Tuesday, September 18, 2007

Thanks For The Meds Ben...

"It's time to take your medicine." And so the Fed today delivered a double dose of medicine. A 50 point cut in both it's Discount Rate AND the Fed Funds Rate. They were dancing on Wall Street. Little did the party goers realize that this medicine is really too little too late...the patient is terminal. This medicine mainlined to the patient by the Fed will only serve to mask the pain...briefly. For Gold and Silver investors today's medicine was just what the doctor ordered.

Investors will soon realise that the sub-prime crisis is simply the catalyst of a much wider breakdown, similar to the cigarette butt carelessly tossed from the car window that sets the entire forest on fire.

This is not a sub-prime crisis. Sub-prime has merely exposed the bigger scam of structured finance and over the counter credit and default derivatives; a scam that is about pretending that bad credit is good credit; a scam perpetrated by the shadow banking system innocently referred to as hedge funds.

The Fed did their best today to mask their panic as they caved into the demands of the crooks on Wall Street. This 50/50 cut they tossed out was much more than a bone...more like a Hail Mary pass to stave off defeat in the big game. The Fed is desperate, they did not want to do this, but what choice do they have? There's only one way out of this mess that they stood by and all but encouraged...spend your way out of it. And it's going to cost each and every one of us in America dearly.

The Dollar heard only one thing today at 2:15PM est. and that was the sound of a toilet flushing. Like the dead fish that it is, the US Dollar today was buried the old fashioned way. So long, it was nice knowing ya...

I had the misfortune today of coming across Larry Kudlow's evening program on CNBC. Look up idiot in the dictionary, and I guarantee this man's picture is right there next to the definition. Is it true that Larry worked his way thru the Perma Bull School of Economics in the late 60s as Bozo The Clown? Seriously, he sat there smug and patronizing, and proceeded to tell anybody that would listen that today's Fed cuts would NOT lead to inflation. Larry, what are you smoking? Please! DO NOT share that stuff! Anybody that believes today's fed actions will not lead to massive inflation down the road has got to be way too high.

The Fed's panic may have not been obvious to the casual observer today, but the panic buying in the markets following the Fed's announcement couldn't be missed. The hedge funds, short stocks in every market on Wall Street looking to take advantage of the "sell the news" crowd and recoup some of their many recent losses, were SHOCKED by the 50/50 cut and found themselves in a massive short squeeze, faced with a sellers strike, and forced to bid up stocks in a panic to cover their sorry asses.

The panic buying could not have been more obvious than it was in the Gold market. Shortly after the Fed announcement this alert appeared on the Kitco.com quotes page:

IMPORTANT:Due to technical difficulties Gold pricing being displayed is incorrect. We will not be able to honor any orders at this time. We are currently working on the issue and anticipate resolution shortly. We apologize for the inconvenience and appreciate your patience.

Over at the COMEX dem Rat Bastids were trampling all over each other in an effort to find the exit and cover their foolish shorts they put on all morning in the hopes that the Gold market would "sell the news". Gold hit 726.90 in minutes, up over $10 an ounce in the aftermarket as the Vermin got a much deserved ass kickin'.

In the Forex pits the Dollar got scalped and the Euro bulked up to new all-time highs vs. the piece of dookie. The Dollar sits just off the 79 handle as I type this at midnight.

Gold is quickly approaching the 735 target, estimated as the measured move from it's breakout at 688. Options expiration is Friday. Gold is fueled up and ready to break orbit for it's trip to the Moon. Silver is ready to tag along for the ride. The short squeeze can only take us so far. An influx of real investors wait in the wings seeking a safe haven to insure their wealth. It is on the faith of these desperate investors that we shall ride Gold and Silver to the promised land on the edges of the Solar System.

Thanks for the meds Ben...