Friday, August 31, 2007

Eat This Bastid

MarketWatch - 30 minutes agoBy Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares advanced at midday Friday on reports the Bush administration has readied measures to assist with mortgage defaults and before a speech by Federal Reserve Chairman Ben Bernanke.

Ah yes, living in the Land Of No Responsibility. Rumor is that Bush will banish money and declare everything is free. No one will ever have to work again. Big Brother will take care of everyone. [Imagine the stampede at our Southern Border]

Surely I jest... I hate making my mortgage payment every month. Is George Bush going to make mine for me too, or will I have to let it go into default first? What a can of worms.

Sad thing is, mortgage default IS NOT what's causing the global credit crisis. The sub-prime contagion is a symptom of a much larger monster devouring the commercial credit markets. It's a multi TRILLION Dollar monster pile of credit depravities that because of a tsunami of mortgage defaults has been exposed as literally worthless. George Bushes bailout response is merely a response to the financial "headlines of the day" and a psychological crutch for those drowning under the weight of their derivative loses.

It sure is good for Gold and Silver. When was the last time Silver was UP 30 cents over night? Of course, it's 8:18AM est as I type this. It remains to be seen how the Vermin of the COMEX react to this impending ass whuppin to their short positions in both Gold and Silver.

As I drew up the two charts posted above, The Vermin have attempted their usual opening take down of both Gold and Silver. Have been able to knock only $2 off Gold's high of the day, but it's only 8:45AM est. I continue to marvel at this DAILY COMEX effort to suppress Gold and Silver at the open. It really borders on criminal, and perhaps probably is. For now though let's enjoy this move...and secretly root for the Mother Of All Short Squeezes. Let us not forget that today is the END of the month and be mindfull of "the games people play."

Wednesday, August 29, 2007

Over, Under, Sideways...Up Or Down?

How amusing...

On Tuesday the market tanks because the Fed minutes didn't telegraph an impending Fed Funds rate cut. Never mind that the Fed minutes are from a meeting that took place more than a week before the Fed was forced to cut the "discount rate"...just to "DO" something "psychologically" meaningful to the markets.

On Wednesday, the market soars: AP - Stocks rebounded sharply Wednesday as investors, growing more optimistic about chances for an interest rate cut, sought bargains after the previous session's huge tumble. I'm sorry, but this is hysterical. So the market tanks Tuesday, and on Wednesday everybody "thinks" that because the market tanked Tuesday, the Fed will come to the rescue with a Fed Funds rate cut and there are "bargins" to be had.

Sad thing is, the Fed will almost be forced to cut the Fed Funds rate. Because if they come out of that meeting in September, and don't cut rates, the stock markets are going to get crushed. Let's face it, the stock markets are addicted to "easy money". And Easy Money Al retired two years ago. Will they get their fix on Wall Street, or will Helicopter Ben be Cold Turkey Ben? History is being made right before our eyes folks. This is the closet any of us may ever come to watching a nuclear bomb go off, and live to tell about it.

Has anybody noticed that Gold has recently become "attached at the hip" to the Yen? Golds inverse relationship to the Dollar is legendary, but lately it has been the Yen tugging on Gold's chain. The charts above are all to similar to dismiss this observation. Most of you probably look at the yen on a chart like this: which is a chart of the Yen Index. The chart above is the Yen vs. the Dollar chart. An explanation of the chart and how to "look" at it are on the chart. The charts are eerily similar. And it would appear that unless the Yen breaks down soon, Gold may not be taking out $700 anytime soon. Just an observation, but one worth noting perhaps.

Gold and Silver were "healthy" today, but then so were the schizophrenic stock markets. Until I see Gold rising substantially on days that the Dow is getting trashed, I'm going to keep my excitement well contained.

670 remains an obstacle to any advances in Gold. 11.95 / 12.00 remains a HUGE obstacle for Silver. I suspect that Silver will break through this wall when Gold knocks down 670. Until that occurs Gold should continue to find support between 658 and 663 / 664. Silver has support at 11.70 and 11.60.

Continue to pay attention...History is in the making...and the future is now.

Recommended reading:

The Gathering Financial Storm
By: Paul Tustain

The current lull might prove an opportunity for the prospective gold buyer. Gold has not yet moved up; in fact, it has dipped a little as stretched investment funds have sold whatever they can to raise cash and reduce their margin calls.

Nor can any serious comment on the gathering storm fail to remark on the apparent "flight to quality" which on Monday last week saw US Treasury bonds put in their strongest day since Black Monday 1987.

US Treasury bonds are part of the fast-growing and utterly irredeemable $9 trillion public debt now outstanding in the United States . The US trade deficit was also on record-breaking form again last month. Only a few short weeks ago these dreadful statistics drove the US Dollar to record lows against a basket of major world currencies.

Only a lack of imagination would allow investors to think suddenly of the US Dollar as today's "quality" refuge. Any respite for the Dollar will surely be temporary; indeed, the bounce we saw during the sharpest stock-market losses so far may have simply been short-covering by Dollar bears (of which there are plenty) rather than fresh buying of “quality”.

Everything that has just happened in fact makes things worse for the US currency. At the heart of this current crisis lies the bubble in poor-quality US home loans. It is US consumers who are being pinched; it is the return on invested US Dollars which is now being cut.

Lower US rates on the back of America 's weakening domestic economy will re-kindle a Dollar slide in due course. So the current lull may offer only a brief window, in which fewer, stronger Dollars buy more gold than they soon will.

Market Directions
− Sunday, August 19, 2007
Joseph Trevisani

The Fed has attempted to call the market to its senses by Friday's unusual actions. The discount rate cut is aimed directly at the panicky psychology that had gained so much momentum as the week progressed. The goal and the hope is to give the banks and other holders of questionable debt and securities time to figure out exactly what they hold and what it is worth. It is likely that given the time and space for analysis the banks will find that the threat to their balance sheets from sub prime mortgages and their packaging is far less than feared and that an orderly or at least semi orderly return to the lending markets will follow. The operational effect of the rate cut is almost purely psychological. For a non-trader, and now I am speaking as a former bank FX trader, Mr. Bernanke has an instinctive grasp of the psychology and the occasional herd mentality and sheer panic that can overtake any market. It is my guess that Mr. Bernanke would have made a very fine trader. If the markets resume normal operation shortly this 'discount intervention' will become the grist of market legend.

Tuesday, August 28, 2007

One Man's Trash, Is Another Man's Treasure"

The Fed has encouraged banks across America to line up at "the window" for an unlimited supply of credit. Many have, many are, and many more soon will. What are these banks going to do with all this "money"?

When the Fed pumps money into the economy, it doesn't bail out mortgage lenders that have taken wild risks.

Nor does it go to Wall Street firms up to their ears in mortgage-backed securities.
The money goes almost entirely to commercial bankers, most of whom are running away from the mortgage markets as fast as their legs will carry them.

Result: For the Fed to persuade bankers to take the money is hard enough. To get them to dump substantial sums down the drain in the mortgage market is next to impossible.

Many people think the Federal Reserve can just pump money into the U.S. economy, and that's where it stays.

Not true. The U.S. markets are like a bucket with a hundred leaks: The more money the Fed pours in, the more money that's likely to gush out — to Western Europe, China, and Japan.

International investors are being scared off by the dominos falling in the mortgage market. And they're scared off even more by the Fed's efforts to flood the U.S. market with increasingly worthless dollars.

Years ago, foreign money in the U.S. was a small factor. Today it's the single largest funding source for our national debt, and for the mortgage bubble itself.

When that money rushes back to its home country, the dollar's decline becomes a rout, and the rise in foreign currencies becomes an explosion.
-Martin Weiss

In effect, the Fed has lit the fuse on an incendiary inflation scenario. Buy trying to "buy our way out of debt", the Fed, through it's ever secret machinations, have chosen a path to destroy the US the "hopes" that this will "save" the economy. As foreigners repatriate their investments in US Assets, the sewage of the US Dollar will back flow across the oceans and flood our shores. The effect of all these toxic and worthless dollars finding their way home will send the inflation meter off the scale.

When a foreign entity purchases a US Asset, he must sell his local currency and buy Dollars to purchase it. This "creates" a demand for Dollars. For the past several years, America's greatest export has been the toxic waste called "mortgage backed securities". They came with a AAA rating and the promise of "high yields". In a world seeking ever higher yields for their "fixed income" investments", these toxic derivative packages were like manna from the gods. US Treasury yields were like peanuts compared to the promise these little "debt bombs" offered.

But few ever considered them debt bombs. They came with AAA rating from the very well respected American ratings agencies like Moody's and S&P. Nobody saw past the window dressing...they only saw the "high yields". And with the world awash in Dollars, many foreigners traded in some of their money for ours, sent it back to us, and got a toxic debt bomb in return. All was hunky dory...until the bombs went off.

This is an example of how foreigners "finance our debt". If we weren't selling these high yield jewels to them, where would the mortgage bankers get the money to make more and more sub-prime loans? The cycle of money. We buy manufactured goods from overseas with US Dollars. The folks overseas buy toxic waste from us with the the Dollars we sent them to pay for the goods...over, and over, and over....

And now that these unfortunate foreign investors see the truth about US Dollar backed assets, they want nothing to do with them. Their trust in American Financial Markets and the US Dollar has, is, and will be broken. In effect these foreign investors will not only begin to dump their "investments in America", they will quit buying them all together. And that's when the US Dollar shit will really hit the fan.

You see, as these foreign investors dump their Dollar holdings, they have to buy their local money back to bring it home. [see the Japanese Yen] Foreign money leaves America, and the filthy, festering, flotsam of the US Dollar begins to pile up on every street corner in America. Viola! Inflation, what a stinking mess.

Unless, of course, if you own Gold and Silver. "One man's trash, is another man's treasure."

The Coming Flight to Gold
by Roland Watson

Panic has seized the minds of many as the shaking of a credit implosion rumbles through the marketplaces of today’s moneychangers. The ground is giving way beneath them threatening to suck them into a financial hell of derivative defaults and dishonored debts. The penalty is eternal death for hedge funds doomed never to rise again whilst for others they escape those searing flames by the skin of their solvent teeth.

The markets have taken a few blows these weeks past but not strong enough for some to believe that government debt will totter and fall. We shall see but the economic and financial assaults of the past suggest that it is the Golden Tower that men will resort to when all else fails. In that light let us consider gold.
Another morning on the COMEX, and another take down of the Precious metals right out of the box. This is getting ridiculous. Above I have posted a 5-minute chart of Gold since yesterday's close . On it I have identified the opens in Asia, London, and this morning New York. It would appear to me that the rest of the world knows the Truth about Gold and New York is trying to cover that Truth up with their paper they throw daily at the markets. Are the bullion banks stepping up to the Fed's "window" and borrowing money so they can short even MORE Gold on the COMEX every day? Think about can Gold be the true inverse of the Dollar, if you can print countless Dollars to short it? Scary thought....

Gold and Silver retreated Monday as we suspected they might. Friday's dash higher obviously a "short covering" episode. We're still waiting for a short covering "event" to launch the metals higher, and get the Bulls back in the saddle. For now I guess we must be content to wallow in this puddle of uncertainty and wait for both to break from their recent consolidating trading ranges.

Gold must remain above 663/664 and clear 670. 658 remains support. Silver must, I repeat must, clear 12 with authority to get any of the Bulls in that market's attention. Support at 11.70/11.60/11.48.

This just in:

Home Prices: Steepest Drop in 20 Years
S&P Says Housing Prices Fell in 2Q by Steepest Rate Since Its Index Was Started in 1987

NEW YORK (AP) -- U.S. home prices fell 3.2 percent in the second quarter, the steepest rate of decline since Standard & Poor's began its nationwide housing index in 1987, the research group said Tuesday.

The decline in home prices around the nation shows no evidence of a market recovery anytime soon, one of the architects of the index said.
MacroMarkets LLC Chief Economist Robert Shiller said the declining residential real estate market "shows no signs of slowing down."

I guess we won't be seeing inflation in home prices again anytime soon then eh?

Merrill Lynch (MER.N: Quote) has downgraded to "neutral from buy" investment banks Bear Stearns Cos. (BSC.N: Quote), Lehman Brothers (LEH.N: Quote) and Citigroup (C.N: Quote).

This news does not bode well for the general equities markets, because as go the financials, go the markets. And as of 11AM est., they have tanked. This of course has foolishly once again pressured the precious metals and commodities markets. When will people finally wake up and realize that these markets are the safe ones, not the risky ones?

Sunday, August 26, 2007

Bad Medicine. Good For Gold?

The week ending August 24th, 2007 may, or may not, prove to be a pivotal week in the evolution of this secular bull market in Precious Metals. ...a bull market that has been stuck in the mud for weeks. Fundamentally, technically, and seasonally this bull is ready to rage. I do not believe that it is a question of "if" this bull market will resume, but WHEN.

I, along with many other prognosticators and Precious Metals Counselors, have tried vainly to predict "the next big move" in Gold and Silver. It has been a humbling experience for us all. Everything I have learned and been taught about Gold suggests that we should be half-way to the Moon by now. Alas, we've yet to break orbit. Gold launched the day the markets in New York reopened following the 9/11 tragedy. Gold has risen, to date, 165% since then. It would be safe to say that in May 2006, Gold achieved "orbit". We are still a looooong ways from the Moon. It would also be safe to say that unless, and until, we decisively break the $700 barrier, we will not have broken orbit and set flight for the moon. And who's to say the Moon is where Gold will stop. Gold may well find it's way to Jupiter or beyond. I will go on the record here and now and suggest that $1000 Gold will not even be half way to the Moon.

It is interesting to note that Gold's ascension, begun following 9/11, coincided with the slashing of interest rates by the Fed to stave off the negative "effects" of 9/11 on the US Economy. Gold rose relentlessly as the Fed pumped US Dollar sewage into the global sea of liquidity.

Today facing the effects of the "sub-prime credit crisis" on the US Economy the Fed has gone on record stating it would provide "unlimited" credit to banks. More US Dollar sewage is on the way. Gold, circling in orbit high above the filth, has been waiting ever so patiently for a refueling by the Fed so that it may break orbit and head for the Moon. In an effort to "inflate the Nation's debt away", the Fed seeks to flood a World Economy already drowning in US Dollar sewage, with an unending supply of more!

The Mega-Trend is Your Mega-Friend
by Joel Bowman, Rude Awakening

That the unbacked currency of one country is now the core holding of all the countries in the world is unprecedented in the history of the world.

Books have been written about how it happened. The short version of this fascinating story is that it came about as a direct result of the U.S. being the "last man standing" after World War II. In 1944, as the war wound down, delegates from 44 war-battered countries gathered at Bretton Woods, New Hampshire, and, after some arm twisting, agreed to accept the role of the U.S. dollar as the currency of global commerce. The decision to make the greenback the supreme currency was made easier because, as a component of the agreement, the U.S. agreed to make it forever convertible into gold.

Unfortunately, when dealing with politicians, "forever" has a different meaning than to regular folks. In 1971, when a rush of European dollar-holders began converting their greenbacks into gold, Richard Nixon unilaterally canceled the dollar's gold convertibility. From that moment on, the U.S. dollar became an abstraction, backed by nothing at all... and unrestrained by anything other than political whim.

The growth of dollars outstanding since Nixon ended convertibility has been stunning. There are many implications attached to this global flood of unbacked money. But the primary concept to understand is that the supply of dollars increases rapidly; the supply of gold increases slowly. The debasement of the dollar knows no limits. Over time, therefore, gold's value in dollars should increase substantially.

Since the end of gold convertibility, there have been no limits on what the politicians can promise or what they can spend. A fresh example is provided by the sub-prime credit crisis, in response to which the government has gone on record stating it would provide "unlimited" credit to banks.

But "credit creation" is just a clever way of saying: "dollar-printing." That's why credit creation is a dangerous game - one that threatens to eliminate the U.S. dollar as a serious competitor to gold.

Any number of the investors who entered the gold trend early look at the price action of the yellow metal over the last year - which has been flat to slightly down - and worry that this is a sign that this gold bull market is over.

What they are doing is letting their emotions run their investment portfolio, a classic reaction during the "Wall of Worry" stage of any bull trend. They have made big money in gold shares, they understand the fundamental arguments, yet declining prices or volatility in the shares (which is especially prevalent in the summer months) gets them to thinking, then worrying, then selling.

Big mistake.

Simply put, Gold is an option on future monetary inflation, which is the Fed's typical response to all financial and economic problems. In other words, the gold complex reacts positively to the monetary "medicine", not the sickness. Lance Lewis addresses Gold's reaction to "monetary medicine" in his essay:

Shocked That No One's Buying Gold?
by Lance Lewis

The Fed has still yet to cut the Fed funds rate (which would be the most beneficial for gold and gold equities), but I expect that to come shortly (and probably inter-meeting). And when the Fed does begin to ease and people see that the Fed has indeed chosen to inflate its way out of this mess, I suspect we'll see gold bulls return in force to gold equities.

The question is (much like three weeks ago) where will gold and the gold shares be before that "confirmation" comes (ie- how much will investors anticipate), even though the probability of the Fed beginning to ease is now obviously much higher than it was three weeks ago? As for the answer to that question, I think it's unknowable. If one believes the Fed will choose to print, then one simply needs to be long gold and the gold shares and ride things out because you never know when the mirror image of last week's downside panic will appear (i.e. an upside panic).

In other words folks, it may be painful at this time, trying to hang on to this bull, but it could be much more painful if you allow yourself to be tossed off his back, and too scared to climb back on.

An international boycott of the US Dollar and all assets associated with it is brewing across the globe. Foreign nationals own a LOT of these derivative debt bombs that are becoming worthless as each hour of a day ticks past. Retribution for these losses will be devastating for the US Dollar and American consumers. The inflation that will soon begin washing up on our shores will make even Al Gore forget about Global Warming and the rising oceans. America, Americans, and the US Dollar are in deep do-do.

I can only laugh at these clowns that want to be President of this once great nation. Do any of them even have a clue? LOOOOOOOOOOOOOOL!

Stock Market Gyrations and the “Yen Carry” Trade
by Gary Dorsch, Editor, Global Money Trends

For long-term buy and hold investors in the US stock market, who simply sit through wild market gyrations, it’s good to know that you have “Plunge Protection Insurance.” The dynamic duo of US Treasury chief Henry Paulson and Federal Reserve chief Ben “B-52” Bernanke are working overtime these days, and using all the weapons in their arsenal to prevent a bear market from materializing, while Wall Street faces its worst financial crisis in many decades.

“I asked Chairman Bernanke if he would use all the tools available to him and he said, Absolutely,” said US Senator Christopher Dodd on Aug 21st, after a meeting with Paulson and Bernanke, the top commanders of the “Plunge Protection Team” (PPT). “Historically the federal funds rate has tended to follow movements in the discount rate,” Dodd added, alluding to the PPT’s most potent weapon.

Gary Dorsch's essay is a scathing review of the games the PPT has been, and may be about to, play in their unending effort to rig and manipulate markets across the globe. Which leads one to ask the question: How did these clowns get so much "power"? Glad I asked. The essay below by Chris Powell leaves one to wonder what can be done to take their power away, and see to it that they never get it back. It is absolutely disgusting that a small band of greedy SOBs are on the verge of destroying "The good faith and credit of the United States of America". This is a must read.

Country's top decisions made in secret by Fed
By Chris Powell

As it always does in crisis, the Fed has responded with secret meetings and telephone conferences with the great financial houses, deciding in secret whether to increase the money supply and government lending to financial houses and to raise or reduce interest rates. Such actions by the Fed will change the value of every dollar around the world. They will change the price of labor, goods, services, and real estate, as well as the return on savings.

But there will be no public hearings or public meetings at which the basis for the Fed's actions will be examined and those actions explained. It all will be accomplished in secret, with a vague communique issued afterward.

In any case, however the Fed's power is used, it is the power to influence and even rig markets and to decide all winners and losers in the economy. It is the ultimate patronage. And the exercise of that power, the monetary power of the United States -- the power to determine what money is, how much there is, its price, and the terms of its circulation -- is completely undemocratic, which is exactly why it is exercised in secret. For its exercise cannot bear scrutiny.

A few participants in the system occasionally have acknowledged as much, as when the Fed's vice chairman, Alan Blinder, remarked on national television in 1994: "The last duty of a central banker is to tell the public the truth."
Gold and Silver had a small dose of "panic buying" Friday afternoon. Both suddenly launched upwards at 12pm est. Was this real buying, or a heavy round of short covering? Monday's action should be telling. Gold hurdled resistance at 663/664, but stop short of strong resistance looming at 670. Silver vaulted 11.80 and once again hit a wall between 11.95/99. Fibonacci lines have played a big role in the containment of both metals lately. These little mathematical "zones" of resistance and support never cease to amaze me. Above I have posted two simple charts of Gold and Silver and their Fibonacci lines associated with their July highs and August lows on an hourly chart. The hourly chart really allows you to see the BS that goes on in the markets every 24 hours.

As we open the week: Gold finds near support at 663/664 and resistance at 670. Silver should find support at or near 11.72. Resistance remains near 12, and Silver may need one more retreat to support before she musters the strength to knock down 12. 12.28 will be waiting to take a shot at her should 12 fall.

Thursday, August 23, 2007

Kicked In The Teeth Again

Once again this morning, the Truthsayer and it's trusty side kick were both kicked in the teeth at the New York COMEX open at 8:20AM est. With Gold breaking consolidation at 663.50 and Silver gathering momentum at 11.87 both were slammed hard immediately by the Vermin of the COMEX to prevent their impending Paul Revere's Ride, "Inflation is coming, Inflation is coming!"

The Dollar, floundering all day, as the obvious becomes as plain as the nose on a bond traders face...inflation is coming! As the Fed pumps ever more Dollar sewage into an overflowing sea of liquidity, bond holders are quickly realizing that treasuries are not the safe haven they seek. Gold and Silver are the only assets that will float to the top of this sea of filth the Fed has unleashed across the globe. But the Vermin of the COMEX are determined to prevent that. They continue to hold, and push them under the sea. And like a beach ball, they will soon explode to the surface and launch skyward. In the future, as Gold and Silver rocket higher day by day, we will look down and thank the fallen Vermin for giving their lives to ensure our destiny.

It really was a pathetic day. Gold and Silver, obviously treasured overseas, are mugged and kicked to the curb by the Villains on Wall Street...AGAIN. These Rat Bastids know full well the lies that these two precious metals are fighting to expose: Deficits DO matter, Inflation is NOT under control, the housing meltdown is NOT contained, and the US Dollar is a worthless piece of crap. ...just to name a few.

We'll try again tomorrow, and the next day and the next. The demand for Gold and Silver is rising by the hour. Selling pieces of worthless paper on the COMEX will NOT, in the end, prevent the inevitable. The paper pushers are only buying time now. Putting off the Day of Reckoning for another day. Toying with our minds, by affecting "price", but not demand. Real buyers, real investors thank them for yet another extension of the Sale of the Century. Buy yours now, there won't be much if any to buy later.

In Gold today, former resistance at 658 held as support. We expected resistance at 663/664, but not the bitch slap we received. Silver of course took the most abuse today. This little guy has one helluva score to settle with these Rat Bastids. Watch again tonight as Silver rises in the dark to once again haunt this scum come sunrise. We'll be looking for a close to end the week above 11.80. I don't know about you, but I'm getting tired of the ping-pong match between 11.47 and 11.95.

And for the last word this week we seek the razor pen of Jim Willie.

Desperate Measures for USFed
Jim Willie CB,

The US financial system is teetering. Its USDollar currency is losing global support, with some outright revolts in crucial territories. The chief private sector export from the US financial sector has been fraud-ridden asset-backed bonds and their toxic credit derivatives. What should anyone expect? For years an institutional dishonesty within all things financial in the United States has been engrained, spreading, and become integrated with high levels of the USGovt. The Wall Street hucksters exported fraud. The backlash might be more severe than the soft soap gurus anticipate. Look for an international boycott. The shock waves in the US financial markets are preliminary symptoms of bigger events soon to come. Stability identified is nothing but quiet between tremors.



Gold Rush Looming?

What Is Wrong With This Picture?

Stocks Rise As Risk Appetite ReturnsWednesday
August 22, 6:35 pm ET
Wall Street Advances As Investors Sell Safe Government Bonds, Banks Borrow From Fed

I don't know about you, but that headline hardly tickles my confidence in the markets. I guess the precious metals will be up today as these "bold" investors seek out "risky" investments.

Of course, they'll be up in Europe and Asia... And as soon as the criminals in New York get a crack at them, they'll probably head south. Dem Rat Bastids ongoing effort, in concert with the Fed and Treasury, to suppress the truth these metals speak has gone beyond the obvious now. Take a look at the chart above from Kitco. The chart speaks for itself and clearly addresses the claims of market capping and manipulation. Up in London, Down in New York. In London, real bullion is bought and sold. In New York, PAPER is sold and sold and sold again.
The COMEX is the most criminal of enterprises that exists in the country...perhaps in the world. Daily action on the COMEX is geared towards one end ONLY. And that is the manipulation of "price". This filthy trading pit deals not in Bullion, but paper. The "price" of Silver did not go down yesterday morning because people were selling Silver. The "price" of Silver didn't go down yesterday morning because people were borrowing Silver and selling it short either. No, the "price" went down yesterday morning on the COMEX because the criminals that run this market place allow the criminal traders that trade there to print pieces of paper that allow them to sell Silver they don't even own or even exists for that matter.

One Silver contract on the COMEX equals 5000 ounces of Silver. Silver Warehouse Stocks on the Comex as of yesterday were 134,860,323 ounces. Friday August 17, 2007 COT report showed a TOTAL 113, 531 contracts SHORT Silver. The math is simple 5000 X 113,531 = 567,655,000 ounce of Silver held SHORT on the COMEX. But the COMEX only has 134,860,323 ounces of Silver available. What is wrong with this picture? In fact there is not even nearly enough Silver on the COMEX to cover all the LONG contracts. The LONG contracts equal 470,230,000 ounces. The COMEX could NEVER deliver on all those contracts were they to take delivery on contract expiration. In fact, there are 17,425,000 more ounces SHORT on the COMEX than LONG. What a scam. Can you imagine what the price of Silver would be today if the COMEX did not exist?

Silver has once again risen over night. At this hour Silver is trading above 11.80 and appears set up to try and takeout 11.95 resistance. Will it be allowed to? Resistance expected to follow should Silver clear 11.95 will be at 12.07 / 12.28 /12.57. .28 and .57 may be particularly difficult as they represent old support that is now new resistance.

Gold too has risen over night and is trying an assault on the important 663/664 area. Gold may chose to rest and consolidate this region before moving higher, much as it did near 658 earlier in the week. A move through 663/664 will find the road to 670 bumpy. Gold is clearly gathering momentum as investors appear to be finding their way to the "safe-house". Further deterioration in the Dollar will accelerate the search for this safe-house. Monday, Gold holdings in Street Tracks ETF, GLD, reached an all-time record. Silver will piggy back any moves in Gold at this time. If you're interested in Gold and Silver stocks, now is the time to be loading the boat as these sale prices won't last much longer.

It's Always Darkest Just Before Dawn!
By Peter Degraaf


Tuesday, August 21, 2007

Mexico Produces Oil Too Folks

Pemex Abandons Oil Rigs As Dean Nears

MEXICO CITY (AP) -- Mexico's state-run Pemex oil company abandoned its offshore oil rigs just ahead of Hurricane Dean, evacuating more than 18,000 workers and shutting down production in its main oil-producing region.

Temporarily closing the 407 undersea wells that feed the rigs in Campeche Sound will mean a production loss of 2.7 million barrels of oil and 2.6 billion cubic feet of natural gas a day, the company said. Of that, about 1.7 million barrels of oil a day is exported from three Gulf ports, where Pemex loaded the final tankers on Monday.

Operations also were being suspended at Pemex's huge "Floating Production Storage and Offloading" vessel, which can store 2.2 million barrels of oil. Pemex bought it last year.

"This will be the first test of the storm-worthiness" of the vessel, said George Baker, a Houston, Texas-based energy analyst who follows Pemex closely.

Pemex produced an average of 3.2 million barrels a day of crude oil in the first six months of 2007, of which 2.6 million barrels a day came from its offshore deposits.

Mexico was the United States' second-largest source of foreign petroleum products in May, the latest month for which statistics were available, according to the U.S. Department of Energy.

The U.S. imported 1.6 million barrels of petroleum a day from Mexico in May, down from 1.7 million barrels in May 2006. The 1.6 million barrels was slightly more than Saudi Arabia's exports to the United States but well behind Canada's 2.5 million barrels.

Pemex's largest single source of crude oil is the Cantarell complex of oil fields, which is one of the world's biggest. The smaller Ku-Maloob-Zaap oil complex is located nearby, also directly in Dean's path. Together the two facilities produce more than 50 percent of Pemex's crude oil output.

Despite the threat to Pemex's facilities, oil prices dropped Monday on the New York Mercantile Exchange, on expectations Dean would spare key U.S. refining facilities in the northern Gulf of Mexico.

Six of the 834 manned oil and gas platforms along the U.S. Gulf Coast have been evacuated, the U.S. Interior Department's Minerals Management Service said yesterday. That's shut about 1.8 percent of the Gulf's 1.3 million barrels of daily oil production and 0.7 percent of the region's natural gas.

Okay, let's look at the math and try and figure out WHY oil prices have dropped because US gulf oil production, which is smaller daily than Mexico's, will not be disrupted by Hurricane Dean. By the way, Hurricane Dean is a Category 5 hurricane now.

Mexico's closing of gulf oil wells will shut in 2.7 million barrels of DAILY production. That is 1.4 million barrels MORE a day than the US produces from the gulf. ...but Oil prices went down? Mexico closed it's ports that export 1.7 million barrels of Oil each DAY. The US imports 1.6 million barrels of Oil from Mexico each DAY. ...and the price of Oil went down? 2.7 million barrels of Oil are disappearing from world supply...their future unknown until the storm passes...and the price of Oil went down?

But a thug pulls a gun on an Oil worker in Nigeria, where a mere 700,000 barrels of Oil a DAY has been shut in, and the price of Oil soars? What is wrong with this picture I ask...

Gold and Silver continue to flounder with the rest of the World Markets as some of the dust settles from last weeks crisis. Uncertainty is an understatement, and markets HATE uncertainty. Though Gold and Silver are supposed to blossom amidst market uncertainty as they are supposed to be "safe havens". Demand, rising 'monetary' inflation, and seasonality all point to higher Precious Metals prices going forward. I'll take a turtles pace over last weeks debacle any time.

At this hour Gold is trying to navigate through 658...this is paramount if Gold is to move higher. Silver continues to flounder and awaits guidance from it's big brother Gold. Gold has been consolidating near 658 since the "big bounce" last Friday morning. A break through will most likely find resistance at 663/664 and then 670.

Silver would do well just to get back over 12. It will find many mountains to climb once it does, beginning at 12.28 and then 12.57. I would be overjoyed just to see Silver close above the 20 hour moving average at 11.72 today. Silver opened strong Monday morning and got swatted at 11.95, Fridays bounce high. That is the mountain we face today.

I'll post up now at 8AM as Silver has now joined Gold in the green column.

Monday, August 20, 2007

T-minus Any Day Now

At this hour my PC is strung together with spit and duct tape. My home's AC has tanked. And I am hot and bothered. I will dash this off quickly and hope it finds it's way to you.

Global demand for gold hits record US$14.5bn

Global demand for gold jewellery has reached a record US$14.5bn, 37% higher than the second quarter of 2006 with particular strength across the key global gold markets, according to figures released by the World Gold Council (WGC).

On the other hand, net retail investment increased by 51% in tonnage terms to 132.9 tonnes and 60% in dollar terms reaching US$2.9bn, compared to Q2 2006.

Where industrial demand is concerned, the second quarter of 2006 saw a slight increase of 2% in tonnage terms to 116.5 tonnes; and 9% up in dollar terms to 2.5bn, a new quarterly record.

In the Middle East and GCC region, demand saw a 20% increase to 97.5 tonnes higher than the depressed levels of the same quarter in 2006 (jewellery demand increased by 21%, net retail investment increased 9%).

Global Gold demand rising, coupled with today's incendiary inflation potential, Gold may soon be the ONLY "safe" investment on the planet soon.

The Panic of 2007
By: John Mauldin, Millenium Wave Advisors

John Mauldin's most recent essay is a must read to find an understanding of today's global credit crunch.

"More important than the symbolic 50 basis point cut in the discount rate was the move in today's FOMC statement from the semi-neutral bias of the last few months ('semi' as inflation was still their predominant concern until recently) to a clear easing bias today. Essentially today the Fed telegraphed a certain Fed Funds rate cut at the September meeting and possibly more cuts in the months ahead.

"The statement was very clear in signaling an easing bias and a policy cut ahead: 'Financial market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth forward. The statement also pointed that 'the downside risks to growth have increased appreciably.' And it clearly signaled that the FOMC is 'prepared to act as needed to mitigate the adverse effects on the economy arising from the disruptions in financial markets.'

"The stress on the downside risks to growth and the failure of the statement to even mention the 'I' word (Inflation) suggests that, in about a week since the previous FOMC meeting, concerns about inflations as the predominant risk have faded and concerns about growth have sharply increased. For a Fed that until recently was in the soft landing camp (slowdown of growth but still moderate pace of growth) today's statement is a signal that they are starting to worry about a hard landing of the economy.

"For the first time in over a year the Fed is now implicitly admitting that they underestimated the downside growth risk: until now the official Fed view was that the housing recession was contained and bottoming out and not spilling over to other sectors of the economy; and that the sub-prime problems were also a niche and contained problem. The sudden shift to a strong easing bias suggests that the Fed miscalculated until now the damage to the economy and to financial markets of the housing recession and its real and financial spillovers."
--Nouriel Roubini

Fundamentally, economically, and seasonally Gold is "t-minus any day now" for an explosion thru the $700 barrier and an assault of 4-figures. The flight will be bumpy, but a a flight it will be...a flight to safety that is.

658 remains the key to Gold at this hour. The bulls must recapture and hold 658. We're going nowhere until they do.

Silver has a long ladder to climb. The first rung is at 12.90. Followed by 12.07, 12.28 and 12.57. 12.57 could prove to be a bloodbath for the shorts in Silver. 12.57 is the support that gave way and led to the demise of many Silver Bulls last week. I look forward to payin dem Rat f***king Bastids back shortly.

Chins up folks. Nothing worth having or achieving should be easy. We'll appreciate it more, if we rise above the pain. And at this hour we are the Phoenix.

Thursday, August 16, 2007

Get Back In The Saddle

Let's just fantasize for a moment... As the markets open on a bustling Friday morning, there is a sudden flash, and the COMEX is vaporized. Terrorists? No, vengeance. Never in the history of mankind has a criminal act such as that which occurred today on the COMEX been witnessed. At precisely 10AM est the rug was pulled out from under Gold AND Silver. Only on the paper pushing COMEX could an event in Precious Metals like that witnessed today occur. This "event" was NOT about a weakness in Gold and Silver. It was about an opportunity for Dem RAT F***ING BASTIDS on the COMEX to once again STEAL from the public. NOT ONE SINGLE OUNCE OF SILVER OR GOLD WAS SOLD TODAY in New York. Just a lot of paper flushed down the toilet and the prices along with it. Disgusting!

So what do we do? We get right back on the horse, and attack these SOBs. They WILL be destroyed. Everything that's occurring globally to the financial system of the planet all but guarantees the imminent ascent of Gold AND Silver to the stratosphere and beyond. The Fed in the end will have to SLASH interest rates at the behest of the power base in Washington. This will crush the Dollar. Crush it I tell you. The absolute destruction of the US Economy is upon us all here and now. Unless the Fed throws Wall Street a bone, our children are destined to grow up in a third world country.

Laugh if you must. Gold and Silver "should" be vaulting in an environment such as we've seen the past two weeks. If things are so bad that the "money of last resort", Gold and Silver must be sold simply to raise cash, then things are perilously serious at this very hour. What we have witnessed today is absolutely shocking. It's time to back up the truck people. Folks should be selling everything they own to buy Gold and Silver now...NOT selling their Gold and Silver.

Relatively, Gold has held up quite well in the face of this carnage. Silver has been the victim of blatant criminal activity. I suggest buying Silver on the way back up, and forget about catching the bottom. Attractive buy opportunities may be found along the mountain face as we climb back up it. They are: 12.11, 12.33, 12.58. These numbers all represent old support, that has now become new Resistance. Breaching them one by one should build momentum as we scale the mountain.

Gold's volatility may persist a while longer, or end just as abruptly as it tanked this morning. They key to Gold is 658. Old support, now new resistance. Regain and hold 658, and the mountain top launching pad at 700 is back in site. Moving forward in time only lowers the price at which the downtrend line off the May 2006 730 high will be breached. Today that price is 679.

I got as screwed as the rest of our community today...but I remain firmly committed to the inevitable ascension of Gold to it's rightful place as The World's Real Money. And it's little albino brother, Silver, following in it's footsteps. In a sea of liquidity, only "real" money floats to the top.

Reckless Abandon

In the U.S., a new forecast suggested Tropical Storm Dean could pass to the south of the Gulf of Mexico, missing the region entirely or returning much diminished in strength.

Traders had worried that Dean, bearing down on the Caribbean from the central Atlantic, could damage oil and gas infrastructure in the Gulf, cutting supplies. Dean is expected to become a hurricane on Thursday.

"The storm is on a projection for a path to stay pretty much south, there's less likely to be great damage, so it's seen as less of a threat to markets," said Tobin Gorey, a commodities strategist at the Commonwealth Bank of Australia in Sydney.

What does a commodities hack from Australia know about Atlantic Hurricanes? Dean won't even enter the Gulf until Monday at the earliest. Hurricanes have minds of their own and seldom follow the "projected path". I will suggest that by Next Tuesday they will tripping over themselves to buy Oil contracts. And I will boldly predict that Hurricane Dean will smash Galveston Texas.

The storm concerns on Wednesday overshadowed a U.S. weekly government report that showed larger-than-expected declines in oil and gasoline inventories last week, but an increase in refinery activity that was in line with expectations. The decline in crude inventories supported higher oil prices, though the rest of the report was viewed as largely neutral, analysts said.

In its inventory report, the Energy Information Administration said refinery utilization rose 0.5 percentage points to 91.8 percent of capacity in the week ended Aug. 10, in line with the expectations of analysts surveyed by Dow Jones Newswires. Refinery utilization fell by a surprise 2.3 percentage points the previous week.

Crude oil inventories fell 5.2 million barrels last week, the EIA said, and gasoline inventories dropped 1.1 million barrels. Analysts had expected crude stockpiles to fall 2.1 million barrels and gasoline inventories to fall 400,000 barrels.

Supply and Demand. That's the bottom line for all commodities. Unfortunately Gold and Silver have been lumped into the commodities arena. Too "risky" to hold in these ever increasingly inflationary times, both Gold, and particularly Silver, are getting bashed around in the markets by fools that have lost the monetary respect for them.

Gold demand surged in Q2, recent market turmoil to underpin price - WGC
LONDON (Thomson Financial) - Reduced price volatility and robust Indian buying lifted global gold demand in the second quarter, said the World Gold Council.

In an interview with Thomson Financial News, Jill Leyland, the Council's economic advisor also said current worldwide financial turmoil will serve to underpin prices further as investors rush into safe haven assets, like gold.

Global demand in tonnage terms, which refers to physical buying, rose 19 pct to 922 tonnes in the April to June months compared with the same period a a year ago. Demand from India, the world's biggest physical market, accounted for 317 tonnes of the total amount.

In recent weeks broader financial markets have collapsed largely because of defaults in the US sub-prime mortgage lending sector and on fears of a credit crunch. Gold was one of the first commodities to fall as players sold the metal off in a bid to raise cash to cover losses elsewhere. Investment into the metal as a safe haven asset caught gold's fall, however.

'A lot of people misunderstand gold as a safe haven and expect it to react immediately,' Leyland at the WGC told Thomson Financial News. 'It's more of an insurance people buy when they are worried.'

Prices are currently hovering around 665 usd and, while lower than the near 700 usd level gold has flirted with several times this year, they remain well supported by safe haven investment flows.

'You don't get an immediate response because people will be running to cash in, the gold price has been jerked around a bit but it's pretty stable,' said Leyland.

Other experts agree, with UBS (nyse: UBS - news - people )' John Reade just this morning noting that 'the longer this credit crunch goes on, the more likely that gold will attract safe haven buying,' adding he expects the credit crunch to continue.

On the physical side, seasonal demand is expected to pick up in the fourth quarter, after the summer lull and amid Christmas, Diwali and Eid festivals which could spur buying.

And that's the bottom line. Gold and Silver may not look pretty today, but they're likely to be the Belles of the Ball come Fall. It goes beyond frustration to watch the action in the Precious Metals as this sub-prime contagion infects the World's financial Markets. All "should be" rising rapidly. The fact that they are not perhaps is an indication of just how truly serious this financial crisis is. If people are forced to sell their Gold to raise cash, as many have suggested, then things must be really be in a lot worse than we are being led to believe by the media. But for every seller there is a buyer. You can be sure a few Indians are lined up to buy as you read this.

Yesterdays CPI numbers were a hoot. Anybody that believes them probably lives in a cave. One number that got lost in the maelstrom of bad news yesterday was the TIC report. The monthly TIC net flows decreased to $58.8 billion in June, down from $107.3 billion in May. This is significant because the June Trade balance was -$58.14 billion. Uncle Sam was able to keep his checkbook in the black by ONLY $660 million. The TIC [Treasury International Capital] report measures the flow of money out of the US vs. the flow of the money in. When the money coming in falls short of the money going out, Uncle Sam has Insufficient Funds in his account, and he can't pay his bills. Of course, I guess with his connections he could just print up some, but I think you get the picture...Interest in investing in America is on the wane. And in light of this credit crisis that was manufactured on Wall Street and endorsed by the Federal Reserve, I doubt many foreign investors are going to be rushing to Uncle Sam's Bank to make a deposit in the future.

Gold and especially Silver are looking ugly at this hour. The Yen is on one hell of a banshee train run up right now. I like many of you am a bit dismayed at all this, but remain resolute in my belief that everything occurring now is ultimately going to make Gold the overlord of all currencies. This mega move up in the Yen is definitely causing a lot of selling in Gold, just as a mega move up in the Dollar would here. This is why Gold has been weak overnight the past two nights. The Japanese have been selling as the Yen has risen. The Dollar looks particularly weak against the Yen today as it has come back down some over night. If this drift in the Dollar continues into the trading day today, perhaps this slide in the Precious Metals will abate. Predictions now would be foolish. We must let the chips fall where they may. You're either in, or you're out. I'm in 'till they throw me out kicking and screaming.

Tuesday, August 14, 2007

Is That A Hurricane?

Oil Gains as Storm, Weather System Threaten Gulf Oil Production

Aug. 14 (Bloomberg) -- Oil rose more than 1 percent in New York, the biggest gain in two weeks, on concern a tropical storm and a separate weather disturbance may damage oil platforms and pipelines in the Gulf of Mexico.

Dean is the first storm ``that potentially could be working its way into the Gulf,'' said Dominick Chirichella, an analyst at Energy Management Inc. in New York. ``Everybody is focused on it. Everybody immediately has visions of Katrina and Rita.''

Crude oil for September delivery rose 76 cents, or 1.1 percent, to settle at $72.38 a barrel on the New York Mercantile Exchange. Oil was at $72.75 in after-hours trading. Futures are up 16 percent in the past three months.

A low-pressure system in the south-central Gulf of Mexico could form into a tropical depression ``at any time'' tonight or tomorrow, and coastal areas in its path may not have much warning, the hurricane center said in its outlook at 5:30 p.m. Miami time.

LOL! Hurricanes are nothing to laugh at, but these Oil traders are buffoons. That's right, I said BUF-FOONS. A blind man could have seen this coming. Here are two valuable sites to have bookmarked:


Latest Satellite Imagery,

I look at these two sites every morning from the first of August thru mid-October. A casual look at the satellite photos of the Gulf yesterday showed the makings of a tropical depression plain as the sun in the sky. It was no shock to me to learn today that a "storm" may be springing from the Gulf itself as I type this. And at this hour, what was yesterday a "ball of counterclockwise clouds" in the southern Gulf now covers almost all of the Gulf. This baby could wind up in a hurry.

Recall yesterday, Oil traders were convinced that Tropical Depression Four was not a threat to the Gulf and sold off their morning futures bids. These storms are ALWAYS quite unpredictable. This morning it became a named storm, Dean. At 11AM it was projected to bend northward towards the East Coast. By the 5PM update it was projected to go south of Cuba towards the Gulf. ...And the price of Oil is rising.

Gold...Silver...lame. Actually the fact that the two were quite firm today relative to the "strength" in the US Dollar has to be somewhat heartening. The Gold stocks again succumbed to the nonsense on Wall Street. Jeez, I swear I heard some talking head telling us yesterday that the markets were now "back to normal" after the central banks flooded the world with "liquidity". LOL...I have a hunch it will be a long time coming before these markets resemble anything "normal" again. And the longer they're paralyzed, the better for both Gold and Silver. Patience people, patience...our time is close at hand. The mother of all short squeezes is closer at hand than many would have you believe.

It was a short squeeze in Precious Metals that began the week of August 7, 2005 that launched Gold through it's $450 Gold Cartel capping saga and launched it to the May 2006 high at $730. It IS going to happen again. This $500billion cash injection into the World Economy will see to that. $700 Gold will fall once again, and dem Rat Bastids will be set to the curb with the rest of the Wall Street trash.

Again the Dollar was up today on "false strength" created by an ECB/US Fed currency swap that has been knitted together in the hopes that it will snare the subprime contagion that has been loosed upon the World by the villainous greed mongers on Wall Street. Do you get the sense that the trap isn't working? This monster is bigger than ALL the central banks coffers combined. There are suggestions that this "derivative deathstar" has been pumped up to the tune of $500trillion. That's Trillion with a "T". The central banking clowns couldn't print money fast enough if they tried to buy that out. Folks, the US Economy is a meager $3trillion annually. ...Ain't gonna happen. Financial Armageddon is approaching at light speed...and Luke Greenspan is retired.

Wholesale Inflation Up Sharply in July - (AP) A big jump in energy costs pushed inflation at the wholesale level up sharply in July. However, outside of energy, price pressures were moderate.

LOL, "outside of Energy"... Give me a break. NOTHING and NO ONE is immune to rising Energy prices. The CPI numbers out Wed. morning should prove that.

Oh look! The trade deficit was $2billion less than the previous month. Let's have a party! Wake up dumb asses! The trade deficit was $58BILLION dollars...there is NOTHING good about that.

The Commerce Department, in a new report, said the U.S. trade deficit narrowed in June by 1.7%, suggesting the economy expanded around 4% or even higher in the second quarter, and will probably grow more than economists had thought in the third quarter.

The trade deficit shrank to $58.14 billion in June, the department said. A $9.4 billion surplus in the service sector offset a $67.5 billion deficit in goods trade. May's deficit was revised down by just under $1 billion.

Lies, Lies, and more lies. I am sick to death of all the lies. How does $9.4billion equal $67.5billion? Must be that American Math. I hear they use sub-prime numbers...

A close above 673 Gold should kick start an assault on the downtrend line at 682. Support at 663 then 658. There is too much uncertainty right now for there to be much downside risk in Gold. Silver is at Golds mercy, and it's 50 day moving average [now at 12.91 and falling]. Rising Oil prices should keep the metals firm this week. All the central bank hand outs have definitely put a floor under them. Should a hurricane ravage the refining capacity of the United States once again, it will take more than Fed handouts or an emergency interest rate cut to save the American Economy...much more. Unfortunately for us all, there is nothing more.

Save yourself! Buy Gold and Silver today!

Zzzzzzzzzzz... Same Story, Different Day

Euro-Zone Economy Slowed Sharply In 2Q
LONDON (Dow Jones)--The euro-zone economy slowed sharply in the second quarter of this year, growing at its weakest pace since the first three months of 2005.

Although surveys of business sentiment and measures of new orders suggest the economy may rebound in the third quarter, signs that the upswing that took hold last year may be running out of steam will increase the likelihood that the European Central Bank is nearing the end of a series of interest rate hikes that began in December 2005.

According to figures published Tuesday by the European Union's statistics agency Eurostat, gross domestic product in the 13 countries that comprise the euro zone expanded 0.3% from the first quarter and 2.5% from the second quarter of 2006.

Of course then the Euro tanks and the destitute US Dollar is the immediate beneficiary. That is until this mornings PPI numbers are released. These numbers should suck...or they may just be more US Government "magic" that declares inflation is benign. That would be a good thing though. If the magic shows soft inflation numbers the Fed would have more room to give the crybabies on Wall Street the interest rate cut they're wailing for. And in so doing clobber the Dollar and assist Gold in it's accent to the heavens. Hey, Gold Bugs are allowed to fantasize too.

Currency swap expected from Fed and ECB
Central banks are expected to continue intervening in the money markets on Monday in an effort to unblock the financial system after last week's turmoil.
Investors braced themselves for further turbulence and speculation is mounting that the

European Central Bank will seek to arrange a currency swap with the US Federal Reserve that would allow it to lend dollars to European banks struggling to meet short-term dollar funding needs.
Billions in dollar-denominated borrowing by European banks comes due in the next few days amid fears that US banks are unwilling to extend short-term credit to some of their European counterparts perceived to be vulnerable to the market turmoil.

The Fed is likely to be sympathetic to an ECB request for a currency swap since it would be seen as a helpful way of dealing with pressure on the overnight federal funds rate caused by European banks' thirst for dollars. It would be the first such arrangement between the world's two biggest central banks since 2001.

I assume this would explain Monday's "strength" in the US Dollar and thus Gold and Silver's "day of rest". If the above currency swap report is accurate, a "false demand" for Dollars by European Banks to cover their butts was propping the Dollar up yesterday. Combine that with the weak Euro Zone GDP numbers this morning and the Dollar once again has the "false hope" of avoiding the axeman awaiting it at USDX 80.

Fear of World Economic Armageddon appears to have put a floor under Gold at 658-60. The near term key for Gold now is to close above 673. The uptrend off of the June 26 low remains intact despite the challenge posed to it during last Thursday's and Friday's panic attack. This mornings PPI Report should get this stick out of the mud one way or the other this morning.

Silver... Silver is simply adrift. Nothing happens for the Silver Bulls until they regain firm control of Silver's 50 day moving average. Period.

Oil as expected has come to rest at it's 50 day moving average. I expect further risk to the downside to be minimal with SOLID support at 67. Hurricane Dean should be throttling up by Friday and threatening the East Coast. Oh joy. It was amusing to see Oils reaction Monday to NOAA weather reports concerning Tropical Depression Four. Oil rises on the news and then sells off as soon as the forecast eliminates the Gulf from the storms path. You have to be crazy to trade oil. Should a Hurricane enter the Gulf this summer Oil will hit $85. Even if it never makes landfall. You heard it hear first.

Sunday, August 12, 2007

The US Dollar : An I.O.U Nothing

Following a longer than expected gestation period, and daily denial that the economy had an economic time bomb in the oven, an economic crisis is born...

The Fed Primes The Pump
Lacking any Wall Street buyers for their mortgage loans, commercial banks are left to hold any mortgages they've made in the last few weeks on balance sheet, requiring funds and reserves against them. It's a similar dynamic to what is happening with Wall Street banks that committed to fund leveraged buyouts, only to have trouble selling those loans in the syndicated loan market--they have to hold them on balance sheet until the credit markets come back to life.

Banks are thus forced to go to the Fed for money to cover their funding and reserve requirements. It used to be considered bad form to have to tap the Fed's discount window, where rates are about one point over the federal funds rate, or 6.25%. But the Fed seemed to be signaling Friday that there is no stigma.

Gold will be the beneficiary of these MASSIVE liquidity injections. Gold was at $250 an ounce when money was last pumped into the system at this rate following 9/11. It has since risen 168%. Sadly, this current injection makes the 9/11 injection look like chump change. If Gold rose 168% from today's $670 an ounce price we would see Gold at $1795 an ounce. And that's a conservative guess...and I doubt it will take another 6 years to put in that 168% gain.

Behind the Subprime Crash
My rough calculation suggests that over the last two days the Federal Reserve has pumped in enough new reserves to increase the money supply by somewhere between 10% and 15%.

This is a stunning number. The money supply in a year rarely grows by 10%, for it to do so in 48 hours is mind-boggling. Yes, the Fed has come to the rescue by further pushing the dollar on the road to collapse. While most eyes are on the current mortgage crisis, the bigger danger is the potential collapse of the dollar on foreign exchange markets. The dollar has been slowly falling in value against most currencies for a while. It is at multi-decade lows in some cases. I have feared a further major collapse of the dollar even before the Fed's moves over the last two days.

The mortgage crisis will pass. The Fed will print its way out of this crisis. But, the dollar crisis is ahead and the Fed won't be able to print its way out of that since it's been Fed money printing that is the cause of the world being flooded with dollars.

Bob Chapman, The International Forecaster
Early Friday morning the latest figures we have are the ECB has injected over $300 billion into the Eurosystem and the Fed has injected $150 billion. We will have more concise numbers later. The Bank of Japan offered to throw in $8.45 billion, the Reserve bank of Australia $4.19 billion, Bank of Canada $1.4 billion and the Bank of Korea just said, “how much do you want?”

The bottom line is the ECB, the Fed and other central banks are flooding the world with money in Weimer fashion. Gold and silver can only go higher.


Goldman again reconfigured its commodity indexes that again lowered the weighting of gasoline, oil, so that is why gasoline has declined in price. The GSCI is changed every time the administration wants lower gas prices. This is rigging the market. They did the same thing a year ago.

What this massive central bank liquidity "injection" is telling the World Markets is that the "sub-prime woes" are not, and have not been, contained. The panic button was pushed last Thursday, and again on Friday. Anybody that believes this central bank "bandage" is going to fix this compound fracture of the World Economic System is a crack head. This bandage isn't going to fix ANYTHING, only delay the inevitable destruction of the US Dollar as the World's Reserve Currency.


Gold is on the launch pad. Friday's hard bounce at the open off the 658 low was a classic. Investors are quickly coming to the realization that Gold is NOT a risky is the ONLY investment. Gold has always been, and will continue to be a "safe-haven" in times of economic crisis. The Gold Cartel is running out of bullets, and the metal itself appears to be sizing up a new suit of armour.

Gold vaulted thru both 663 and 669 Friday before being "capped" once again by dem Rat Bastid Vermin of the COMEX. Resistance at 669 has now turned into support. Should Gold open this morning above 671, the Vermin may find themselves hard pressed to defend 682. 682 IS the line in the sand. I expect that over the next four weeks Gold will clear 682, test the old high of 730, pause to retest the 682 breakout and then vault through the fourth quarter towards $1000 by the Spring of 2008. Please click on the chart above for The Big Picture.

Near term Gold support rests at 663 and 658. Silver on Friday launched a strong bounce and cleared resistance at both 12.80 and 12.96 in the process. There were too few believers however, and at this hour we find Silver stuck back below 12.80 looking up. Silver's 50 day moving average sits at 12.94, and until we get a strong move through that 50 day, and a close above it, Silver is going nowhere. A solid breakout of Gold at 682 would most likely send Silver to within striking distance of 14 quickly. A breach of 700 Gold would give Silver the authority to seek 15 in short order. With the US Dollar about to fold up it's tent, we wait patiently to profit from it's demise.

Thursday, August 9, 2007

Three Blind Mice

Or, The Blind Leading The Blind.


Bush Confident of Market Recovery
Wednesday August 8, 8:16 pm ET By Jeannine Aversa, AP Economics Writer
President Bush Believes Stock Market Will Make a 'Soft Landing' From Recent Turbulence
WASHINGTON (AP) -- President Bush struck a reassuring tone Wednesday about recent turbulence on Wall Street, saying he believes the markets will work their way through the turmoil safely and achieve a "soft landing."

Bush, in his most extensive remarks on a gyrating stock market that has sent investors on a rollercoaster ride, expressed confidence that investors would eventually calm down. The president said he expects investors to reassess their risk and begin to focus more on the economy's fundamentals, which he said are solid and sound.

It's 5pm est. DOW -387, NASDAQ -56, S&P -44. A casual observer would have to conclude, Mr. President, that a market sear you are not. The economy's "fundamentals" are solid and sound? They're flimsy at best, and as solid as a handful of sand. The stock market has about as much chance as an egg hitting the floor of having a "soft landing". The President has spoken people...believe his lies at your own risk.

They all lie. Bernanke...he's the biggest liar of the lot. He continues to talk out of both sides of his mouth:

"...the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in employment and incomes and a robust global economy."

"Although the downside risks to growth have increased somewhat, the Committee's predominant policy concern remains the risk that inflation will fail to moderate as expected."

This from the text of the Fed Statement on Tuesday (you can read it here: ) There's a sucker born every minute, but this blah-blah is obvious hogwash. How can the economy grow, if growth risks have increased Ben? How damn it, how?

The risk that inflation will fail to moderate? Ben, you and your cronies continual printing of US Dollars out of thin air is what's causing inflation. How can it moderate if you're growing the money supply by 13% a month? Ben! Inflation has failed to, and will continue to fail to moderate. Ben, your credibility is and the Exchange Stabilization Fund have lost control of the markets you have attempted to manipulate since 9/11. The jig is up. Gold, the Truthsayer, is knocking on your door. And Gold is going to huff and puff and blow your house of cards down. Gold is going to expose your lies, Hank Paulson's lies, and George Bush's lies. The US Economy is on the brink of total collapse, and the Three Blind Mice just go on their merry way...whistling past the graveyard.

The lemmings ran away from their Gold and Silver investments today to avoid risk...fools the lot of 'em. The savvy investor once again swooped in to buy a little "wealth protection" at sale prices. Buyers lined up at Gold's 50 day moving average, and said "thank you very much" to those that parted company with their Precious Metals that are too risky to own. Silver got whacked, just because the paper pushing Vermin of the COMEX could whack it. There are shorts in Silver absolutely desperate to get out at a price. These dips are buying opportunities. They are noise in a market to those that comprehend The Big Picture. The fundamentals for owning Gold and Silver were only strengthened once again by today's news that a French Bank suspended three hedge funds with ties to the US subprime neutron bomb.

For a closer look at where we stand at this hour, please click on the charts above.

Tuesday, August 7, 2007

Recession On The Horizon?

My cable modem bit the dust last evening and closed my little window on the World. I could scream all I wanted to, but the cable store wouldn't be open until 9AM this morning. And now for more in the continuing saga of the Dissipating Economy of the USA...

Amusing to say the least. The Dow falls 260 points on Friday and rises 280 on Monday. Pathetic. Oil comes tumbling down on Monday on "speculation" that a weakening economy will weaken demand for Oil. I hate to point this out, but the rest of the world uses Oil too. And the demand for it across the globe is unlikely to shrink much in sympathy to the poor and despondent USA. The World Economy revolves less around the USA as each day passes. And besides, if the economy was going to get so weak, why was the Dow up 280 points? Clown in Colorado predicts one less hurricane in 2007. Yeah guess it's okay to sell all my Oil contracts and go whistling past the graveyard.

The destitute US Dollar takes another peak at the cliff below 80 on the USD Index. Crawls back from the ledge and looks over it's shoulder.

The 10-year Treasury Note, suddenly a "safe-haven" for those seeking safety from the chaos and carnage in the stock indexes is about to start taking on water very soon. The price of the10-year note has reached the downtrend line established off it's Spring 2005 high. Resistance there at the downtrend line and at the 38% retracement of that same high combined with resistance at the old, and broken, uptrendline off the July 2006 low spell SHORT OPPORTUNITY. OR outright sell call for the 10-year note.

Recession is not far off. And with recession, those fleeing stocks AND Treasuries will begin flocking to Gold and Silver in ever increasing numbers as growing investment demand drives gold higher in this "second phase" of Gold's secular Bull Run.

The Fed is about to speak. A hush falls across the boob tubes talking heads... Oh my, from green to red in a hurry.. Tune in tomorrow.

Sunday, August 5, 2007

The Day The Music Died

The Federal Reserve has lost control of the financial markets...

In the game of musical chairs, when the music stops, if you don't find a chair before all the others're out of the game. How many hedge funds are about to be caught without a seat as the music dies, and booted from the game? Not enough...

Friday August 3, 2007 my be looked back upon in history as the "Day The Music Died" for the US Dollar, the Dow, the US Economy, and hedge funds across the globe. Many will ask, "Who kicked the jukebox?" And the answer will be in chours, "Sam Molinaro, CFO of Bear Stearns."

Poor Sam. Forever labeled a traitor for simply uttering the truth. "The turmoil in the credit market is the worst I've seen in 22 years," said Sam Molinaro, CFO of Bear Stearns on Friday. Sam opened the door and shined a light on the all the cockroaches of the credit industry. The Big Lie, Dow 14,000, is now forced to deal with the truth.

It’s the Fundamentals Stupid By: Peter Schiff, Euro Pacific Capital, Inc.
Amid the recent stock market weakness, the pundits are virtually unanimous in their claims that good underlying economic fundamentals are being trumped by irrational fear. However, if investors understood just how bad the fundamentals for the U.S. economy really are, they would dump stocks even faster. So, contrary to the rhetoric, it is not that investors are being too fearful, but that they are being too complacent.

During the recent stock market rally investors ignored some very disturbing underlying economic fundamentals. Therefore, the current weakness in the market is not in conflict with the fundamentals, but completely consistent with them. Unfortunately for the overall economy, the re-assertion of fundamentals is not exclusive to the stock market. Here is a look at what will likely happen to other asset classes and our economy should investors refuse to blindly follow the Pied Pipers of Wall Street:

Down We Go Again

A good does of the truth in this report.

Crude prices fall on revised hurricane forecast
Crude oil prices declined on Friday as investors decided to take profits and as Colorado State University weather forecasters cut the number of hurricanes they expect in the Atlantic this year from nine down to eight overall, and reduced from five to four the number of major hurricanes they believe will form.

This is just one more example of how clueless and stoopid Oil Traders are. I told you weeks ago Oil could see 77.10 by Labor. We just hit 78.40 and it's ONLY August 5th. I live in Wilmington, North Carolina. Bulls eye for Hurricane Alley. Trust me, nobody around here is letting their guard down because some quack in land locked Colorado of all places is predicting there will be ONE less hurricane this year than he thought. LOOOOOOOOL, how absurd. Hurricane season is really just starting to gel...they're out there, lurking. Only a fool believes otherwise. Besides, it ONLY takes ONE hurricane to devastate the Oil refining industry of the gulf coast. Just One!
Nothing in the supply/demand fundamentals of Oil has changed because of this "news", has it?

Hiring Cools in July; Jobless Rate Up
WASHINGTON (AP) -- The nation's unemployment rate inched up to a six-month high of 4.6 percent in July as hiring simmered down. Workers' wages, meanwhile, grew modestly. Wall Street tumbled.

The latest snapshot of conditions around the country, released by the Labor Department Friday, showed that new job creation has slowed. Employers increased payrolls by 92,000 last month, down from 126,000 in June. It marked the fewest add-ons in a month since February.

"Although slightly lower than the previous month ... we still think of these as good, solid numbers," said Edward Lazear, chairman of the White House Council of Economic Advisers. The labor market, he said, has been a "shining beacon" even as the economy has made its way through a sluggish spell over the past year.

If this clown offers to share his drugs with you, please decline...this goof has lost his mind. With Economic Advisers this out of touch, we as a nation are certainly doomed. Only the Truthsayer, Gold, can save you now. "Save yourself! Buy Gold Now!"

From Bob Chapman, The International Forecaster
They simply couldn’t hold back the flood. The Dow fell 281 to 13,182 wiping out two days of contrived gains created by the Fed and the “Working Group on Financial Markets.” Using our formulas the S&P FELL 355 and the Nasdaq fell 388 Dow points. In the last hour it was a massacre.

Gold responded by rising $8.10 to $672.70 and silver jumped $0.14 to $13.09 to make Friday a great day. The pros have finally realized that the elitists’ attempts to control all markets is not working well anymore and that the Fed had not only been lying about inflation but they had no intention of trying to correct it.

We got what we wanted and asked for Friday morning. Gold not only moved thru 668, but 672 as well. Silver bulls have regained control of the metals 50 day moving average. Things are definitely beginning to look up for the precious metals now. The Dollar was crushed Friday and was DOWN 48 pips to close at 80.19. Should the Fed foolishly come to their hedge fund and banking buddies rescue with a rate cut on Tuesday, the Dollar will implode and Gold will be on it's way to the Moon.

Gold has been trading in a Rectangle pattern now since January 22, 2007. Bounded on the low side by Gold 640 and on the high side by Gold 690.

As defined at

Rectangles represent a trading range that pits the bulls against the bears. As the price nears support, buyers step in and push the price higher. As the price nears resistance, bears take over and force the price lower. Nimble traders sometimes play these bounces by buying near support and selling near resistance. One group (bulls or bears) will exhaust itself and a winner will emerge when there is a breakout. Again, it is important to remember that rectangles have a neutral bias. Even though clues can sometimes be gleaned from volume patterns, the actual price action depicts a market in conflict. Only until the price breaks above resistance or below support will it be clear which group has won the battle.

A breakout to the upside from this Rectangle at 690 projects to Gold 740. This is certainly realistic as the clouds over Wall Street darken. Couple this Gold projection with Silver's potential Reverse Head & Shoulders bottom and projected upside from a breakout there to 14.70 and the next several weeks in precious metals have the potential to enrich the faithful.