartel
attacks in January, March, May, September, and now November, or that PMs have
risen for eleven straight years. Such universal bearishness in
the face of raging fundamentals and long-term technicals, and stellar DECADE-LONG
performance, should hint just how powerful the bull will become once the 99%
of the population that DO NOT own gold and silver decide they MUST, at ANY
COST!
So WAIT, gold is NOT outperforming stocks 23% YTD?
Who knows what will wake them up?
I don’t know, but the list of potential “black swans” is as
long as my “horrible headlines,” and getting longer by the
day. Perhaps an Italian debt default, another MF Global fiasco, or
perhaps….a major offering by the Sprott Physical Silver Trust, which
quietly filed a $1.5 BILLION shelf offering last week.
Sprott PHYSICAL SILVER Trust files SHELF
A year ago, PSLV completed its $575
million IPO at $10/share, and once this prospectus is approved, the
fund’s management (Eric Sprott) will have the option to sell receipts
backed by up to $1.5 BILLION worth of PHYSICAL silver to investors,overnight.
As you can see, last year’s PSLV IPO, which occurred concurrently with
an offering from sister PM closed-end fund Central Fund of Canada (CEF),
presaged the silver price surge that caused the Cartel to
resort to its “D-Day” tactics on November 9, 2010.
Alternatively, how about an unprecedented surge in
Indian gold buying, given that we are amidst the seasonally strongest buying
period and the price of gold, in RUPEES, recently touched an ALL-TIME
HIGH. As noted in numerous RANTS in recent months, U.S. investors need
to cease being so secular in their view of the world. America is NOT
the only country on earth, and the dollar NOT the only currency. It may
be the “world’s reserve currency” (for now), but the
majority of the world uses other forms of money (all fiat, of course), and at
the moment the Indian Rupee is in freefall, down 18% in the past six months
alone. The cumulative effect of MASSIVE, GLOBAL money printing and
“quantitative easing” has wreaked HAVOC on foreign exchange
rates, with many second-tier currencies, such as the rupee, the Mexican peso,
the Brazilian real, and the South Korean won, experiencing massive declines
versus the dollar, and thus surging local inflation rates.
Indian Rupee Falls to All-Time Low Against U.S. Dollar
Or, how about a resurgence of
“Arab spring,” given that EGYPT MELTDOWN II appears to have
commenced…
EGYPT’S cabinet RESIGNS amid WIDENING PROTESTS
…or, a catastrophic
“event” in Iran, where essentially all of America’s puppet
governments appear to be inciting that nation’s volatile,
America-hating President, Mahmoud Ahmadinejad.
Sarkozy Reminds Market Of Geopolitics, Says Iran Nuclear Program
“Serious And Urgent Threat”
OK, let me quickly get through
today’s European horror stories so I can get to the subject of
today’s RANT, the good ol’ US of A. Not that these
headlines are any less horrible if I discuss them briefly, but some days I
just need a break! Let’s face it, the PIFIGS are
goners, as is the entire Euro Zone and Euro currency, it’s only a
matter of when. And frankly, I don’t believe it will survive
through 2012, if you want the honest RANTING ANDY opinion.
Essentially, the article below explains
all. NOTHING has been fixed, and EVERYTHING exponentially worsens each
week, and will continue to do so until the END GAME commences. The
European populace and “leaders” alike are silently praying something
positive will happen; but like a “watch pot,” nothing is boiling.
Of course, in this case, the watch pot doesn’t even have a flame under
it.
Waiting to Exhale
– Desperate PLEAS for ECB to DO SOMETHING
Across Europe, interest and CDS rates
are soaring to new highs, while bank stocks conversely plummet to new
lows. The debt contagion is growing more virulent,
yielding runs on the largest banks, such as Commerzbank, the second largest
bank in Germany…
Commerzbank Monkeyhammered On INSOLVENCY Concerns
…the largest insurance
companies…
Scramble From European Insurers ACCELERATES
…and the largest sovereign
nations…
Spain Election And Benchmark Switch DUDS, As Country Pays Record Yield
In Bill Auction
Spanish Yield Curve INVERTS most since 1994
Speaking of Spain, I learned a
STARTLING fact today about the land of tapas and bullfights. Thanks to
its gargantuan housing mania and crash, Spain is now MORE INDEBTED than
Italy, which itself is the world’s third most indebted nation, trailing
only the U.S. and Japan. Yes, Spainophiles, if you add together all debts
(government, corporate, financial institution, and household), Spain has MUCH
MORE debt than Italy!
And given that Europe is tied at the
hip, with Italian GDP plummeting into the nether regions, you can bet that
EVERYTHING we have experienced in the past month with Italy is about to be
repeated in Spain.
To finish the thought, let’s see
which European nations are most exposed to the coming Spanish debt
implosion. And whattya now, it’s those two stalwarts of fiscal
“conservativism,” FRANCE and GERMANY. Just wait and see
readers; the German people will be shrieking in fear at ANY mention of
further German involvement in the Euro Zone, and my bet is a German
exit from the Euro is as likely to happen in 2012 as a Greek
expulsion.
Euro zone – bank exposure by country
Now that the European dirty laundry is
cleaned up, and PAPER gold successfully capped YET AGAIN at the ROUND NUMBER
$1,700 just hours before options expiration, not to mention at EXACTLY the PM
FIX at 10:00 AM EST, as usual, let’s move on to the topic of this RANT.
I titled it “BACK IN THE
USSA” as a satire on the classic Beatles song, but also the
not-so-subtle reference that America, which for decades proclaimed its hatred
of “the Red Menace,” has in just a decade morphed from the world’s
most open, capitalistic economy to one combining the worst aspects of
socialism, fascism, and yes, the dreaded “C-word,” COMMUNISM.
There is no need to rehash the TOMES of
data from prior RANTS regarding how low the American political system has
sunk in its quest to “save us from ourselves,” or better put,
take everything from us in the name of “national security.”
Famous last words from numerous murdering, totalitarian regimes throughout
history, by the way. However, I want to put the U.S. back into the
spotlight today, as it deserves given that it has the MOST DEBT IN GLOBAL
HISTORY, growing at the rate of $1 TRILLION per quarter and getting set to accelerate
upward in 2012.
Europe is currently hogging the
headlines, and may do so for some time given that the Euro Zone could break
up any day now, but that doesn’t make it’s situation any worse
than the granddaddy of global irresponsibility and profligacy,
America. As far as I’m concerned, the only things separating
Europe from the U.S. are the facts that 1) Europe does not have
the global reserve currency (and thus cannot print its way out of debt), and
2) it is comprised of 27 disparate governments with their own languages,
economies, and even bonds. Yes, I have written countless times about
how the U.S. is far less homogenous than most people think (I expect numerous
States to secede in the coming years), but the level of heterogeneity is far
greater in Europe, where each nation in the Euro Zone is SOVEREIGN, as
opposed to the U.S. states, which are all SUBORDINATE to the Federal
government.
Nevertheless, American SOVEREIGNTY,
too, will be challenged in the coming years when the world finally accepts
the REALITY it cannot pay off its debts. This acceptance will be the
most difficult of all to accept, given that nearly all countries hold DOLLARS
as their reserve assets, and thus keep a blind eye to U.S.
problems whenever possible, just as they consciously, and unconsciously,
ignore what gold is telling them.
In my view, 2011 America is the
GREATEST FINANCIAL CATASTROPHE IN HUMAN HISTORY, soon to be unleashed on the
world in DEATH STAR fashion. The “Super Committee” fiasco
is icing on the cake, a key inflection point reflecting the exact date when
the world starts to recognize the U.S. is bankrupt. Not only did
American politicians destroy the nation with heinous fiscal, monetary, and
trade policies, but they didn’t even attempt to
cooperate in the eleventh hour, where even a semblance of
bipartisanship might buy a bit more time.
Super Committee Says It’s Unable to Agree on Debt Reduction Deal
Even better, I’m about to reveal
yet another BAZOOKA that will blow away even the most Pollyana-ish government
apologists. I just looked into the details of the supposed
“automatic cuts” scheduled to kick in due to failure of the Super
Committee…you know, the cuts that don’t even commence until 2013,
AFTER the next presidential election.
And look at this, 18 percent
of the automatic savings are assumed to come from interest costs the
government would save from reducing the debt! In
other words, if the Super Committee fails completely, out of the $1.2
trillion in automatic savings, $216 billion would be assumed interest
savings!
HUH? With interest rates at
record lows, and thus having only one way to rise – UP, particularly following
failure to even put a dent in the nation’s EXPLODING
debt and deficits, the government is ASSUMING INTEREST RATE SAVINGS in the
coming years? AAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHH, PUT ON THE
STRAIGHT JACKET, RANTING ANDY HAS OFFICIALLY SNAPPED.
Moreover, such “interest
savings” are predicated on an improving economy, which in turn would
generate additional tax revenues to pay down debt. So much for
that, as 3Q GDP was just dramatically revised downward, AS I SAID IT WOULD BE.
Amazing how the “Wall Street Economists” were assuming 2.5%, but
I said it would be 2.0% or lower with absolutely no statistical models to
work with, just plain old common sense. Of course, if the REAL
inflation rate were utilized in the GDP calculation, U.S. output would look a
lot like the Italian chart above. But why quibble about 4%-5% of GDP
here and there?
Revised Q3 GDP Drops By 20% To 2.0%
And true to form, S&P didn’t
downgrade the U.S. after yesterday’s Super Committee failure
announcement, even though the announcement fit EXACTLY the criteria they
wrote of in August determining why they would downgrade again. Of course,
S&P was practically tarred and feathered following the August downgrade
by the U.S. government, which had the gall to tell S&P their math was
wrong, before forcing its CEO to resign with a figurative gun to his
head. Moody’s and Fitch, frozen in fear at the thought of being
tortured or killed themselves, conveniently left their ratings at AAA, and
have been curiously quiet this week. They are the first to SCREAM how
Italy and Greece must be downgraded, but facing the “leaders” of
the Nazi States of America, they suddenly become blind, deaf, and dumb
(emphasis on dumb).
S&P says NO CUT PLANNED in US credit rating
And don’t expect the PAIN to let
up any time soon in “the world’s greatest superpower,”
which will shortly be front and center with its financial implosion, which by
the way is tied by the hip to Europe as well (can you say Morgan
Stanley?). It shouldn’t be long before Helicopter Ben comes up
with some newGreenspan-speak to explain why he is doing QE3,
while vehemently claiming it is not really MONEY-PRINTING – count
on it, and count on it SOON!
Not only do major U.S. banks face
myriad death knells from the collapsing real estate market, imploding
economy, and massive exposure to European debt, but they OWE TENS OF BILLIONS
in TARP-like bailout repayments, NOW! And look who owes $7.5 billion
THIS MONTH, JP MORGAN.
$52.5 BILLION of virtually free U.S. bank DEBT DUE NEXT MONTH
Before I conclude, I need to point out
YET AGAIN why EVERYONE that attempts to invest in the stock market will be
DESTROYED, whether they are long, short, straddled, “hedged,” or
otherwise. I cannot SCREAM this loud enough – the STOCK MARKET is
DEAD, with the GOVERNMENT and HFT ALGORITHM PROGRAMS accounting for nearly
all the volume, with just two goals – to STEAL YOUR MONEY with every
illegal trick possible, and influence PERCEPTION by keeping the 30 bleeping
Dow stocks from imploding.
Unfortunately, individuals do not have
a personal PPT team, but instead an AAPIT, or ASSURED ACCOUNT PLUNGE TEAM,
which I will lovably call ARMPIT.
Margin Debt SOARS, most since June 2007, just in time for NOVEMBER ROUT
Readers, you are running out of
time to PROTECT YOURSELF, as once the U.S. economy and financial
system is back in the media crosshairs, CHAOS will rapidly ensue.
Buying PHYSICAL gold and silver will become much more difficult once the
$2,000/oz and $50/oz are breached for good, and NOTHING will compare to the
frenzy to buy PHYSICAL metal during a FEAR-based buying frenzy. And I meanNOTHING!
Moreover, store shelves could quickly
empty during times of extreme crisis, and given the irreparable damage to the
futures markets done by government manipulation, unfathomable Wall Street
leverage, and the loss of CONFIDENCE resulting from the MF Global fraud,
don’t be surprised if such events unfold far more rapidly than most can
imagine.
PROTECT YOURSELF, and do it NOW!
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