The Bronx Cheer - All Hail Pinocchio!

A quiet day in the Precious Metals, for the most part as traders awaited the "words" of the man behind the curtain. What more can he say that hasn't already been said? There will not be any rate increases, of that, most are certain. Much of the focus on Silver remains on the rollover out of the July futures ahead of first-notice day at the end of the month.

Nothing positive on the economic data front today. Were it not for the meddling PPT the stock market would have surely tipped into its long awaited death spiral by now. But we could not have that occur in the hours leading up to the "words" from the great Oracle of Lies, Bumbling Ben Bernanke.

When are investors going to wake up to the TRUTH? Nothing this Pinocchio says is going to change, fix, or bandage anything anymore. The "institution" he overseas has lost ALL control. The more Bumbling Ben and Pals try to fix things, the worse things are going to get. The "other shoe" is dropping on the banking industry, and inflation is fueled and on the launch pad. The banks are going down, and inflation is going up. The Fed is powerless to stop either. Their brazen efforts to stop the accent of the Precious Metals are about to become wasted effort. Gold has been circling the Moon for three months now. Many thought it would never "go to the Moon". It has, and it has no intention of returning to Earth. Gold has simply been refueling and is now on trajectory for "infinity and beyond." Circle this date on your calendar: July 3. The ECB meets for their next rate decision. Should Trichet and friends raise Eurozone interest rates that day, there could be plenty of fireworks in the Precious Metal Markets July 4 as the NY COMEX will be closed that day. Could Gold regain it's freedom on Independence Day?


US Economy: Consumer Confidence, House Prices Slide (Update1)
June 24 (Bloomberg) -- Confidence among Americans dropped to the lowest level in 16 years and house prices fell the most on record, raising the risk that consumers will cut back on purchases after spending their tax rebates.

The Conference Board's confidence index fell to 50.4 in June, lower than forecast, from 58.1 in May. Home prices in 20 cities dropped 15.3 percent in April from a year earlier, according to S&P/Case-Shiller, the most since the group began collecting data.
Consumers, whose spending accounts for more than two thirds of gross domestic product, are being hurt by the housing slump, rising unemployment and higher food and fuel bills.

``We've seen this dive in confidence in the last two months at the same time these stimulus checks'' have been mailed, Chris Low, chief economist at FTN Financial in New York, said in a Bloomberg Television interview. ``It tells me if we see this pop in spending, it's not going to last.''


Corporate Profits Seen Off More Than 10 Percent
NEW YORK (Reuters) - The U.S. corporate profit outlook is deteriorating rapidly, with S&P 500 earnings for the second quarter now seen falling at a double-digit pace from a year earlier, according to Thomson Reuters Proprietary Research released on Tuesday.

Second quarter profits are expected to fall at a rate of 10.2 percent, compared with the Monday estimate for a drop of 9.6 percent. At the end of May, analysts expected a 7.3 percent drop.

A worsening outlook for consumer discretionary and financials was behind the bleaker earnings view.


Status Quo-oh
A catastrophe for Iowa farmers will not be just a catastrophe for Midwestern Americans. In the Iowa floods, we'll see more evidence of how the problems of weird weather (climate change) combine and ramify the problems associated with peak oil. In this particular case they lead to an inflection point sometime around the 2008 harvest season, which will also be our time of political harvest.

These are not your daddy's or granddaddy's floods. These are 500-year floods, events not seen before non-Indian people starting living out on that stretch of the North American prairie. The vast majority of home-owners in Eastern Iowa did not have flood insurance because the likelihood of being affected above the 500-year-line was so miniscule -- their insurance agents actually advised them against getting it. The personal ruin out there will be comprehensive and profound, a wet version of the 1930s Dust Bowl, with families facing total loss and perhaps migrating elsewhere in the nation because they have no home to go back to.

Iowa in 2008 will be an even slower-motion disaster than Hurricane Katrina in 2005. Beyond the troubles of 25,000 people who have lost all their material possessions is a world whose grain reserves stand at record lows. The crop losses in Iowa will aggravate what is already a pretty dire situation. So far, the US Public has experienced the world grain situation mainly in higher supermarket prices. Cheap corn is behind the magic of the American processed food industry -- all those pizza pockets and juicy-juice boxes that frantic Americans resort to because they have no time between two jobs and family-chauffeur duties to actually cook (note: reheating is not cooking).
- James Howard Kunstler
http://209.157.64.200/focus/f-news/2032084/posts


Europe's big central banks seem to have lost their appetite for selling Gold today...
THE UNDERLYING PRINCIPLES of the Central Bank Gold Agreement laid out the attitude of European central banks towards gold, writes Julian Phillips of Gold Forecaster.

The agreements started as the Euro entered the foreign exchange markets for the first time in 1999. And all central banks prefer paper money to Gold because of the control it gives the bank over money.

Gold has a habit of undermining the credibility of paper money, as it reflects poor money management in falling values of the paper, as a result of this control. So it was almost incumbent on the European central banks – and their new headquarters and masters at the European Central Bank (ECB) in Frankfurt, Germany – to support the new Euro and frown on the monetary role of gold.

They were not so inclined, however, to frown on its value as a reserve asset. This function can be supportive of a paper currency and a nation in times of crisis.

Now the Euro has been established as an international and particularly European currency, there was no need to frown upon Gold any more. In fact, it is clear that the secondary role of gold as a "reserve asset" should be supported.
http://goldnews.bullionvault.com/gold_central_bank_agreement_cbga_imf_062320084