Tuesday, September 21, 2010

US FED VOTES TO INFLATE

Efforts by the CRIMEX Rat Bastids to rig the Precious Metals prices lower today, despite a mountain of fundamental reasons they should be climbing higher, were smashed by a bull stampede touched off by today's 2:15PM est Fed announcement. The bullion bank criminals had their bearish balls put into a vise and squeezed like apples in a cider press. It was an exquisite sight to behold.

Gold rose from a pre-Fed low of 1271 to touch 1290 in a matter of minutes. Silver did likewise, rising from day-long support at 20.55 to briefly breach $21 an ounce within an hour of the Fed announcement. The US Dollar precipitated these powerful moves in the precious metals by jumping off the cliff at 81 on the US Dollar Index and rapidly descending towards the tissue paper net at 80.

Should the US Dollar fall below 80 overnight, we could see complete chaos erupt in the currency markets tomorrow.

Fed signals it will take further steps if needed
Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- The Federal Reserve signaled Tuesday that it's worried about the weakness of the recovery and is ready to take further steps to boost the economy if needed.

Fed officials said they are also concerned that sluggish economic growth could prevent prices from rising at a healthy rate.

But at the end of its meeting, the Fed announced no new steps to try to rejuvenate the economy and drive down unemployment. Instead, it hinted that it's prepared to see if the economy can heal on its own.

Stock prices, which had been relatively flat before the Fed's statement, fluctuated before returning to about the same level in late-afternoon trading.

The meeting is the last for the Fed's chief policymaking group before the Nov. 2 midterm elections. It comes as voters are focused on the economy and the jobs crisis. Polls show they are likely to punish Democrats in Washington for the sluggish economy.

In its statement, the Fed used the same language it did in August to sketch a downbeat view of the economy. It concluded that economic activity has slowed in recent months. And it warned that the pace of growth is likely to be "modest in the near term" -- almost identical to the assessment it made a month ago.

But the Fed delivered a stronger signal that it would take new steps to lift the economy. The Fed said it is "prepared to provide additional accommodation." In its previous policy statements, the Fed didn't go that far. Instead, it had said it would "employ its policy tools as necessary."

The Fed made clear that given the economy's weakness, it's more concerned about prices falling than rising.

http://finance.yahoo.com/news/Fed-signals-it-will-take-apf-1578578684.html?x=0&sec=topStories&pos=8&asset=&ccode=

The Fed is concerned that prices may not be rising at a healthy rate? Do you need any more proof that our "great economic powerhouse" is nothing more than a perpetual inflation bubble machine? The Fed has guaranteed rising prices for years to give Americans, and the World, the illusion of a growing economy when in fact our economy is really nothing more than rising prices.

There has never been real growth in the economy since the Fed was created in 1913. The only real growth has been debt! The US Dollar never anything more than a promise to repay debt since 1971. The lie has been exposed. The TRUTH, Precious Metals, shall prevail and lay the lie that is fiat currency to rest. The Fed is dead...

Dollar Falls to Six-Week Low Versus Euro as Federal Reserve Offers to Ease Bloomberg
The dollar declined to a six-week low against the euro and slumped against the yen after the Federal Reserve said it's willing to ease monetary policy further to bolster the US economy.
Dollar Slides After Fed Statement Wall Street Journal
FOREX-Dollar sells off on Fed statement; euro at 6-wk high Reuters

Summers to Leave White House After Election
By Hans Nichols
Lawrence Summers plans to leave his job as director of the president’s National Economic Council and return to Harvard University at the end of the year, the administration announced.

“I will always be grateful that at a time of great peril for our country, a man of Larry’s brilliance, experience and judgment was willing to answer the call and lead our economic team,” President Barack Obama said in a statement. “He has helped guide us from the depths of the worst recession since the 1930s to renewed growth.”

Summers said in the White House statement that, while he will miss working in the administration, “I’m looking forward to returning to Harvard to teach and write about the economic fundamentals of job creation and stable finance as well as the integration of rising and developing countries into the global system.”

Since the end of July, Peter Orszag, director of the Office of Management and Budget, and Christina Romer, head of the Council of Economic Advisers, left the administration.

http://www.bloomberg.com/news/2010-09-21/summers-to-leave-as-head-of-obama-s-economic-council-to-return-to-harvard.html

And good riddance! Larry Summers is in large part responsible for today's global economic crisis. His tenure in the Clinton Administration laid the groundwork for today's crisis. It is also a fact that it is Larry Summers who is responsible for, and the director of, the US Government's Gold Price Suppression Scheme. Larry did little to guide us from the depths of recession as The Obama claims. If anything, he played a large part in plunging the country into the depths it now finds itself. The thought of him "teaching the fundamentals of job creation and stable finance" is ludicrous. The man is an absolute f*cking idiot. He should be put to death for his crimes against our country...perhaps in time, he will be arrested and brought to trial in front of an Economic War Crimes Tribunal...we can only hope. Larry Summer's resignation most likely signals that financial Armageddon has not been avoided, and is right now coming over the horizon. The fattest Rat Bastid has jumped ship.

Inflection point
Alasdair Macleod
The prospect of a marked deterioration in government finances can be expected to accelerate demand for gold, and indeed, as we approach the inflection point for government finances, gold is making new dollar highs on cue. It may have much catching up to do, since gold has barely reflected the monetary and credit inflation of fiat currencies since Bretton Woods, and arguably longer. But to simplistically link fiat-money inflation to the gold price is a side issue, since the gold price has been manipulated by governments seemingly for ever.

Modern gold manipulation and currency intervention have had a simple purpose: to facilitate the management of economies and their internal prices. Manipulation of gold prices has become a way of life for the central banks of the US, Europe and UK, together with the Bank of International Settlements and the IMF, who we can refer to collectively as the Cartel.

Over the years the Cartel has sold and leased large amounts of its gold. Some of this has been declared through official sales, but the quantity of leased gold can only be guessed at. There have been credible estimates of 5,000 to 10,000 tonnes of gold leased out by the Cartel since the 1980s, positions which are presumably still being rolled over when they become due. Analysts usually compare these figures to the 30,000 tonnes officially held by all central banks, but it is more relevant to compare them with the 21,000 tonnes declared by the Cartel, and the 2,500 tonnes mined annually.

However, the quantum is not as important as the likelihood that the Cartel is now ineffective. It is up against three basic factors: other powerful central banks have emerged as buyers of gold, such as China, Russia and India; free mine supply is contracting (especially when you take out Chinese and Russian production which is not made available to capitalist markets); and hoarding demand from virtually everywhere is accelerating, driven by pure fear. This is another inflection point, and the Cartel is now virtually powerless to stop it.

The bullion banks have worked with the Cartel for the last thirty years to feed leased gold into the markets in order to suppress prices. These actions have led to the development and maintenance of huge short positions in London and on the Comex futures market. In the past, the ready availability of leased gold from the central banks, coupled with newly mined supply, much of which was accelerated through forward sales, encouraged the bullion banks to run these large short positions. Those easy days are now gone, though market-makers and traders have not reduced their short positions to reflect this reality.

New leasing by the central banks, as opposed to roll-overs, can only be at nominal levels. The miners have unwound most of their forward sales and China and Russia are withholding their production from the markets. The short position in London through unallocated accounts[i] can only be guessed at, but judging by daily settlement volumes running at 530 tonnes per day, it could easily be several thousand tonnes[ii]. The short position on Comex has accumulated to about 900 tonnes. There is no possibility these positions can be covered easily at current prices, which means they have to be maintained.

This is suddenly important, give the deteriorating economic outlook. The inevitable and rapid deterioration in government finances will almost certainly trigger a new wave of demand for gold. This demand is not yet understood by those market professionals who assume that rising prices will generate sufficient supply from profit-takers. This is usually true in other markets, but the buyers of gold today are mostly hoarders, and hoarders tend to buy more on rising prices as their earlier fears appear to be vindicated. So the difficulty for those that want to put a lid on this market is that rising prices will lead to accelerating demand. Since government finances are close to an inflection point, so is the price of gold. As gold prices take off, those short positions in London and on Comex will bankrupt the bullion banks, and in the public mind at least, confirm the worthlessness of fiat currencies and the bankrupt state of governments themselves.

So gold’s move into new high ground is an extremely important event, and we are about to discover how much power this weakened Cartel actually possesses.

http://www.financeandeconomics.org/Articles%20archive/2010.09.21%20Inflection.htm

The Last Price Standing Of "True Money"[ABSOLUTE MUST READ]
By Bill Buckler
Ninety-seven percent of all existing Treasury debt has been created since August 15, 1971!

Ninety-three percent of it has been created since Mr Volcker “saved” the paper Dollar in late 1979!

Treasury debt is the ONLY backing the US Dollar has. Every bit of that debt rise is pure INFLATION.

Since 1982, the inflation has been reflected in serial credit-induced bubble markets. In the US, the last of the “market” bubbles, the real estate bubble, imploded more than three years ago. All that is left is the last of ALL the bubbles, the one in Treasury debt itself. That one is the very end of the road.

The Morbid Fear Of Falling Prices:

If there is anything that keeps central bankers all over the world awake at night, it is their fear of falling prices. This is taken for granted right across the spectrum of those who administer or rely upon the global fiat money economy with the paper US Dollar at its centre. It is a most interesting phenomenon, given the fact that ALL rational economic action since human beings descended from the trees has been aimed at LOWERING the cost of producing economic goods. It is surely an easily grasped FACT that in an economy based on indirect exchange through the use of money, all eras of true prosperity have been eras in which the purchasing power of money was GROWING and prices were therefore falling.

It really is a rather simple proposition, if one actually thinks it through. If a unit of money is to be viable over the longer term, the term essential for the build up of new wealth through new and improved means of production, that unit of money must retain or INCREASE its purchasing power. If it retains its purchasing power, it will allow people to save. If it increases its purchasing power, it will encourage them to save. From the simplest economic endeavour to the most complex one, savings must PRECEDE production which must in turn PRECEDE consumption. The only form of money which has ever been found to maintain and increase its purchasing power is the precious metals. The only form of money which has always been found to lose purchasing power to the end point of extinction is paper.

One of the distinguishing features of every productive economic era in history is that prices FELL throughout the era. Even in eras of capital consumption like the one which began in earnest in 1971, the most successful products were the ones which FELL in price despite the galloping depreciation of the money. The best example of that in the modern era has been the prices of computers and electronics. In the face of all these economic FACTS, why are central bankers so worried about falling prices?

Real Money Needs No “Collateral”:

Sound money needs nothing behind it to perform perfectly all the functions of money. Unsound money, especially paper money backed by nothing but debt to be paid by future generations, is TOTALLY dependent on the prices of the collateral being held against the debt which “backs” it. For forty years, the world has operated on a debt-based monetary system which is fuelled by means of credit creation. It stands or falls on the assumption that the debt upon which it is based will, someday, be repaid.

The only means to assess the worth of the (paper) collateral which is the underpinning to the monetary and financial system today is to look at the PRICE commanded by that collateral on the secondary markets. Any reduction in the price affects confidence in the future viability of the money. The bigger the price reduction, the more adversely confidence is affected. When central bankers and politicians talk about “deflation”, they are talking about a fall in the market value of the paper which underpins the money they issue. Any fall in that market value literally undermines the foundations of the system. They know it, most of their victims do not. All they know is that what used to “work” no longer does.

The US central bank, the Fed, prints the reserve currency. The US Treasury prints the debt paper which is the only “reserve” behind the US Dollar. That being so, the global demand for Treasury debt greatly exceeds the demand for any other type of “collateral”. That has allowed the US to go on living beyond its means for far longer than it otherwise would have found possible. The limits to this situation were revealed in March 2009 when the Fed began monetising Treasury debt and were underlined in August 2010 when the Fed resumed their task. No matter what, the “collateral” value must be maintained.

http://www.zerohedge.com/article/bill-buckler-discusses-last-price-standing-true-money-answers-only-question-relevant-gold-bu

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