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It’s very early Friday morning
– OK, where to start?
From my perspective, yesterday was an
important INFLECTION POINT in the political and financial WAR to “save
the status quo.” TPTB are faced with an untenable situation
– a COLLAPSING financial system with no hope of improvement, and
consequently INFIGHTING within their ranks. I have discussed this
political chaos for several weeks now, but never has it been
so apparent as yesterday, amidst the so-called “last ditch” EU
summit.
Make no mistake, the European union is beyond the
desperation phase, its “leaders”grasping for straws
and gasping for air as they realize all options are
exhausted. The GLOBAL PPT is working 24/7 to prop markets while the
final, fatal decisions are made, and who knows how much time they can buy?
The fact remains that entering this
meeting, as well as yesterday’s simultaneous ECB meeting, the only
thing holding the system together was the MASSIVE Federal Reserve MONEY
PRINTING operation announced last week, in concert with behind-the-scenes, force
fed loans to numerous, INSOLVENT banks such as Credit
Agricole, and of course, aggressive action by the PPT, hell bent on assuaging
the few remaining “investors” that “all’s
well.”
Yesterday’s Dow tape had
manipulation written all over it, and I haven’t even gotten to GOLD
yet, which I assure you I will in great detail later
on. As discussed yesterday, the ECB made the expected 25 basis point
interest rate cut, from essentially nothing to “less than essentially
nothing,” which had the markets fired up until “Goldman
Mario” Draghi compared European liquidity to that of Lehman Brothers
prior to its collapse, yet refused to OVERTLY agree to across-the-board
“bazooka” purchases of ECB sovereign bonds.
While European stock markets collapsed
2%-3%, the PPT worked overtime to keep the Dow down less than 1% all morning,
challenging each and every attempt to fall in line with the rest of the
world, as always. Throughout the day, myriad, dissociated snippets
emerged from Europe, highlighting the aforementioned chaos among the
summit’s participants, as well as an alarming lack of direction.
First, we got the results of the
comical “nth round” of European bank stress tests, which have all
the credibility of a Bernie Madoff operated hedge fund. Per the table
below of the last round of stress tests, the best
performing European bank was none other than DEXIA, which weeks
later went bankrupt!
Latest Irrelevant European Stress Test Results Leaked
Immediately after release of the
farcical results, which frankly I haven’t paid a second of attention
to, none other than the German Bundesbank stated that “Europe has lost
credibility.” Very encouraging, considering a “resolution”
of Europe’s problems was so desperately hoped for in the ensuing hours.
Europe Says Europe Has “Lost Credibility”
Much of the meeting was dedicated to
creating a MEANINGLESS “treaty” uniting European austerity
requirements, as if agreeing to tighter fiscal discipline
will suddenly make it happen. When nations are drowning in debt, with
soaring unemployment and rising inflation, the LAST thing they need are
austerity measures, which only slow the economy further and foment social
unrest. Not good for elections, or physical survival for that
matter. We’ve already seen the impact of such draconian measures
on Greece, the “red-headed stepchild,” which is on the verge of
anarchy as its residents protest government ineptitude, beg for further
socialistic benefits, and pull their money out of the banking system.
I’m sure you can take a guess what will happen elsewhere.
The
“Treaty” Negotiations
In fact, Europe has already blown to
bits the “austerity requirements” of the 1992 Maastricht Treaty,
which established the initial financial criterion of Euro Zone member
nations. If this treaty were adhered to per provisions of the
Maastricht “convergence criteria,” MORE THAN HALF of the 17
member nations would bekicked out of the Euro, including all the
PIFIGS!
Maastricht Treaty
– Wikipedia
But then again, it’s just a treaty,
and promises are meant to be broken. Just take the U.S. CONSTITUTION,
for instance, of which the fourth amendment protects Americans against
“unreasonable search and seizure,” a freedom we are about to lose
with nary a fight.
Fourth Amendment to the United States Constitution – Wikipedia
In fact, per this hard-hitting piece
from the only reliable news source I look to, the Jon Stewart comedy show,
the Indefinite Military Detentions provision of this
year’s military appropriations bill passed the Senate by a vote of
93-7, with just ONE HOUR of debate. The following comment has NOTHING
to do with his party affiliation, but John McCain is a traitor to this
nation, and it sickens me to see how close he came to
becoming President!
Jon Stewart Hits Obama Over Indefinite Military Detentions
As the ECB meeting and EU summit raged
on, global stocks were roiled by a series of idiotic rumors, obviously
planted by TPTB to keep markets at bay, as we have seen continuously for the
past week or so (you don’t see any negative rumors, do
you?). Massive ECB debt purchases, IMF loans, a renewed EFSF/ESM,
“one world” government – you name it, and a rumor was
created to temporarily prop up markets.
Snapshot Of Pure
Lunacy
In fact, if not for immediate refutation
of this strategically planted rumor in the last hour of trading, the
PPT’s daily “HAIL MARY” rally might have succeeded in
turning the Dow UP for the session, despite the ENTIRE WORLD falling
sharply! Despite their best efforts, the Dow closed at 11,998, just
below the KEY ROUND NUMBER of 12,000 that they so vehemently have been
defending.
 
But don’t worry, as
always Dow futures are up this morning, as the PPT cannotallow
PERCEPTION that something is wrong, despite all evidence stating
otherwise. Not to mention, gold being walked down into the COMEX open, as
always. Look hard at this chart of the Dow, how the PPT defended
the KEY ROUND NUMBER 12,000 all summer long, then 11,000 during the Fall when
the debt ceiling debacle/U.S. credit rating reduction knocked the market
down, and now 12,000 again following last week’s Federal Reserve-led
GLOBAL QE announcement.
Behind the scenes, a growing number of
European nations are preparing for theinevitable collapse of the
Euro, and with it accelerating, and in some cases hyperinflation.
Several nations are already looking into acquiring new printing
presses, so they can create their very own hyperinflations. And you
wonder why Europeans are withdrawing capital from the banking system at a
record pace, while European banks themselves are moving
their funds to the relative safety of the ECB itself.
Banks Prep for Life After Euro
And the final verdict on the
“life or death” EU summit is…a NEW TREATY amongst 23 of
Europe’s 27 nations, including several not even in the Euro currency
(huh?). The treaty promotes the aforementioned “austerity,”
a WORTHLESS gesture among nations that have not only flouted all other
treaties regarding fiscal constraint, but are amidst massive recessions,
bordering on depressions, and thus without the means to
carry out such draconian measures even if they had the political will!
New treaty to save euro splits European Union
“One world” truly appears
to be the order of the day, as this “elite” group of scum in
Brussels attempts to commandeer the sovereignty of all of
Europe. As in the United States, the European political and economic
leaders (i.e. the bankers) created a fiat currency system leading its members
to over leverage themselves, and now they aim to steal those
nations’ assets, and cultures, as punishment.
Ironically, the most indebted nation on earth (497% cumulative debt/GDP),
England, wouldn’t agree to the new treaty, but don’t worry it,
too, will fall in line when its debt smothers it into oblivion.
And Scene: Europe Agrees To Disagree, Next Summit Date Set For March
2012 As David Cameron Kills Compromise
And what’s this? In late
breaking news, yet another PATHETIC rumor that China will bail out
Europe, not un-coincidentally emerging just after STOCK FUTURES started to
decline. This is getting comical already; my god, what has happened to
this previously civilized world?
Clutching At Desperation Straws – China To Bail Out Europe…
Again
In other world news, China continues to
experience an alarming decline in its structurally deficient
economy. They may have all the world’s manufacturing capacity,
but while the rest of the world is mired in deep recession, demand for
even cheap Chinese products is falling sharply. With nearly two
billion mouths to feed, the Chinese government has been reinvesting
its surplus cash into construction projects for the past decade, and
consequently has MASSIVELY OVERBUILT, creating a commercial real estate
bubble that threatens to dramatically weaken the Chinese banking system.
One Alarming Indicator From China
I assure you, Confucius would
have warned the Chinese government that pegging the yuan to the dollar via
UNLIMITED MONEY PRINTING would be a bad idea, per his famous saw, “he
who will not economize, will have to agonize.”
The Global Crisis Reaches China: Unrest Spreads as Growth Stalls
Speaking of government profligacy, how
about this beauty of an article about the U.S. municipal bond market being
$800 BILLION, or 28%, larger than ‘initially estimated’ just five
months ago! Oh well, I guess all those states, counties, villages,
towns, and hamlets will just have to RAISE TAXES and CUT SPENDING, unless, of
course, the Fed just PRINTS MORE MONEY and gives it to them!
U.S. Municipal-Bond Market 28% Larger Than Estimated, Fed Says
Ah, the Fed, the inflation gift
that keeps on giving. First we had the $700 billion TARP
“loans,” which actually turned out to be $16 trillion after
Congress finally penetrated its sheath of opaqueness to uncover the cash
showered on banks and corporations around the globe, including the Bank of
Libya, General Electric, and Toyota (and don’t forget $8 TRILLION to
the ECB). But now, like Moore’s Law in the
microchip industry, which states that microchip processing capacity doubles
every two years, we have an estimate that the total money PRINTED and
DISTRIBUTED by the Fed since GLOBAL ECONOMIC CRISIS I commenced is $29.6
TRILLION!
Do I hear $50 TRILLION?
Bailout Total: $29.616 Trillion Dollars
“Higher than previously estimated
” past money printing is just one of a host of
anticipated horrors from Washington, as it rapidly approaches the December 23rddeadline
for raising the debt ceiling by another $1.2 TRILLION. Not to mention
the DEADLOCK we can expect as Democrats and Republicans play political
reindeer games in the run up to November’s presidential
elections. I couldn’t think of a better time for massive
political infighting, can you?
D.C. Gridlock Could Hurt Economy in Early 2012
And speaking of how pervasive
corruption has become in the American political system, check out this beauty
of an article, almost too surreal to be believable (I think I’ll have
to call Ripley’s about getting this one onto their
show). Amidst yesterday’s travesty of a Congressional hearing on
MF Global, RepresentativeFrank Lucas “made it clear
how disgusted he would be if it was found that Jon Corzine is guilty of
stealing client funds.”
Defending one of the most vile white
collar criminals in U.S. history during a nationally televised hearing
– that sounds insane, right? Not to mention when said
Representative Lucas is also HEAD of the House Agricultural Committee,
charged with creating legislation to protect FARMERS, who happen to be the
group MOST negatively impacted by the MF Global grand theft.
Ah, but what’s this? Per
the incredible table below, said Representative Lucas, an elected steward of
the American people, and leader of the Agricultural business sector to boot,
is bought and paid for by THE AMERICAN BANKING
ASSOCIATION!
Presenting All That Is Wrong With America: Here Is The Top Contributor
To The House Agriculture Committee Chairman
Yes, the “bankstaz” own ALL
of Washington, not just the Presidents…
George W. Bush Top Contributors – OpenSecrets.org
Barack Obama Top Contributors – OpenSecrets.org
…an if you make ANY assumptions
otherwise, you will be in for a big surprise in 2012.
And now for today’s RANT topic,
one close to my heart – GOLD. Yesterday may have been a major
INFLECTION point in the European banking crisis, but it was far more than
that in the gold market – an HISTORICAL DAY!
A day of victory for GATA, for RANTING
ANDY, and for all of us that have vehemently argued that Western central
banks, led by the Federal Reserve, manipulate the gold market to prevent it
from being seen as the safe haven asset it has
always been, and will always be.
A day, amidst sheer DESPERATION, when
the Cartel committed its FINAL ACT OF FINANCIAL HUBRIS by showing its
hand by admitting it manipulates the gold market!
MNI Reports Coordinated Central Bank Intervention Sends Gold Lower
Intraday
We may never know EXACTLY how they
executed yesterday’s DEATH STAR attack at EXACTLY the 8:20 AM COMEX
opening yesterday, but given the remarkable similarity to dozens of other
PAPER gold attacks, particularly since “OPERATION PM
ANNIHILATION” commenced minutes after the Labor Day
weekend, you can bet what they announced today is simply an acknowledgementof
what they have been doing all along.
Just yesterday, I posted
charts of the past week’s trading, in which “someone” was
violently protecting the KEY ROUND NUMBER $1,750, and yesterday was a perfect
example of this tactic. Gold was solid all night, and took off when the
ECB cut interest rates, comparing the current European situation to the final
days of Lehman Brothers. However, just MINUTES after breaching $1,750, yet
again gold violently sold off in its typical, counterintuitive
manner relative to the news at hand.
The news report states explicitly the
“BIS, BOE & FEDERAL RESERVE WERE SELLING GOLD AFTER IT POPPED TO
SESSION HIGHS,” i.e. when gold dared to breach $1,750. Thus,
CLEARLY I was right about the defense of this key round number, just as
I’m positive “they” were defending $1,800
last month and $1,900 in late August. For the record, the BIS is the
Bank of International Settlements, the so-called “Central Bank’s
central bank,” and the BOE is the Bank of England. More on that in a bit, don’t you
worry.
I have supported GATA, the Gold
Anti-Trust Action Committee, since 2003. Bill Murphy and Chris Powell
are close friends, two of the most steadfast believers in their cause of
anyone I know. The “GATA Army” has been the inspiration of
my life’s work, and over time I have become one of its generals.
Casting my lot with GATA was the smartest move of my career, as I met
some of the brightest stars in the investment world and, more importantly,
have been empowered with the WILL to keep battling through attack after attack after attack,
due to my KNOWLEDGE that such attacks are nothing more than illegal, PAPER
ruses seeking to discourage me from investing in TPTB’s “Achilles
Heel,” PHYSICAL GOLD and SILVER.
Over the 9½ years I have been
FULLY INVESTED in Precious Metals, I have experienced every manner of anger,
frustration, humiliation, anxiety, and misery, as seemingly each day the
Cartel has stepped up the intensity of its attacks, ironically as prices
continue to inexorably rise. The primary reason for these
emotions, and countless financial losses, was the level of manipulation inmining
shares, both large and small cap. The bulk of my investments were
in junior mining companies, in which I generated the greatest financial gains
of my life from 2005-07, and subsequently the greatest losses in
2007-08. Thankfully, I was wise enough to put my eggs in two key
baskets at the BOTTOM in late 2008 – PHYSICAL metal and Silver Wheaton.
From 2008-09, I rode the
“reflation trade” beautifully, with bullion doubling and SLW
rising more than tenfold, but then that brief period of universal
appreciation ended. Starting in late 2010, the illusion of
success from a combination of government bailouts, nationalizations,
accounting changes, and fiscal stimulus started to wear off; i.e., the
beginnings of GLOBAL MELTDOWN II. Gold and silver shocked the Cartel by
taking off late in the year, necessitating a draconian increase in
manipulative tactics, which I believe started on “D-DAY,”
November 9, 2010.
At that point, GOVERNMENT ALGORITHMS
were injected into the large cap stocks, making equities like SLW pure
torture to own. Despite surging metals prices, producing miners have
experienced contracting P/E multiples thanks to these
algorithms, which in turn yielded a negative trickle-down effect to the
higher beta juniors. Junior miners have, for the most part, fallen back
to levels last seen at the bottom of GLOBAL MELTDOWN I, and
believe me I know, having worked for nearly five years as an Investor
Relations officer or consultant to junior mining companies.
As proof, look no further than the
TSX-Venture Index, a/k/a the Vancouver Exchange, home of hundreds, if not
thousands of junior miners. It is down 33% in 2011 (including 46% at
its October low), and 54% from its April 2007 high, with a long-term chart
that doesn’t inspire encouragement. I have read numerous articles
in recent weeks about how “undervalued” this group is, but then again
so are the senior producers, which generate revenues and earnings, with
balance sheets capable of withstanding another major decline, if one should
be in the cards.
“Undervalued” is a siren
song in stock investing, one that has lured me to financial pain as often as
bliss, but in recent years far more often the former. It is an
ambiguous term utilizing obsolete valuation techniques from the days when
stock markets were freely traded, and one that can put
investors’ finances in precarious positions amidst the most difficult
economic environment of our lifetimes. In other words, not worth the
risk. Believe me, I know – I am a 20-year stock market analyst,
who majored in finance, earned his CFA 13 years ago, worked three years as a
buy-side analyst, seven as a sell-side analyst, and five as an investor
relations officer to public companies, as well as a ten-year investor in
mining equities!
Sorry to digress, but when I think of
the impact the gold Cartel has had on my life, both positive and negative, it
is hard not to get emotional…and angry…and PROTECTIVE of readers,
for whom I wish to generate the highest possible returns at
the lowest possible risk.
Despite reams of evidence to the
contrary, some of which I’ll share with you today, central bankers and
their minions have ALWAYS denied official intervention in the gold markets,
and NEVER been transparent about the nature, or accounting of, their gold
transactions. For purposes of this RANT, I will only be speaking of
gold, as central banks have ZERO reserves of silver, and thus their ONLY
means of manipulation is via naked shorting of PAPER
products such as COMEX futures and SLV shares.
Below is one such
“admission,” in 2009 by a Federal Reserve lawyer grilled by one
of the few recent bright spots in Congress, Alan Grayson of Florida, who of
course lost his re-election bid shortly afterwards. He states the
Federal Reserve possessesall the gold reported on its balance sheet,
just as U.S. lawyers, bankers, and politicians have done for the past decade.
Have The Federal Reserve Or Prime Brokers Ever Tried To Manipulate The
Market?
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