It’s Tuesday afternoon, and just as I started
to write my market wrap-up, the following, IMPORTANT headline hit the
tape. Sprott has finally pulled the triggered
on a new PHYSICAL silver offering, of up to $250 million, and my bet is all,
or nearly all, this amount will be filled. For the record, PSLV’s
premium to Net Asset Value closed at just under 24%, so we’ll see what
kind of discount will be required to fill that level of demand (FINAL DETAILS
OF THE OFFERING LATER IN THIS RANT!).
Sprott Physical Silver Trust Announces Follow-on Offering
of Trust Units
The retail bullion market has slowed over the past
month due to the PPT/Cartel-inspired market lethargy I have discussed in
recent weeks, but institutional demand is very strong, as $250+ million of silver is a lot of metal to sell
overnight. Clearly the PHYSICAL market has tightened considerably
following December’s “OPERATION PM ANNIHILATION II” attack,
which will only serve to suck more metal out of the market and improve the
already ultra-bullish fundamentals.
London Trader –
Staggering Gold Demand Creating Shortages
KWN – Silver Eagle Sales
Are Exploding, “Demand is Shocking”
– Silver Shortages & Gold to Accelerate Higher
As for Tuesday’s action, it’s more of
the same. I’ve been the pre-eminent “Cartel
Watcher” for the past decade, and I’ve NEVER seen anything like
this. Not just the steady Cartel poundings but the inverse as well, a
complete and utter lockdown of the Dow and Treasury markets, which for
all intents and purposes are no longer allowed to decline. To think I
made a big deal about heightened suppression tactics following
“D-DAY” 14 months ago, mere child’s play compared to the
all-out PAPER attacks starting hours after the Labor Day weekend with
the commencement of “OPERATION PM ANNIHILATION I.”
I ended yesterday’s RANT by observing we were
already 3-for-3 for the day, awaiting 12:00 PM EST to see if we’d go a
perfect 4-for-4 in the gold attack department. And the Cartel didn’t
disappoint, saving their best for last. In the “good old
days,” gold was NEVER attacked at ALL FOUR key Cartel times –
3:00 AM EST, 8:20 AM EST, 10:00 AM EST, and 12:00 PM EST – until last
Fall, and since then this strategy has been employed countless times.
Look at the WATERFALL decline when gold attempted to
go parabolic (above the daily 2% cap) at EXACTLY 3:00 AM EST, the
trend-breaking opening plunge at EXACTLY the COMEX open at 8:20 AM EST, the
muted, but blatant $4 plunge at EXACTLY the PM Fix at 10:00 AM EST, and the coup
de grace, a nonsensical WATERFALL DECLINE at EXACTLY the “cap of
last resort” at 12:00 PM EST, another beauty of a trend-breaker.
Meanwhile, silver was under similar pressure all
day, and given its smaller market size such WATERFALL DECLINES are always
more pronounced, as you can see on this chart. Clearly, $30.50/oz was being defended to the death, and ultimately the
KEY ROUND NUMBER of $30.00/oz that has been
viciously suppressed for more than a week now. Of course, copper, crude
oil, and a slew of other commodities – even platinum –
rose comfortably more than 2% with as little volatility as the Dow, despite a
barrage of horrible headlines I will get to shortly.
Furthermore, today (Tuesday) we have THREE
manipulation angles to be cognizant of, albeit just two here in the
States. Americans tend to be more secular than most nationalities,
believing the world revolves around the U.S., especially in all matters
gold. America is far from the largest gold producer, and further
from being the largest consumer, but since most trades are priced in
dollars, Americans erroneously believe U.S. supply and demand dominates the
gold market. In reality, gold is the only international currency,
and given recent “safe haven” strength in the “U.S. dollar
index,” Americans have NO IDEA gold has been rising in nearly all
global fiat currencies.
As I mentioned yesterday, gold is challenging the
key €1,300/oz level for the SIXTH TIME in the
past six months, a massive resistance level created by intense Cartel
pressure. Both yesterday and today it was above this level most of the
day, suddenly plunging below it at day’s end care of the evil
ones. When this key level is exceeded, possibly now due to the
aforementioned “staggering demand,” I expect a sharp breakout of
several hundred Euros. The only questions is when, and if you think the
Cartel is having trouble keeping gold prices down in the largely anesthetized
U.S. market, think how difficult their task is in the chaotic European
Once again, the only way to understand gold is to
realize it is not an “investment” but international, universal
MONEY. Europeans, Japanese, Indians, Brazilians, and Iranians have the
same fiat currency fears as Americans, and consequently will compete for
every last ounce of available PHYSICAL metal in the coming weeks, months, and
Meanwhile, the Dow attempted to shed its gains late
in the day, but a mini-”HAIL MARY” rally prevented such a
tragedy. Nowadays, it’s all about PERCEPTION – nothing
more, nothing less. It doesn’t matter that the ECB head described
the European situation as “very grave,” i.e. they have two
choices, DEFAULT or MONEY PRINTING. Or that his proposed
“solution” to the problem includes the institution of – get
this – yet-to-be-created initiatives to enable growth AND austerity.
Quite the enigma, huh? Talk about Keystone Kops with NO CLUE,
intent SOLELY on spraying “buzz words” to the doting press.
ECB’s Chief Warns
Situation Is ‘Very Grave’
Apparently, his words were taken to heart by traders
of the newly downgraded EFSF bonds, which plunged to levels last seen before
the LTRO MONEY PRINTING ORGY was announced. Of course, you would never
know anything is wrong by the great action of the PPT-supported stock
markets, which as noted above are no longer allowed to decline.
EFSF Spread Back To LTRO Wides
In fact, per yesterday’s Bizarro
World reference, unrelenting PPT support has so tainted the dynamics of
what were once freely-traded markets, that clueless “analysts”,
“portfolio managers”, and “commentators” are now
making up ANYTHING to explain why stocks are always rising, the classic
“market action makes commentary” propaganda sought after by
manipulators. For example, the Dow was up 100+ points yet again
this morning, so I checked Yahoo Finance to see if any “positive”
headlines were being used to explain the strong action. The top story
on the page was the following, depicting exactly what I spoke.
A normal person would assume “Wall Street rallies
on China data” refers to strong economic data suggesting recovery, but
in fact this article states the polar opposite, that China’s
economy expanded at the weakest pace in 2-1/2 years, “suggesting
officials may try to boost growth in the near term by tweaking monetary
policy.” Ah, the mantra of the stupid, particularly brainwashed
Wall Street analysts who, after a decade of increasingly intense monetary
intervention, believe “the bad news is really good news, since China
slowing more than expected suggests an expectation of further
Wall Street rallies on China
Perhaps the Dow rose, yet again, on the
“good news” that the U.S. government will be illegally operating
above its debt ceiling for another 10 days, in the process once again raiding
the nation’s pension funds. Incredible that the debt ceiling was
just $14.2 trillion in August, and will shortly be $16.3 trillion, a level already
expected to be breached by September. Boy, that
will be a fun campaign issue, huh?
Treasury Resumes Pillaging
Retirement Accounts To Fund Deficit Spending Until Debt Ceiling Raised
Or perhaps “investors” were juiced that
the initial 50% Greek “haircut” plan is now being proposed at
68%, suggesting Greek debt is worth no more than 32 cents on the
dollar. But don’t worry, the ISDA claims such an event would not
be considered a default by CDS holders (LOL).
Bloomberg Reports That Greek
Private Creditor Deal Near, At 32 Cent Recovery, According To Hedge Fund
But let’s face it,
the PPT can only support the market so much. The level of “market
participation” by non-government computers and HFT algorithms is less
than a quarter of the total, but 25% is still a large amount, enough to
overwhelm the PPT if fear and/or panic conditions reflective of
the true state of the economy were to express itself. Fortunately for
the PPT, expectations of MASSIVE, OVERT QE later this year are growing
stronger, for the Fed, ECB, PBOC, BOE, BOJ, and essentially ALL the
world’s Central Banks. Yesterday, I posted an article predicting
a €1 trillion LTRO follow-up on February 29th, and today
found this expectation – from Credit Suisse, no less – of a
€10 trillion LTRO announcement next month!
$10 TRILLION Liquidity
Injection Coming? Credit Suisse Hunkers Down Ahead Of The European Endgame
Readers, DO NOT forget the bottom line – plain
old, simple MATHEMATICS. TPTB can – and will – print as
many dollars, Euros, pounds, yen, and renminbi as
they can, and continue to relentlessly manipulate financial markets the world
round. However, they WILL NOT be able to overcome “Financial
Mother Nature” forever, and when she finally passes judgment, the
resulting economic catastrophe will be UNPRECEDENTED in human history!
Guest Post: You Can’t
Fool Mother Nature For Long: Financial Markets
Wednesday morning, and it looks like it’s
going to be an interesting one today. Per the above news flow, as well
as below, it’s hard to make ANY conclusion other than uninterrupted
economic contagion, in the U.S., Europe, and the entire world.
As we anxiously await announcement of the PSLV offering size (DETAILS LATER
IN THIS RANT!), the Cartel is desperately trying to cap the PAPER
markets. This morning, as usual, the first WATERFALL DECLINE occurred
at EXACTLY 3:00 AM EST, but if you notice below, the two-week long resistance
at the KEY ROUND NUMBER of $1,650 for gold appears to be turning into support,
which as you know I view as very constructive over longer periods of
Oops, as I wrote this sentence, shortly after
the COMEX open, gold suddenly WATERFALL DECLINED for no reason, yet again,
to $1,648, just to make me look bad. They really never stop, do
they? So far, we’re 2-for-2 today, with a shot at 4-for-4 for a
second straight day!
Notwithstanding such shenanigans, the very
KEY ROUND NUMBER of $30.00/oz in silver is also
starting to look more like support than resistance, and the
PSLV offering is going to make it extremely difficult for the Cartel to break
that increasingly staunch price level, especially after December’s
ridiculous “OPERATION PM ANNIHILATION II” attack, which took
silver an incredible 27% below its 200 DMA while no other markets materially
moved. Today, silver is still 17% below its 200 DMA of roughly $36/oz, and when that level is recaptured I expect the next
run to $50/oz. to commence.
Remember, the single most important catalyst
of silver’s move to $50/oz last year was
PSLV’s $575 million PHYSICAL purchase in November 2010, not
un-coincidentally just days before the commencement of
“D-DAY” suppression operations on November 9, 2010. If Sprott again has difficulty sourcing PSLV’s silver
in a reasonable amount of time (it took three months last time), the
aforementioned PHYSICAL shortages are likely to receive A LOT of media
coverage, the Cartel’s ultimate nightmare. When $50/oz, the “ULTIMATE TRIPLE TOP BREAKOUT” (i.e.
31 years in the making) inevitably occurs, I would not at all be
surprised to see a run to the $70-$100/oz range
And how’s this for a shocker? Just a
week after my scathing RANT, “ZERO HEDGE SUCKS…YEAH
YOU, TYLER DURDEN,” the world’s broadest financial
website posted the following article describing Cartel gold and silver suppression,
espousing nearly all the key tenets of my theories. Perhaps Zero Hedge
will realize PM suppression occurs every minute of every trading
day and, more importantly, that it is the single largest cause of
the current global economic collapse. We’ll see, but
better late than never.
Gold & Silver
Banker-Cartel Prolonged Price Suppression Has Set the Foundation for an
Explosive Move Higher in 2012
BREAKING NEWS, MID-RANT: The Sprott Physical Silver Trust (PSLV) deal totaled a
whopping $304 million at $13.20/share, with a 15% greenshoe
that will likely bring the total to $349 million. This is a HUGE
positive for the “good guys,” which will make it VERY difficult
for the “bad guys” to push silver back under $30/ounces for any
meaningful period of time!
Based on rough calculations of how many shares will
be outstanding, silver ounces purchased, and their ultimate purchase price,
this deal will increase PSLV’s size by roughly 45%, to a market cap of
roughly $1.1 billion from $750 million previously. Moreover, the number
of silver ounces held are estimated to increase from 22 million to 33
million, which depending on how many ounces of above-ground silver actually
exist in the world (I’ve seen estimates of 600-900 million ounces),
would give PSLV ownership of 3%-6% of the GLOBAL TOTAL.
If these calculations are correct, this deal was
priced at a premium to Net Asset Value of roughly 7%-8%, down sharply from
the 34% premium it traded at last week but in line with the average premium
witnessed on new offerings (of the Sprott and
Spicer funds) over the past decade. I believe this deal will attract
still larger pools of institutional capital aiming to PROTECT their
portfolios with PSLV’s convertibility into PHYSICAL silver, in turn
raising the NAV premium back to double digits in the coming months, and
potentially MUCH HIGHER.
This morning, a one-two punch of cataclysmic
news emerged, although you’d never know it watching the global
PPT control over stock markets. To start, the shocking edict issued
last night by the World Bank, forecasting dramatic economic deterioration and
warning developing economies to “prepare for the worst.” Ho
hum, nothing to see here, so long as the Dow is UP.
World Bank Cuts Economic
Outlook, Says Europe Is In Recession, Warns Developing Economies To
“Prepare For The Worst”
Or how about the IMF announcing it requires an
additional $1 trillion of FRESHLY PRINTED MONEY to fund its operations
for just two years, the great majority of that money to be sourced
from the U.S. and Europe, who themselves require tens of trillions of
funding to continue operating. I mean, can ANYONE truly believe
“all’s well” in light of this constant barrage of hideous
IMF Says 2 Year “Funding
Gap” Hits $1 Trillion
Or how about the “unexpected rise” in
the U.S. core PPI this morning, its largest monthly gain since July 2011, and
more importantly, its largest year-over-year gain since 2009. Lucky for
TPTB that, for some unexplained reason, gasoline prices have fallen sharply
despite crude oil prices inexorably rising.
As an oilfield service analyst from 1995-2005, I did
not analyze oil prices specifically but worked side by side with those that
did. I learned a fair amount of the dynamics between crude oil and
gasoline prices, which are obviously directionally correlated but to varying
degrees depending on numerous factors. In 15 years of observing this
relationship, I have NEVER seen what we are observing today, i.e. soaring
crude prices and falling gasoline prices.
I’m guessing it has something to do with the
recent decoupling of the Brent/WTIC spread following the debottlenecking of
the Cushing oil terminal in Oklahoma, but I cannot be sure.
Irrespective, if crude oil prices continue to rise, it is hard to believe the
temporary crude oil/gasoline anomaly will not revert back to its normal,
direct relationship, yielding strong upward pressure on gasoline prices, and
thus the CPI and PPI inflation statistics.
Oh, by the way, please notice the BLS plans to
“change the weightings” within the PPI, as it always does when
new methodology is required to fool the public into believing inflation is falling
when in fact it is rising.
Core PPI Rises By 0.3%,
Highest Y/Y NSA Jump Since June 2009, BLS To Change PPI Weights
And speaking of inflation, which by DEFINITION means
increases in the money supply, how much inflation is required by the
Fed to MONETIZE the enormous international selling of U.S. Treasury Bonds,
per this dramatic headline hot off the press? Or, for that matter, the dramatic
outflow of capital from U.S. equity mutual funds, let alone the dramatic
buying surge of PHYSICAL precious metals?
China Brings US Treasury
Holdings To One Year Low, Russia Cuts Holdings By 50% In One Year
On to the political front, where as I predicted last
week, it looks like the Republican nomination is on the cusp of become a
two-man race, as one by one the rabble have been weeded out, leaving just
Romney and Ron Paul standing. As I have said all along, the Wall Street
money is clearly in Romney’s camp, as it was with Obama in 2008 and
Bush in 2004, so it is his race to lose. In my view, only a dramatic
economic collapse in the next six months will give Paul a chance –
which certainly might happen - but otherwise,
prepare for this jackass Romney to be President. Sorry Romney fans, his
legacy is no different than the Wall Street scum funding him, the polar
opposite of what’s best for America.
Ron Paul Tells Newt, Santorum,
Perry ‘It’s Over’ After Trio Fail to Make VA Ballot
And sorry, too, to Bix
Weir, who’s Road to Roota
theory has vehemently called for a Sarah Palin endorsement of Ron
Paul. Not only did she not endorse Paul, but dissed Romney as well, in
favor of the biggest jackass of all, Newt Gingrich. I love Bix, who agrees with my thoughts on nearly all topics,
but believe his theory in this realm to be a bit “out
there.” Of course, I will be thrilled if she reverses course and
Will Newt Gingrich benefit
from Sarah Palin endorsement?
And speaking of jackass #1, it appears
mega-millionaire Romney (net worth estimated at $250 million), was subject to
a measly 15% tax rate in 2011, less than half his calculated tax bracket, as
well as that of his secretary. Don’t you just love America?
Romney Pays Less In Tax Than
Not to mention, most of that wealth was amassed in
the private equity business buying up companies and liquidating them.
In essence, he worked in the hidden, non-public world of wholesale
job-slashing, an “undisclosed version” of Gordon Gekko, so to speak. Actually, I liken his business
more to that of corporate raider Edward Lewis in Pretty Woman, per the
video below (which took some time to source, by the way).
Scene from Pretty Woman 1990,Business Dinner and
(time stamp 1:15 through 3:15)
All politics aside, is THIS a “man of the
people” capable of righting the U.S.S. Titanic?
And one more note on politics before I move on, this
time of one of my favorite topics, the 9/11 cover up. After all these
years, the DOD has decided in its great wisdom to grace us with the so-called
“missing Pentagon footage” of a plane hitting the building.
A full decade without images from the 25+ Pentagon property cameras,
except a few damning frames essentially proving no plane hit the
Until now, of course, when some of the most
amateurishly doctored video in history magically surfaces. If
you want to see just how stupid TPTB really are, watch this video of a
far-from-professional video editor taking apart this fraud, frame by frame.
911 Pentagon Footage Fraud – See the MISSING FOOTAGE!
And before my next topic, it looks like we are now officially
3-for-3 in Cartel attacks today, as gold suddenly decoupled from the Dow /
Gold x 2 capping algorithm at EXACTLY 10:00 AM EST and WATERFALL DECLINED for
the third time today.
Given today’s PSLV offering and, subsequently,
enormous PHYSICAL silver purchase, the Cartel has been playing DLITG,
or “Don’t let it turn green” with GLD all day to calm
potential PM excitement, the same tactic I have observed for the past
decade. Not only that, notice how gold was just about to push back
above the KEY ROUND NUMBER of $1,650 when it was bombed at EXACTLY 10:00 AM
EST. I guess we’ll just have to wait and see how the $1,650/oz battle resolves (just surged back to $1,656 as I
edit), but given gold’s 200 DMA of $1,634/oz
is just below this level, that gold has only traded below its 200 DMA on just
5% of ALL TRADING DAYS over the past decade, and that its fundamentals have
NEVER been more bullish, you can be sure which side I’m betting with.
And one more item before I get to today’s RANT
topic, which has bothered me for many years. And that is the
unmitigated need of nearly everyone to speak of mankind’s
“resilience” and “historical ability to overcome obstacles.”
Of course this is true from a macro standpoint, in that man still lives on
this planet, as opposed to being extinct like dinosaurs or dodo birds.
But from a micro standpoint, it is a silly statement made simply to give
false hope, or in the case of most, to prevent readers or listeners from
fleeing the room in fear and disgust.
I understand that businessman (particularly money
managers), politicians, and community leaders need to “sugar
coat” unpleasant topics with caveats such as “things are bad, but
if we work hard they’ll get better,” but fortunately I, RANTING
ANDY, do not have that constraint at Miles Franklin. Simple MATHEMATICS
tells us the financial system will collapse, particularly when no solutions
are even being offered (as there are none), just stopgaps to
“kick the can down the road,” which incidentally engender one
thing, and one thing only – MONEY PRINTING. More MONEY PRINTING
only makes things worse, and I don’t care if humankind evolves into a
race of “superheroes” and “messiahs,” it still will
not be able to resolve the current financial crisis without a painful,
earth-shattering CRASH resulting in mass poverty, social strife, and likely,
The funny thing is that, per my earlier comments,
man tends to be incredibly secular. Just as Americans believe
the world revolves around the U.S., mankind in general believes it has evolved,
and is thus smarter than past generations. Unfortunately, what
we are experiencing today is just a repeat of the dozens of times
throughout history when self-important, charismatic MEN postulated that a
financial system based on FAITH and CREDIT could supersede the only proven
system throughout history, one backed by GOLD.
Each instance has ended the same horrific way, with
depression, inflation, and WAR, for the same MATHEMATICAL reasons today will
end the same way. Just because we have greater technology, particularly
“financial engineering” and the communication and transportation
advancements that have enabled a global fiat money standard,
doesn’t mean the laws of “Financial Mother Nature” can be
repealed. All such technology has done is make the problem BIGGER and
extend its life by a few years, but ultimately “FMN” will get her
revenge, proportional to the exponentially larger size of today’s fiat
“Resilient” or not, the great global
dollar experiment is nearly over, and if you haven’t taken preparations
for its inevitable collapse, you will likely lose MOST, if not ALL
your net worth, and potentially even your life.
PROTECT YOURSELF, and do it NOW!
Today’s RANT topic is the namesake of the
below article, written by David Bond. He is a long-time newsletter
writer from Coeur D’Alene, Idaho, the heart of U.S. silver production
and victim to last week’s tragic closure of Hecla Mining’s Lucky
Friday silver mine by the U.S. government, due to ongoing safety
concerns. Lucky Friday operated for more than 50 years, produced
more than three million ounces in 2010 (nearly 0.5% of global production),
and was projected to grow its production levels over the next decade.
After two major accidents in the second half of 2011, including one yielding
a fatality, the mine has been closed indefinitely, and more likely, FOREVER.
I do not know David Bond personally, or have an
opinion on his work, although I have certainly been aware of his presence for
some time. The article below complains of the “War against
us,” suggesting Coeur D’Alene has been targeted by the U.S.
government, which is ridiculous. What the U.S. government is targeting
is ANYTHING related to Precious Metals they can get their hands on,
specifically PAPER derivatives such as COMEX Futures Contracts, un-backed ETFs
such as GLD and SLV, and MINING SHARES. TPTB know they have already
lost the battle for PHYSICAL silver, as evidenced by the enormous demand
for Sprott’s PSLV deal this morning.
That is why they will do ANYTHING possible to keep the public out of derivative
PM investments, and mining shares such as Hecla (down 20% the day of the
announcement) are their top target.
The War Against Us- David Bond – Silver Seek
Once again, I cannot SCREAM loud enough about the
risks of holding mining stocks as opposed to PHYSICAL gold and silver, as the
latter are irrevocable, irreplaceable, scarce MONEY while the former are
simply “paper investments” with limitless supply, escalating
risks, and an incredibly poor track record.
I once owned mining shares offensively due to
an expectation of an upcoming “internet mania,” which actually
occurred in the PM mining space in the early 1980s, by the way. But I
know now such an occurrence is nearly impossible in the current
political and economic environment, which I expect to deteriorate
DRAMATICALLY in the coming years. That is why I now
“invest” defensively by holding PHYSICAL gold and silver,
NOT SHARES, and sleep well every night. To demonstrate how successful
TPTB have been in their crusade against PM “investments, see the chart
below, depicting sentiment toward PM mining shares at LOWER levels
than the BOTTOM of Global Meltdown I in early 2009.
The Cartel has targeted MINING SHARES (via naked
shorting) with all their might, and if the shares somehow manage a material
recovery (they might), it will be into a period when the GOVERNMENT will
attack MINING COMPANIES themselves (via windfall taxes, nationalization
edicts, etc.), which will ultimately DESTROY the sector, limb from
limb. And by the way, there is no better evidence of my assertion about
the Cartel targeting of MINING SHARES than the fact that this indicator
literally peaked on “D-DAY,” November 9, 2010, just as bullish
sentiment toward PM shares was on the verge of EXPLODING (believe me, I was
Mr. Bond, I am sorry if your life is integrally
linked to Coeur D’Alene, Idaho, which incidentally I was lucky enough
to visit last year. However, that was the choice you made, and
in the battle with TPTB to PROTECT YOURSELF, living there could prove as much
a detriment as the benefit you envisioned. I left New York in 2007 due
to my belief Colorado would be SAFER amidst an environment of economic
collapse, and currently I would consider leaving mining boom towns such as
Coeur D’Alene and Reno if I lived there, given my belief that
GOVERNMENT INTERFERENCE into all things mining is likely to exponentially
expand in the coming years.
Yes, there is a war going on, by the Cartel to keep
the public away from the one sector that can save them, and my view is
ANYTHING related to mining companies and/or stocks is at extreme risk.
Though not “fool-proof” (as nothing is), PHYSICAL gold and silver
are by far the lowest risk alternative for protecting your net worth and,
simultaneously, giving yourself the opportunity to become “wealthy,”
which I state in quotes because PRESERVATION OF CAPITAL, NOT WEALTH BUILDING,
should be your primary goals amidst the expanding economic conflagration.
PROTECT YOURSELF, and do it NOW!