Thursday, January 21, 2010

The Story Of Paper Gold And The BIC Lighter



There is Bullshit, and there is Absolute Bullshit. What we have witnessed in the Gold and Silver Markets over the past 48 hours has been nothing short of pure ABSOLUTE BULLSHIT.

I'm not going to cry about it, and neither should you. Facts are facts, and the fact is the Gold and Silver markets are rigged. If you ever needed proof, look no further than the performance of these "markets" over the past 24 hours.

Not since the Bear Stearns bailout in March of 2008, have these two Precious Metal markets behaved as irrationally as they have over the past two days. Gold should have made it halfway to the Moon then, and it should be half way there now.

The technical breakouts that occurred this past Tuesday were legitimate and warranted. Is it a coincidence that the wheels began to come off the Obama Carnival on Tuesday evening, and the "sudden" reversal in the Precious Metals the following morning n New York? Hardly!

Gold is a barometer. It measures many things, chiefly Inflation. It is also a measure of rising uncertainty and turmoil in the markets, in geopolitics, and in Washington, DC. In the past Gold has always risen in times of doubt and fear. Rising Gold was a signal to "run for cover", "seek shelter from the storm", and "protect yourself". But not anymore...

Every time there is a crisis now, the banking cartel leans on the Precious Metals, and pulls the plug on them. "The canary in the coal mine mustn't sing." As if silencing Gold was going to avert the panic... "Oh look, Gold is falling, this must be a false alarm." Do the clowns really believe people are that naive, that stupid?

If Greece was really about to default, and the Euro was about to join the Buffalo on the great prairie in the sky, do you really think Europeans would dump their Gold en mass and buy US Dollars to save themselves? Not likely, but we are being led to believe that they are.

China reports a 4th quarter GDP this morning of 10.6%...annual GDP above 8%. The Chinese central bank deems the country's growth profile to be accelerating too fast, they make the wise decision to raise their interest rates FRACTIONALLY to PROTECT their countrymen and their currency from inflation. Do you think every Chinese is running to his local bank to dump his Gold because his country is so successful economically? Not likely, but that is what we are being led to believe.

The Chinese are facing an inflation "event". The Euro zone is facing a monetary crisis. Aren't inflation and monetary crisis two of the biggest reasons to buy and hold Gold? Then why are they selling their Gold? BECAUSE THE ARE NOT SELLING THEIR GOLD! As a matter of fact, nobody is selling their Gold...REAL Gold that is.

The only Gold that has been sold the past 48 hours has been fake paper Gold. The kind they manufacture on the CRIMEX in NEW YORK CITY. New York City: THE CAPITOL OF FINANCIAL CRIME.

Look at the chart posted above courtesy of Kitco.com. Focus on the Red line, and the Green line. The red line is the price of Gold on Wednesday, the Green line is the price of Gold today. The bottom of the chart has listed the various time zones that Gold trades in daily. It is beyond obvious that the ONLY time frame that saw ANY SIGNIFICANT selling [falling prices] was during the time frame labeled New York NYMEX [aka The CRIMEX].

"Now isn't that special."

There is a supposed "potential" currency crisis in Europe, and a REAL threat of Inflation in China. The Europeans and the Chinese appear to be holding onto their Gold, yet the Americans sell it as if it were radioactive. Either Americans are the dumbest inhabitants of the planet, or they know something the rest of the World doesn't know about Gold.

I don't know about you, but I'm pretty certain that the rest of the World knows a whole lot more about Gold than the Americans do. Not only does the rest of the World know the TRUTH about Gold, but they know the Americans don't have any...and that the Americans will do anything they can to prevent the rest of the World from profiting from this knowledge.

You see, Gold is the anti-Dollar. The World knows this now. The Americans just don't know that the rest of the World knows this now. They will soon enough. For it is the anti-Dollar that is about to crush the paper Dollar, and burn down it's house of paper Gold.

DO NOT BE DUPED BY THE STUPID AMERICANS. Hold onto your Gold as if your life depended on it...it just might one day soon. The price of Gold in Dollars will be meaningless when Dollars are no longer accepted for payment.

Russia’s Central Bank Boosts Gold Holdings 4.1% in Month
Jan. 21 (Bloomberg) -- Russia’s central bank addded 800,000 troy ounces of gold to its reserves last month, increasing its holdings of the metal in dollar terms to $22.4 billion as of Jan. 1, Bank Rossii said on its Web site.

The bank’s gold reserves climbed to 20.5 million ounces from 19.7 million the previous month.
http://www.bloomberg.com/apps/news?pid=20601012&sid=af8ronprmsBE

GOLD POSITIVE.

Russia moves into Canadian dollars
Russia’s central bank announced on Wednesday it had started buying Canadian dollars and securities in a bid to diversify its forex reserves. Analysts said the move could herald growing diversification of emerging market central bank assets away from the dollar and into other commodity-linked currencies and assets, such as the Australian dollar. Russia’s forex reserves, the world’s third largest, stood at $439bn in December and were evenly split between dollars and euros.
http://ftalphaville.ft.com/blog/2010/01/21/130766/russia-moves-into-canadian-dollars/

DOLLAR NEGATIVE.

New jobless claims unexpectedly rise, more people receive extended benefits
WASHINGTON (AP) -- A surprising jump in first-time claims for unemployment aid sent a painful reminder Thursday that jobs remain scarce six months into the economic recovery.

The surge in last week's claims deflated hopes among some analysts that the economy would produce a net gain in jobs in January and help fuel the recovery.

In its report on jobless claims, the Labor Department said initial claims for unemployment aid rose by 36,000 to a seasonally adjusted 482,000. Wall Street economists had expected a small drop, according to Thomson Reuters.The four-week average, which smooths fluctuations, rose for the first time since August, to 448,250.

The Labor Department report said the number of people continuing to claim regular benefits dropped slightly to just under 4.6 million. The continuing claims data lags behind initial claims by a week.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits customarily provided by states and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

More than 5.9 million people received extended benefits in the week that ended Jan. 2, the latest period for which data are available. That's an increase of more than 600,000 from the previous week. The data for emergency benefits lags behind initial claims by two weeks.

The rising number of people claiming extended unemployment insurance indicates that even as layoffs are declining, hiring hasn't picked up. That leaves people out of work for longer periods.

http://finance.yahoo.com/news/Rise-in-jobless-claims-apf-3027105474.html?x=0

DOLLAR NEGATIVE.

Democrats propose $1.9T increase in debt limit
Senate Democrats on Wednesday proposed allowing the federal government to borrow an additional $1.9 trillion to pay its bills, a record increase that would permit the national debt to reach $14.3 trillion.

The unpopular legislation is needed to allow the federal government to issue bonds to fund programs and prevent a first-time default on obligations. It promises to be a challenging debate for Democrats, who, as the party in power, hold the responsibility for passing the legislation.

It's hardly the debate Democrats want or need in the wake of Sen.-elect Scott Brown's victory in Massachusetts. Arguing over the debt limit provides a forum for Republicans to blame Democrats for rising deficits and spiraling debt, even though responsibility for the government's financial straits can be shared by both political parties.

The measure came to the floor under rules requiring 60 votes to pass. That's an unprecedented step that could mean that every Democrat, no matter how politically endangered, may have to vote for it next week before Brown takes office and Democrats lose their 60-vote majority.

Democratic leaders are also worried that Sen. Evan Bayh, D-Ind., who opposed the debt limit increase approved last month, will vote against the measure.

The record increase in the so-called debt limit is required because the budget deficit has spiraled out of control in the wake of a recession that cut tax revenues, the Wall Street bailout, and increased spending by the Democratic-controlled Congress. Last year's deficit hit a phenomenal $1.4 trillion, and the current year's deficit promises to be as high or higher.

Congress has never failed to increase the borrowing limit.

"We have gone to the restaurant. We have eaten the meal. Now the only question is whether we will pay the check," said Finance Committee Chairman Max Baucus, D-Mont. "We simply must do so."

A White House policy statement said the increase "is critically important to make sure that financing of federal government operations can continue without interruption and that the creditworthiness of the United States is not called into question."

http://www.businessweek.com/ap/financialnews/D9DBP30G3.htm

As DOLLAR NEGATIVE as it gets.

U.S. commercial paper market shrinks in week
NEW YORK, Jan 21 (Reuters) - The U.S. commercial paper market contracted in the latest week, Federal Reserve data showed on Thursday, hinting at a still fragile economic recovery.

Businesses use short-term borrowing to finance restocking of shelves and pay salaries, so any sustained increase in issuance would indicate the U.S. economy is continuing to grow, albeit anemically.

Yet analysts said this latest week's data is inconclusive and does not suggest a definitive trend in the commercial paper market.

For the week ended Jan. 20, the size of the U.S. commercial paper market, a vital source of short-term funding for companies' day-to-day operations, fell by $10.0 billion to $1.092 trillion outstanding from $1.102 trillion a week earlier.

The market is about half its peak size in August 2007 when the credit crisis started.

http://www.reuters.com/article/idUSN2121587720100121

Yep, DOLLAR NEGATIVE.

Philly Fed factory index falls in January
NEW YORK (Reuters) - Factory activity slowed more than expected in the U.S. Mid-Atlantic region in January, paring expectations of manufacturing's role in helping a U.S. economic recovery, a survey showed on Thursday.

The Philadelphia Federal Reserve Bank said its business activity index slipped to 15.2 from 22.5 in December, which was a 4-1/2-year high.

Analysts polled by Reuters had expected a January reading of 18.0.

Any reading above zero indicates growth in the region's manufacturing sector.

The survey covers factories in a region encompassing eastern Pennsylvania, southern New Jersey and Delaware and is looked at closely as one of the first indicators of the health of the U.S. manufacturing sector.

http://www.washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012101759.html

Oops, more DOLLAR NEGATIVE.

Funny, all this Dollar negative news and the Dollar keeps it's bid all day, and Gold falls like a stone in the ocean. Need more proof the Precious metal markets are rigged? Hey, it's out there...

The Dollar appeared to have hit a wall this morning after a very brief burst above 78.50. It's no secret that this "Dollar Rally" is being faded by the pros in the futures markets. When the hot air holding it up begins to cool, watch for a quick reversal in the Dollars fortunes and a panic back into Gold.

Bill Holter had some insightful comments at Le Metropole on the Republic victory in Massachusetts Tuesday:

To all; the big news today is the Republican win in Massachusetts. No more super majority (the ability to ram legislation down our throats) and at least SOME debate on legislation. As you may have heard over the weekend, Jim Cramer forecast a rip roaring stock market rally with a Republican win. Oh well you can't win 'em all and theoretically he made this one without inside information. What we did get is a rip roaring Dollar rally which has been perceived as equity bearish for the last couple of years.

The thinking goes that spending will be curtailed and is Dollar bullish. Can this move higher continue? Of course but not on a sustained basis in my opinion. I believe the Dollar cake has already been baked and is in jeopardy of catching on fire! It does not matter whether or not the most fiscally responsible people in the world assumed all of the government posts as once a barrel goes over Niagara Falls there is no retrieving it until it hits bottom. In other words, we are bankrupt because of past spending and debt which will not go away without a devaluation.

2010 will be the year where past spin is proven completely wrong and should display itself in much much lower stock prices. As you already know mortgage resets and rolls are a giant bulge in the python coming our way and will need to be addressed this year. As I have mentioned for the last several weeks it feels to me like another deflationary breeze is gathering strength and debt is NOT where you want to be. The Shakespeare quote "neither a borrower nor a lender be" is so fitting for where we are today because if you borrow you may lose your asset and as a lender you have counterparty risk which cannot be gaged in this environment.

Remember, Dollars and all other fiat monies are "debt created" and are nothing more than IOU's. While you do want enough cash to spend until it becomes "unspendable", a large cash position is asking for trouble if it is not at least equaled by a metals position. The dangers of "out of control events" are as high today as they have ever been and complacency is running very high! I plan to write more about fraud in the next couple of days as I believe this may very well be what pushes the ultimate panic button. The fact that The Fed is under further attack is very important in my opinion and will probably expose fraud or at a minimum shady dealings. The stars are not aligning well to say the least! Regards, Bill H.


Nice summation Bill!

The Great American Gold Sale continues, while supplies last!

Is the SLV leasing Silver to the CRIMEX and the LBMA in an effort to stem a default? Something smells fishy....

1 comment:

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