Friday, September 30, 2011

Stunning Plunge in COMEX Commercial Silver Net Short Positions

Startling Unpublished Keynes Equations Discovered (Friday Afternoon Humor)

This is a hilarious spoof on the Keynesian cult.

Bullard: Fed will act if economy weakens further

So the Fed will cure our economy by injecting inflation.  That must be their third mandate.  God help us all.
"Should economic performance deteriorate, monetary policy will respond," Bullard said, according to slides of a presentation he was scheduled to make . "The Fed is not now, or ever, 'out of ammunition'."

With interest rates near zero, Bullard said, the Fed can support the economy through inflation and inflation expectations and asset purchases are a "potent tool".
QE to infinity is now officially baked into the cake.

Kodak Said to Weigh Bankruptcy Filing

Will Start Of Landesbank Mortgage Litigation Against Bank Of America Push Stock To New 52 Week Lows?

Given the recent bad news, it would not surprise me if Morgan Stanley (exposure to French banks who have Greek exposure, and Chinese exposure) and Bank of America (exposure to residential mortgage-backed securities lawsuits) go the way of Bear Stearns or Lehman.  Their credit default swaps are proactively signalling all is not well.

David Stockman: Blame The Fed!

U.S. Economy Tipping into Recession

Thursday, September 29, 2011

SHOTS FIRED: Eric Sprott Says Jamie Dimon's Criticism Reflects An "Inability To Acknowledge" The Banking Crisis

From Jim Sinclair

Dear CIGAs,
During reactions in gold, the degree of gold and gold share holders pessimism is EPIC and without cause.
Why Gold?
1. Gold is a currency.
2. Gold is competitive to paper currency.
3. Gold is not a commodity
4. Gold is a barometer of fear.
5. Gold is a barometer of confidence in government.
6. Gold is insurance.
7. Gold is insurance against government gone mad.
8. Insurance is not something you trade.
9. Gold is the financial high ground when global debt problems exist.
10. Gold in your hand eliminates all counter party risk.
11. Every single currency is paper backed by nothing.

Stay the course. Nothing is solved, nor will it be.
Gold will be violent. Gold is nowhere near fully priced.

Gold stupidity

lol...this has got to be the stupidest commentary on gold vs. the USDollar I've ever seen.

Some investors aren't confident with what gold is backed by, or if it's backed by anything at all.  As compared with something like the USDollar.
Investors are comfortable that the USDollar is backed by the American government, so no matter what is happening to the American economy, something like the USDollar is backed by the Federal Reserve, that's going to be around a year from now.  That's a much more comfortable investment for them.
 Thank you Bridget for that sage advice!

Bernanke says Fed would act if inflation falls

As predicted, when Operation Twist 2 fails (again), QE to infinity will be the mandate.

Goldman Sachs: "Welcome To The Great Stagnation"

Zero Hedge 1, Goldman Sachs 0.

What Europe’s Leaders Mean When Their Mouths Move: Jonathan Weil

Wednesday, September 28, 2011

Central banks continue to buy gold

Doug Casey: Buying Physical Gold and Silver

Deputy PM Says Tax Limits of Greek Society Exhausted

After thousands of years as a civilized society--and a beacon of democracy, Greece is in danger of losing its sovereignty.  All thanks to a few predatory bankers who loaded them down with insurmountable debt.

The destiny of mankind hinges upon gold

Greece Runs Out Of Ink, Can't Print Tax Forms

Greece, along with the rest of the Euro zone, and ultimately the entire developed world, is about to get Medieval.

Greeks Sought Irish Central Bank Counsel. No, Seriously!

One bankrupt country advises another--for a fee, of course.

Head Of UniCredit Securities Predicts Imminent End Of The Eurozone And A Global Financial Apocalypse

Holy Mother of God, the head of a major bank speaks the unspeakable truth...

Asia Gold: Buyers rush in after price slump; premiums up

You won't see this article in mainstream US media.

Germany slams 'stupid' US plans to boost EU rescue fund

Sunday, September 25, 2011

Where is Mexico's gold, and is it really gold at all?

Swiss stock exchange will let traders settle in gold

The fact that the Swiss are considered the most conservative bankers in the world going back centuries makes this headline significant.  It's not merely the headline; it's the concept of gold being a legitimate currency which is just starting to gain traction among financiers.

Michael Pento - What You Must Know about Gold & Silver Selloff
There are two reasons why the gold market, and indeed the entire commodity sector, got stuffed last week.  First off, the Counterfeiter in Chief, Ben Bernanke, managed to disappoint the gold market by deciding to sterilize the bond purchases made on the long end of the yield curve.”

“By offsetting the purchases of short-term Treasuries with sales of shorter duration notes, Bernanke will not increase the supply of money or dilute the currency to a greater extent than he already has in performing ‘Operation Twist.’ 

But make no mistake, the global economy is faltering and QE III isn’t far off.  However, the gold market was expecting the Fed to do more in the way of easing during this two-day meeting—like ceasing to pay interest on excess reserves....

“Therefore, in the short-term, there will be selling pressure on all commodities.  Number two, and this is conjecture on my part at this juncture, but I believe sovereign states in Europe that are flirting with insolvency have resorted to dumping gold in the open market. 

When under duress, these countries are forced to dump what they can, and there just isn’t any asset that has performed better in the last dozen years than gold and commodities.

But the good news here is that gold is moving from a very few, weak hands, to a diffused group of strong ownership.  Ultimately, this will be beneficial for gold prices in the long-run and this recent selloff should be a welcomed opportunity for investors to accumulate a more substantial position.”

Bleeding the Patient, Modern Economics and the Symbolic Economy
Modern economics is analogous to the junk-science of 17th century medicine, and it serves a symbolic economy of phantom wealth and freedom. Back in the bad old days, the premier physicians of the age accepted and practiced the idea that the cure for illness was to bleed very ill patients, effectively weakening them. Countless patients who might have recovered if simply left "untreated" died as a result of the misguided "science of healing" of the era.
Only with the advent of a true understanding of the nature of infection, the immune system and disease did the "folk" pseudo-science of bleeding pass from accepted medical practice.
We are mired in a similar era of pseudo-science being accepted as actual science, i.e. as reflecting the underlying causal mechanisms of life and the universe, and that pseudo-science is called economics.
As I have noted here many times, we are experiencing not just a standard-issue financial crisis but the failure of the entire pseudo-science edifice of modern conventional economics.
The basis of pseudo-science is to mask unfounded, misguided and potentially disastrously dangerous ideas drawn from superstition and folk beliefs with the external trappings of real science. Thus economics presents itself as a "science" by invoking the symbolic magic of equations and quantification of data gathered from the real world.
In esence, the "understanding" of junk-science is symbolic: the body is plagued with "humors" which can be drawn out via bleeding the patient, etc. The actual workings of the body, far beyond the conceptual reach of the folk/junk symbolic "science," are conceptualized symbolically via analogies: disease is "hot" or "cold," the body functions like a clock, etc.

In the exact same fashion, conventional economics "understands" the workings of the economy symbolically, and its "cures" play out in its artificial construct, the symbolic economy.

Ben "Big Brother" Bernanke Goes Watergate, Prepares To Eavesdrop On Everything Mentioning The Fed

We are all targets--especially the blogosphere.  I guess the lunatic fringe wasn't paranoid after all.

Saturday, September 24, 2011

Peter Schiff - Gold & Silver Plunge Mirrors 2008, What’s Next?
“Anyone who bought silver on leverage last week probably already has a margin call, so that’s difficult.  But for the cash buyer who is buying to preserve their wealth from inflation, yesterday was a great day.  Days like that are opportunities.  

I know for some people they are thinking, ‘Oh no, my gold has lost value.‘  Your gold is still your gold, your silver is still your silver.  Yes, if you had to sell it today you couldn’t get as many dollars or euros for your gold, but we’re not selling it today so what difference does it make? 

We’re holding it because we’re probably going to need it for tomorrow and so the forced selling is a good opportunity for the people who aren’t forced to sell and still are looking to buy.

I have a feeling that all of this volatility is on the speculative end.  It’s the leveraged players, it’s the hedge funds, the big money that’s gambling.  The physical market is not driven by speculators, it’s real demand by people from all around the world who want to save and who don’t want to do it in currencies where the interest rates are at zero and where the printing presses are running at full speed.

I think physical buyers are going to respond to the drop in price by increasing their purchases.  That’s how the market works, when prices are lower, you want to buy more....

“It’s only the speculators that are looking to buy high and chase momentum.  Then when it goes down they look to bail out.

They (speculators) are not there to be long-term investors and as soon as the momentum goes, they are out the door.  If I liked silver last week at $40 an ounce, I’ve got to like it even more at $30 an ounce.  It’s the same silver, so if I can get it for less money, why wouldn’t I buy it?”

When asked what he is doing with his own money Schiff stated, “I bought some mining shares in my personal account in the last couple of days and even some non-mining shares.  I like to take advantage of lower prices.  You always have to be looking at these declines as buying opportunities.”

ALERT: Which Criminal Bank Hates SGTreport? Find out Now:

Sprott Money Temporarily Runs Out of Physical Silver

Case Closed: CME Hikes Gold, Silver, Copper Margins (again)

Wednesday, September 21, 2011

As gold price suppression grows more brazen, maybe Asia will defeat it

Another long, but must-read opinion by GATA on central bank and bullion bank gold suppression schemes.

"All Glory Is Fleeting"

Why gold is not in bubble territory

I am re-posting this chart by Sprott Asset Management.  Gold is still vastly under-owned by institutional investors.  Gold and gold-related assets represent less than 1% of global total assets under management.  Hence, the price of gold is nowhere near bubble levels.

In fact, given the 12-year bull market in gold, the lack of participation by the "smart money" is stunning. Gold has appreciated more than 7-fold since its 1999 and 2001 troughs of approximately $250/oz., yet the media, retail and institutional investors have completely missed the relentless run up in prices.  Can one imagine what the headlines would look like if the Dow Jones Industrial Average had appreciated seven-fold in the last decade?  Everyone and his brother at cocktail parties would declare themselves experts on the bull market in equities.

Meanwhile, gold and silver have made their "stealth" bull runs with nary a peep.  Indeed, the only headlines about gold are forecasts of a bubble bursting.  The same pundits who were blindsided by the bubbles in tech stocks and subprime real estate are the same ones who are self-appointed experts on gold bubbles.  They're also the same ones who have been calling a top in gold over the last decade.  Do your portfolio a favor and ignore these so-called "experts."

Click on image to enlarge.
See disclaimers in the side bar.

Disclosure:  long precious metals and mining shares.

Tuesday, September 20, 2011

Is the US Monetary System on the Verge of Collapse? Bringing Moral Hazard To A Deadbeat Near You

Exclusive post: precious metals mining shares are breaking out

As predicted, the previously underperforming mining stocks are outperforming the actual metals spot prices in gold and silver.  One possible reason for their underperformance was hedge funds were correctly playing the long gold trade as euro and US debt problems were emerging.  As a hedge, they were shorting the mining stocks.

But the fundamentals of mining shares are extremely bullish, with low price/earnings ratios.  Despite falling input costs (energy, water, labor costs), output prices in the form of gold and silver production have risen.  It's a perfect storm for margin expansion and share price appreciation.

Since gold-related assets are under-appreciated and under-owned by institutional managers, there is still room to run.  Most are waking up to the fact that major gold producers are raising their dividends, which means large pension and mutual fund managers can now add them to their portfolios.  These fund managers are victimized by groupthink, so when they see their gold bug peers outperforming themselves, they inevitably will jump on the bandwagon--at much higher prices.

A bubble is only a bubble when prices outrace fundamentals.  The fundamentals for gold mining companies couldn't be better right now.  Some shares are priced lower than when gold was $800/oz.  Today, gold is at $1800.  You do the math--see previous blogs on operational leverage.

Other catalysts include major producers runing out of easily recoverable deposits.  They will look to acquire mid-tier and junior mining companies to replace their depleting reserves (remember:  a mine is a constantly depleting asset).  They will apply premiums for any acquisitions.  While shares of major miners will appreciate, their acquisition targets will soar going forward.  I believe major gold mining share prices will appreciate the most initially, but as investors get savvier, they'll turn to solid junior miners, which will propel their shares to the stratosphere.

Of course, most mining companies are intrinsically worthless as they own no recoverable deposits, but for the juniors and exploration companies that do prove up reserves, their shares will soar many-fold.  The mining industry is fraught with risk so that's why deep research is essential.

Own the physical bullion for insurance against currency debasement and to protect purchasing power, while eliminating counterparty risk.  Good luck everyone.

See disclaimers in the side bar.

Disclosure:  long precious metals and mining equities.

America's debt woe is worse than Greece's

LBMA campaigns for gold to be Tier 1 asset for banks under Basel III

It is indeed interesting that the LBMA is advocating gold to be a Tier 1 asset, as the LBMA members are the worst perpetrators of gold price suppression schemes.
European central banks have become net buyers of gold for the first time in more than two decades, a significant sign that the role of precious metals in currency markets is not only being reassessed but actually changing, reported The Financial Times, while there also is a campaign afoot to include gold as a Tier 1 bank asset with the Basel Committee on Banking Supervision.
However, the Basel III initiative is highly significant too because it would trigger a far wider use of gold within the banking system, not quite a return to the gold standard but the next best thing as far as demand for the yellow metal is concerned.
Presently Tier 1 assets include government bonds such as Greek bonds and a widening of Tier 1 to include precious metals is seen as a way of shoring up confidence in the banking sector with assets that do not require official rating because there is zero counter-party risk.
The Chinese central bank has openly called for gold to be a part of a basket of assets used to support a new super-currency from the IMF, another indication of mounting support at the highest levels for giving a greater role to gold in the global economy,...

There is presently no pressure for silver to return to its old monetary role. Nonetheless if gold becomes more important then it would be logical to include silver, if only because the additional demand for gold would put considerable upward pressure on the gold price and silver is an alternative precious metal.
That is where the interest comes for gold and silver speculators of course. There is not sufficient gold in all of the world, for example, to back the US dollar fully with gold, and to do so estimates of the gold price range from $10-12,000 an ounce.

Silver is even rarer than gold with far smaller physical stocks and very little capacity to expand production that is often a by-product of huge copper mines.

Chinese Wikileak confirms gold price suppression, UAE gold imports up
The Chinese authorities have concluded that the US and Europe have been artificially suppressing the gold price for years, revealed a cable from the US Embassy in Beijing published by Wikileaks.

It reported a recent radio broadcast that said: ‘According to China’s National Foreign Exchanges Administration China’s gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the US and European countries. The US and Europe have always suppressed the rising price of gold. They intend to weaken gold’s function as an international reserve currency. 

Price suppression 

‘They don’t want to see other countries turning to gold reserves instead of the US dollar or euro. Therefore, suppressing the price of gold is very beneficial for the US in maintaining the US dollar’s role as the international reserve currency. China’s increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB.’

Save the Swiss Gold

The Swiss National Bank Gives Up
The Swiss National Bank finally gave up.  For months it tried standing alone against all of the bad monetary policies being pursued by the ECB, the Federal Reserve, the Bank of England and indeed, nearly all of the central banks of the world, but it was a losing battle.  So last week the Swiss National Bank succumbed to these pressures and pegged the Swiss franc to the euro.

Consequently, as the euro is debased, the Swiss franc will head south with it.  The world’s last safe-haven national currency has finally disappeared, making the ownership of physical gold and silver all the more important.

That the pattern of the Swiss franc in the above chart is similar to those of the other three currencies may surprise some people.  The obvious conclusion though is that the Swiss franc has not been a safe haven for at least a decade.  All currencies are being debased against the world’s time-tested and trustworthy numéraire – gold.

As I wrote last March, “the gold price is rising at an accelerating rate” meaning that national currencies are “losing purchasing power at an accelerating rate.”  These quotes accurately describe what happens to national currencies moving toward hyperinflation and collapse, which is where the above four currencies are headed.

London Trader - Massive Physical Floor in the Gold Market

Jim Rickards - Secrets of QE, Gold & Currency Wars

As usual, Jim Rickards is spot on in his analysis of the ongoing currency wars.  History shows that currency wars transition to trade wars, which transition to outright military conflicts in many instances.  Let's hope history doesn't repeat itself with that last step.

Exclusive post: gold market is changing as bullion banks are losing control

For years, gold traders could short the yellow metal during London and New York trading hours, and then go long the "barbaric relic" during Asian overnight trading hours--and come away with a nice profit for a day's work.  The logic was the anti-gold cartel at the LBMA and COMEX would surreptitiously suppress gold prices, usually using events like unemployment or housing data to time their bear raids.  However, Asians would bid gold prices up when their markets opened, as demand for physical gold was more than happy to buy the shiny metal at discounted prices.  There have been numerous studies to support this theory, some using statistics to prove these average daily pricing movements were anything but arbitrary.

Whether one believes in the anti-gold conspiracy or not, charting the price movements would have at least raised an eyebrow or two even for the most skeptical among us.  Given the lawsuits against JPMorgan Chase and HSBC for manipulating silver prices, the precious metals conspiracy theories are starting to gain traction.

That aside, I've started to notice a shift in the daily price movements in gold.  Sure, the price takedowns in New York trading still occur with far too much regularity, but lately the volatile price movements during COMEX trading are just as likely to be soaring during trading sessions.  This tells me the perma-short anti-gold bullion banks are starting to lose control.  In fact, according to Commitment of Traders (COT) data, these too-big-to-fail bullion banks have lightened up on their naked short positions, possibly due to ongoing investigations into the murky world of futures exchanges.

Between London, New York, and Asian trading of gold, $100 daily price movements are no longer rare.  Buyers of gold and silver in Asia have been bullish on these monetary metals for years.  What will break the grip of the anti-gold central banking and commercial banking cartel will be the flight to safety trade by institutional and sovereign wealth funds.  In fact, after years of central banks dumping gold into markets in order to suppress prices, 2009 was a turning point as central bankers became net buyers of gold, not net sellers.  That flow was reinforced in 2010 and is accelerating this year.

The take away message is even central banks of developed and emerging markets distrust Federal Reserve Notes (i.e. the USDollars) and are fleeing to the safety haven of gold.  Government leaders in Russia, China, Brazil, and other emerging countries are openly declaring their distrust of the Fed and US Treasury's printing press.  What used to be labelled conspiracy theory is now playing out in the trading pits of global exchanges.  Gold prices aren't necessarily rising:  paper currencies are collapsing.

Monday, September 19, 2011

Andy Lees Kills The Argument Of Endless Debt-Funded Stimulus
Alas, the world will be engulfed in mushroom clouds before economic Nobel peace prize winners finally admit their lunacy and that the false cause they have spent their lives defending, has been a lie. In the meantime, everyone else will continue to suffer. That is the only thing that is guaranteed: after all, it is the definition of insanity. And those in the status quo doing all they can to preserve their, well, status, are now all insane.

The Corporate Bank Run Has Started: Siemens Pulls €500 Million From A French Bank, Redeposits Direct With ECB

Peter Schiff FULL Testimony Before Congress on Obama Jobs Bill 9/13/11

Rob Arnott - Expect Tremendous Inflation Going Forward
One of the things I think is interesting, and people got a little blindsided, is people thought we would pursue somewhat the same policies as Japan and have somewhat the same course as Japan.  Now, of course, the tumbling of interest rates is reminiscent of Japan, but let’s not forget Japan began its two lost decades with a relatively small debt burden.  That’s not true for the US, our debt burden is quite substantial, 100% of GDP this month.

That’s a daunting burden.  That doesn’t even count the GSE’s, now backed by the US government, it doesn’t count state and local debt and when you add those in you are at 170% of GDP, which is higher than Greece.  If you add in unfunded social security and medicare you are at 460%.  If you add in unfunded medicaid you’re north of 600%.

Just to put that into a personal context, if your readers think back on what they made last year, multiply that by six and imagine writing a check for that amount, that’s your share of our aggregate indebtedness.  So, yes, I do think inflation is a much more serious risk for us than it was for Japan.  Partly because our debt is much higher, all inclusive, if you include entitlement programs, than Japan’s ever has been.

The Federal Debt As Criminal Scam, The Federal Reserve As Criminal Syndicate

The Federal Reserve is a criminal syndicate buying debt that the government eagerly creates and sells for spending money that dumps the debt on us civilians. What perplexes me is that the scam is so simple and all the intellectuals either don’t get it or are handcuffed by mega-corporate media owners. The scam in simple terms:
1. Uncle Sam borrows money from The Fed, China, oil exporters, Bank of England, etc. by selling Treasury bonds
2. You are responsible for the bonds, i.e. IOUs
3. Uncle Sam collects taxes and pays the bondholders
4. The debt is breaking us; life will not be the same in the years to come
Uncle Sam borrows all its spending money from the non-government Fed and others, and spends only borrowed dollars raised from exchanging bonds for dollars as a debt plus interest on your back.
Uncle Sam collects income taxes and funnels the money to the holders of these criminal Treasury bonds.
The Fed/Treasury is an evil axis defunding you and me: the debt is $14.5 trillion; this is our debt, not the government’s debt. The government does not generally earn money; we do. Therefore every criminal debt certificate (Treasury bond) the Treasury exchanges for cash is a debt on you and me--a promise to pay for which citizens are responsible to pay, IOUs in simple terms. If the government printed the money instead of the criminal Fed, there would be no debt.
Uncle Sam borrows bucks and you become automatically indentured to pay back the bond and pay the vig! How is this not a criminal enterprise? If you go to a loan shark, at least you get to have the money in your hand and can spend it before you have to repay the loan and pay the vig!

Interactive Infographic Of The Doomed European Financial System
Click on image to enlarge.

Valedictorian Speaks Out Against School

A critical-thinking valedictorian.

DSK Says Greece Is Done

EU Bailout—Don’t Worry Be Happy

The Fed Audit
The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Central Banks Net Buyers of Gold for First Time in 20 Years

Dutch: where is our gold?
Dutch Socialist Party has asked the Secretary of the Treasury for the whereabouts of the Dutch Central Bank’s gold

On Friday 16 September, the Dutch Socialists Party (SP)’s spokesman for financial affairs, Mr. Ewout Irrgang, has asked the Dutch Secretary of the Treasury 10 detailed questions about the gold supposedly held by the Dutch Central Bank. Questions vary from: where is the gold? why are gold and gold receivables one line item? how much gold is loaned out? All questions (in Dutch) can be found here and cpied below.

This is potentially a big breakthrough for global awareness on how central banks hide crucial info from the public and the disastrous effects central banks have on society. The society benefits from competitive currencies, chosen voluntarily by the people.

The Questions:
1 Did the Dutch Central Bank (DNB) loan part of their gold?
If yes, how much and to whom?
2 Why are gold and gold loans stated as one line item in the annual report 2010 instead of mentioned as 2 separate items?
3 Can you give an overview of the yearly yields of the gold loans during the past years?

4 Where IS the physical gold of DNB? At which locations and how much is where?
What is the reason that the gold is still at these locations?
5 What was the most important reason for DNB to sell the gold in the past? Are the storage costs a reason?
What are the actual costs to store the gold?
6 Can you confirm that since 1991 of the 1700 tons of gold about 1100 tons have been sold?
Is the remark of journalist Peter de Waard correct that because of these historic sales there is a loss of about 30 billion euro?
If not correct, what is the right amount?
7 How much of the National Debt has during the past 20 years been paid off with the proceeds of the gold sales? Are you of opinion that the sustainability of the national debt will be improved by paying off the debt and at the same time selling the gold?
8 What is in your opinion the present function of the gold stock?
9 What is the relation between the size of the market of the gold stock and the size of the market of gold derivates?
What are the possible consequences of this?
10 Can you confirm that recently a number of countries have even enlarged their physical gold stock?

Do you have an explanation for this development?

China’s Gold Investment to Top Record: Cheng

Friday, September 16, 2011

How can they notice Swiss franc's devaluation and not gold's too?

Identities of JP Morgan Silver Manipulators Exposed

Skeptics of silver price suppression schemes should do their homework first before declaring us conspiracy theorists.  That's okay:  you lost, we win. The cockroaches are being exposed.

Don't be surprised if the alleged don't roll over on their fellow perpetrators.  I'm sure they don't wish to be victims of any "accidents", like Andrew Maguire was after the whistleblower decided to go public with his allegations.

Jon Stewart Brings Solyndra Mainstream: "That Custom Tailored Obama Scandal You Ordered Is Finally Here"

Another Lawsuit Filed Against JP Morgan For Silver Price Manipulation

Another lawsuit against JPMorgan for silver price manipulation.  And a reminder that it's futile to sue the government and its accomplices.  And another reminder to not use leverage and to definitely buy physical bullion.  As the article states:  use the price suppression to your advantage and buy at artificially depressed prices.

Europe's Response To Geithner's Advice: "I'd Like To Hear How The United States Will Reduce Its Deficits ... And Its Debts"
Two years after being laughed out by a bunch of Chinese students, Tim Geithner realized that his hypocrisy may pass muster in the Beltway, but the crowd is tougher across the Atlantic. As Reuters reports, the much anticipated meeting between Geithner and the euro FinMins in Wroclaw, Poland, lasted all of thirty minutes and if nothing else managed to unite the Europeans... in their ridicule and derision of the man that has become a global muppet caricature. The litany of quotes needs no explanation: "I found it peculiar that even though the Americans have significantly worse fundamental data than the euro zone that they tell us what we should do and when we make a suggestion ... that they say no straight away," Maria Fekter, [Austria's Finance Minister] told reporters afterwards, recalling a difference of opinion between Geithner and German Finance Minister Wolfgang Schaeuble on how to reinvigorate the euro zone and tax financial deals." And the kicker came from Belgian Finance Minister Didier Reynders, who responded 'tartly' that "We can always discuss with our American colleagues. I'd like to hear how the United States will reduce its deficits ... and its debts." Alas, as Tim has found the hard way, being one of the biggest offendors when it comes to collapsed economies does take away from his credibility. So if we may suggest, Timmy should i) focus on fixing the US economy, and since he has repeatedly failed at that ii) to immediately resign.

Trump Now Takes Gold as a Security Deposit

China to 'liquidate' US Treasuries, not dollars

Thursday, September 15, 2011

Peter Schiff audio interview

The "Perception Management" Economy
But reality, unlike perception, cannot be changed by propaganda. The Chinese buying Italian debt, for example, does not make the debt or Italy's insolvency go away.

Thus the Status Quo's campaign of "solving" fundamental problems with perception management will necessarily fail. A noteworthy example is the Eurozone's Status Quo attempt to convince everyone that Greece, Portugal, Spain and Italy will not default, when their default is already unavoidable.

Human behavior, as reflected by the stock market, can be manipulated in the short-term: yet another announcement that Greece has been saved is followed by a 200 or 300-point rally, which fades as the tides of reality soon wash over the sand castles of perception management.

The Status Quo in Euroland can set all the agendas it wants and announce all the rescues it wants, but none of that propaganda will reduce the crushing debts by a single euro. Sand castles are no match for the tides of reality.

Europe Tells Geithner To Take His Advice And Shove It

Special John Hathaway Report - Gold, Opportunity of a Lifetime

The Tax Cheating Treasury Secretary Lies Again

What happens when a nation goes bankrupt
With the Lehman collapse, a lot of people got hurt… but it was mostly a financial and economic issue. When an entire nation goes bust, the pain is felt much deeper: the most basic systems and institutions that people have come to depend on simply disappear.

Argentina’s millennial debt crisis is a great example of this… suddenly the power failed, the police stopped working, the gas stations closed, the grocery stores ran out of food, the retirement checks stopped coming, and the banks went under (taking people’s life savings with them).

European leaders (with Chinese help) can postpone the endgame for a short time, but they’re really just taking an umbrella into a hurricane. It would be foolish to not expect a Greek default, and it would be even more foolish to not expect significant consequences. The only question is– how are you prepared to deal with what happens?

Sprott Shifts From Gold Bullion To Gold Stocks, Explains Why

Must-read from Eric Sprott.

A Declassified Jon Huntsman On China's Terror Of A Gold-Pegged Dollar

Saturday, September 10, 2011

Goldman Head Gold Trader Speculates About "Authority" Intervention In Gold, Sees Precious Metal Pushing Higher

The head gold trader at Goldman Sachs hints about "authority" intervention by central banks and bullion banks in an effort to suppress gold prices.  In my world, "intervention" is legalized price manipulation.  I would further posit that it's not only legal, but since it is implemented by governments and the financial elite, it's institutionalized theft.

The blogosphere has been ranting about this topic for years, but it is indeed ironic that Goldman Sachs is acknowledging its practice, given Goldman Sachs was one of those bullion banks.

Welcome To The Currency Wars
The central banks of the US, Europe, Switzerland, Japan, Brazil and China (via their peg to the USD) are all actively suppressing or cutting their interest rates, buying their own sovereign debt or actively intervening in their currency markets.  These are all very different activities with different costs and benefits but the one thing that they all accomplish is an increase in fiat currencies.  As one bank prints or otherwise weakens their own currency, by definition they strengthen someone else’s.  This causes the exporters in the stronger currency to lose earnings and growth.  Which causes them to try to weaken their currency and by definition, strengthen someone else’s.  In the current economic environment where the US is the dumping ground for the rest of the world’s excess supply, this only works so long as we are increasing our own debt levels.  But our debt threshold as a people, economy and government has been reached, breached actually.  Which means we are now forced to devalue our own currency to maintain our mountain of debt, by definition strengthening the rest of the world’s currencies.  Unfortunately, this means we’re trying to increase our own exports at exactly the same time every country is trying to do the same thing.  So we devalue to make our exports cheaper.  And then they devalue to make their exports cheaper.  And then we devalue again.  And then they devalue.  Rinse, wash, repeat.

In my opinion, the Swiss and Brazilian moves signaled the true beginning of the global currency wars.  The depreciation race to the bottom has begun.  Trade wars will be next.  This is just getting started.  Once FX interventions fail, governments suffering from falling exports will attempt to protect local champions via protective taxes, tariffs and the limiting of certain imports.  Affected governments and industries will retaliate for their own loss of exports and so on and so forth.  Welcome to the currency wars.

Meanwhile In San Diego...

As Greece Denies, Germany Begins Greek Default Preparations

Whenever a treasury official, central banker, finance minister or government leader denies rumors of financial distress, illiquidity, insolvency, bankruptcy, debt default, or imminent credit downgrades, believe the rumors.

BAC Triggers Avalanche Of $7.00 Stop Loss Sell Orders

Warren Buffett injected $5 billion into Bank of America recently in an attempt to catch a falling knife.  I warned then that blindly following the Oracle of Omaha could be a mistake, in light of all the troubles BAC is having on the mortgage front and lawsuits against the embattled bank.

G7 Says "Central Banks Ready To Provide Liquidity As Required"

The G-7 is ginning up the printing presses.

Tuesday, September 6, 2011

The Death of Liquidity

Ted Butler has been on  the silver bandwagon for over a decade.  And he's been spot on.

Wikileaks Discloses The Reason(s) Behind China's Shadow Gold Buying Spree
"China increases its gold reserves in order to kill two birds with 
one stone" 
The China Radio International sponsored newspaper World News Journal 
(Shijie Xinwenbao)(04/28): "According to China's National Foreign 
Exchanges Administration China 's gold reserves have recently 
increased. Currently, the majority of its gold reserves have been 
located in the U.S. and European countries. The U.S. and Europe have 
always suppressed the rising price of gold. They intend to weaken 
gold's function as an international reserve currency. They don't 
want to see other countries turning to gold reserves instead of the 
U.S. dollar or Euro. Therefore, suppressing the price of gold is 
very beneficial for the U.S. in maintaining the U.S. dollar's role 
as the international reserve currency. China's increased gold 
reserves will thus act as a model and lead other countries towards 
reserving more gold. Large gold reserves are also beneficial in 
promoting the internationalization of the RMB." 

More Beijing embassy cables show China sees gold as central in currency war

These cables exposed by wikileaks are incredibly damning on the western world's desire to maintain the global financial status quo--that of the USDollar as a reserve currency.  It is also very revealing that the return to the gold standard is starting to materialize--albeit at much higher gold prices.

Andrew Maguire - LBMA Shorts Will be Forced to Take Losses

Read this article on fractional paper gold trading vs. the physical bullion market.

Turk - Historic Event as Gold Surges & Stock Markets Tumble
This is another example of the Wall Street head fake, as manipulators shake out the weak hands.  The weak hands are either dumb--or just that--weak.  Selling gold into this market will prove to be ruinous, in my opinion.

The Great Credit Contraction

China central banker warns global economic risks increasing

Monday, September 5, 2011

Economist Calls Entitlements A Massive Ponzi Scheme And Says US Is Actually $211 Trillion In Debt

In case, you missed it the first and second time around, here's another interview by Dr. Kotlikoff on our nation's true debt level.

Greenspan Says Euro ‘Breaking Down’

I want every reader of my blog to read this.  Keep in mind these opinions are coming from a former Fed Chairman, in fact one the most visible and influential Fed Chairmen ever, if not THE most.  This opinion is not coming from  the blogosphere.  Having said that, us "lunatic fringe bloggers" have seen this coming a mile away.  Ignore Greenspan's warnings at your peril.

No Gold Bubble

Greenspan also said that he did not think gold, which reached a record above $1,900 an ounce this week, was in a bubble.

“Gold, unlike all other commodities, is a currency,” he said. “And the major thrust in the demand for gold is not for jewelry. It’s not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating.”

After leaving the Fed, Greenspan founded the consulting firm Greenspan Associates and has been a consultant or adviser to Deutsche Bank AG, Pacific Investment Management Co. and hedge fund Paulson & Co.
Again, put this into context.  As Fed Chairman, Greenspan was the master anti-gold evangelist.  He knew that confidence in the USDollar as the global reserve currency meant the price of gold had to be incessantly knocked down (i.e. price suppressed).  Even current Fed Chairman Ben Bernanke denied gold was money in a Congressional testimony.  When queried by Ron Paul why gold was stored in vaults as reserves on our nation's balance sheet, and why not diamonds, Bernanke lied and said it was due merely to "tradition", and that gold was NOT money.

Greenspan, Bernanke's predecessor, completely refutes Bernanke in this article.  It certainly appears central bankers only speak the truth when they are OUT of office, not while IN office.

Even Goldman Sachs Secretly Believes That An Economic Collapse Is Coming
Perhaps most startling of all is what the report has to say about the debt problems of the United States and Europe.

For example, this following excerpt from the report sounds like it could have come straight from The Economic Collapse Blog....
“Solving a debt problem with more debt has not solved the underlying problem. In the US, Treasury debt growth financed the US consumer but has not had enough of an impact on job growth. Can the US continue to depreciate the world’s base currency?”
Remember, this statement was not written by some guy on the Internet.  A top Goldman Sachs analyst put it into a report for institutional investors.

The report also goes into great detail about the financial crisis in Europe.  Brazil writes about how the euro is headed for trouble and about how dozens of financial institutions in Europe could potentially be in danger of collapse.

Government Regulator Sues Wall Street Banks For Fraud In Subprime Mortgage Deals

Thanks to Kitty for finding this.  I've posited these mortgage-backed securities and associated derivatives were the sources for the insolvency of our banking system.

Friday, September 2, 2011

Play Metals Stock Volatility to Win

Rick Rule has one of the best track records in resource investing.

Business Booms and Depressions Since 1775

Expand the chart, and you'll see we're overdue for an economic winter cycle.

On Gold: Team Sinclair-Turk 1, Marc Faber 0

Jim Rickards - Investors Fleeing GLD into Physical Gold

Barron - “There’s Not Enough Gold to Go Around Right Now”

Bank Of America Sued For $31 Billion In Mortgage Losses

Warren Buffett is showing again he is not infallible after all.  The Oracle of Omaha just injected Bank of America with $5 billion last week.  Today, the government just sued BAC for $31 billion in mortgage losses.

Gold sales would not solve Europe's debt troubles

My retort is gold will solve Europe's debt troubles--but only at a much higher gold price.

Talk of a gold-backed Euro bond sent gold prices soaring.  The anti-gold crowd will insist "you can't eat gold."  My response is you can't eat paper Euros or USDollars either.  But at least gold has a 6000 year history of maintaining its value--and being a monetary metal.

Precious Metals Surge As QE3 Now Merely A Formality

By the way, BTFD = buy the ****in' dip.  And QE3.0 = a 3rd round of quantitative easing.

Quantitative Easing is not the title of a bad porn movie.  It is an unconventional monetary policy where the Federal Reserve Bank purchases financial assets like mortgage-backed securities or US Treasury bonds in order to liquefy the financial system and to pin interest rates lower (in 10-year US Treasuries, for example).  The program allows the US Treasury to print USDollars so the Fed can purchase said assets.  Its intended effect is to stimulate the economy, although its long-term effect is questionable, if not downright detrimental to sustainable economic growth, as it creates more debt and is inflationary.

Synonyms for QE include debt monetization, deficit spending, stimulus spending, or our old favorites:
"creating money out of thin air" or "ginning up the printing press."  In reality, it's not even about printing currency.  It's a computer keyboard entry.

Thursday, September 1, 2011

CNBC's Bob Pisani does a segment on gold

Anybody see the irony of this?  Here are his previous wrong calls on gold:

One of his 2011 predictions:
4. Gold declines but other commodities gain.
The gold bubble finally bursts, with gold stocks falling 20 percent, but other commodities and commodity stocks continue to outperform as global demand for copper and other base metals improves.
His prediction in 2000:
"It looks like gold is crossing over $300 this week, but trust me folks, gold is going nowhere." - Bob Pisani, CNBC February 2000
Trust him?  Gold was $300 in 2000, and in 2011, it is now over $1800, and we should have TRUSTED him?  Meanwhile, the stock market has crashed TWICE since then, while real estate has also rolled over.  Yet, we're supposed to trust this clown?

Gold: Why Doesn't Your Financial Advisor Recommend It?

Why Nouriel Roubini Is Wrong About Gold