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We all knew the world was ending...
... and then the Fed and
the PPT stepped in and made it all okay again.
Bear Stearns, an 80-year investment banking veteran
who saw the crash of 1929 and the Great Depression come and go, who weathered
the stormy seas of stagflation during the 1970s and the brutal recession
under Volcker and Reagan, disintegrates before our
eyes, right into the open pockets of JP Morgan Chase - courtesy of the
Federal Reserve (which JPM co-owns).
Rapid-fire, successively growing Fed bailouts and phony liquidity injections that resulted in the Fed
either loaning out cash (as in its TAF action, which increases the money
supply) or US
treasuries (as in the TSLF, which don't) made the Fed encumber a full
one-third of its total balance sheet. All of this was capped by a
dead-of-the-night, surprise decision to combine the Bear-JPM deal with an
emergency cut of the discount rate, only two days before an unprecedented 75
basis point funds rate cut (which many decried as "too little, too
late").
The PPT, a/k/a the "President's Working Group
on Financial Markets" brought the Dow-Zombie back from the dead yet once
more, and then several more times that same day during "The Monday After".
On Tuesday, the PPT proceeds to quickly intervene when the whopping the Fed
rate cut announcement, all by itself, doesn't produce the desired result and
gold rises, cutting prior losses, while the Dow gives up its earlier gains. All
of this is suddenly turning around for no apparent reason, within minutes,
resulting in a uhuge, near
400 point, gain on the Dow.
Why are investors so scared?
The are
afraid because they keep bumping into things they cannot see while enjoying
what they believe is a walk in a lush beautiful, bountiful garden.
Investors see this:
While, in reality, the world in which they
somnambulate, looks very much like this:
In the PPT's whacky world
of virtual reality, all of the informational queues that normally allow
investors to make informed decisions are removed - to prevent a widespread
panic. It's only for their own good, of course.
You see, father state - and those
who finance it - are very concerned about your emotional well-being. You
cannot be allowed to see your economic reality as it is, because that might
make you not like it and, God forbid, might make you even want to do
something about it - like, oh, maybe turn around and walk the other way?
That is not permissible. It is unacceptable because
the rocky path along the abyss is all father state is able and willing to
give you. Turning around and walking right out of the narrowing canyon would
e the prudent thing to do - but it's not the direction that is predestined
for you.
In order to keep you on your doomed path, the
signpost of rising gold prices must be repeatedly chopped down to make you
think the path is alright for you.
So, you keep walking, trusting the beautiful vision
of rhododendron (or whatever it is that shades your brow from the sun's harsh
light of day) in this make-believe garden, blissfully ambling along.
As you walk, you are constantly bumping up against
the jagged rocks protruding from the towering canyon wall to your left; it is
the cold, hard reality of rapidly rising gold prices that impedes your walk
down this treacherous path - but you chalk it all up to
"fluctuations" and continue, un-alarmed, unconcerned.
"You see?" you mumble to yourself,
"Gold fell on Monday from its hysterical $1,033 price peak reached in
Asia overnight, right back to $1,000, where it was before. On Tuesday, it
fell quite a lot, all the way to $977, and the Dow rocketed up by 400 points,
and today, gold is down another $30! These times can't be as dangerous as
some people always claim."
"Of course, my trusting friend,"
replies the PPT, "Certainly. You are so right! Thank you for selling
your gold at the bottom of this engineered downturn. Just keep on walking,
just a little further up this lush garden path - all the way around that bend
where the butcher's trough is waiting."
To you, the trough will seem like a quaint wooden
bench, nestled under shady trees, basking in the late afternoon sun. Have a
seat, my dear friend. Take a rest. Smell the roses. Gold is at an all-time
peak and will soon decline. All is as it should be. Soon, very soon, all your
sorrows, all your travails, will be no more...."
Farewell, ... my
good friend ...!
Got gold?
By : Alex Wallenwein
Editor,
Publisher
The EURO vs
DOLLAR GOLD-MONITOR
Just like driving your car, investing
only makes sense if you can see where you are going. The Euro vs Dollar
Monitor is your golden windshield wiper that removes the media's crud
of financial misinformation from your investment outlook. Don't drive your
investment vehicle without it!
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