Friday, December 3, 2010

Smile Wryly, And BUY!

Today is non-farm payrolls Friday! And with that in mind we look at yesterday's Precious Metals markets:

With Gold knocking on $1400 and Silver at $29, the monthly Financial Farce of farces was once again initiated by our pathetic bankers operating their now uncovered price suppression scheme at the CRIMEX. A blind squirrel could see this nut cracking, but our taxpayer paid for government regulators at the CFTC remain out to lunch.

Doesn't anybody find it suspicious that the two monetary metals, Gold and Silver, are stopped dead in their tracks with momentum building as the US Dollar bear market rally peaks...While the Precious Metals Platinum and Palladium go screaming towards the heavens? This type of market action could ONLY happen if there was collusion among "well funded"market participants to stop Gold and Silver from moving higher. Coincidentally, this occurs on the eve of the December jobs report. Not to mention the "worse than expected" new claims for unemployment report released yesterday morning as the CRIMEX opened it's doors to another day of financial chicanery.

What's a Precious Metal's investor to do? Smile wryly, and buy. BUY, BUY, BUY! What a glorious time to be a Precious Metals investor. Not only are you participating in one of the greatest bull markets of ALL-TIME, but you have a front row seat to what will one day be referred to as the Greatest Comic Tragedy The Human Race Has Ever Seen.

Are these CRIMEX crooks really that stoopid? Every time they markdown the prices on Precious Metals, they are only digging their hole to financial hell deeper. Today, sale prices on Gold and Silver only increase demand from the public for the physical bullion these "short minded" banks need to save themselves from financial ruin. In effect, these CRIMEX goons hold a gun to their head, and too chicken to pull the trigger themselves, have offered the investing public to pull the trigger for them...and put them out of their misery. The Fed can print money until the end of time to save them, but doing so will only force the price of Precious Metals higher in spite of this stupid game of Russian Roulette.

Good or bad, "better than" or "worse than", the non-farm payrolls number today will be a lie. Ignore the lie, and BUY, BUY, BUY!

The Rules Of The Game Have Changed

‘Shock and Awe’ in Precious Metals[MUST READ]
Written by Jeff Nielson
If these manipulative buffoons had the slightest understanding of these markets, the spectacular failure of their attempt to (once again) “cap” precious metals would have come as no surprise. As I write regularly, anything under-priced (like precious metals) will be over-consumed. Push the price even lower, and inventories will disappear that much quicker.

The example I have used previously is chocolate bars. Price chocolate bars at 10 cents each (which was their price before 40 years of banker-produced inflation destroyed the value of our currency) and store shelves will be quickly stripped bare. Yet in the convoluted fantasy-world of the bullion banks, if they saw store shelves being cleaned-out with chocolate bars at 10 cents apiece, their “strategy” would be to attempt to kill demand by pricing them at 5 cents.

In previous years, the banksters could avoid being punished for their total ignorance of commodity fundamentals. Armed with countless tons of bullion which Western central banks had foolishly leased to them, when the cabal drove down precious metals prices and buyers stepped in to load-up, they would simply drive prices even lower (by dumping yet more bullion onto the market) – until even the most ardent bulls capitulated.

Those days are gone, because the bullion is gone. Today, when bullion prices are driven down, and buyers step in to buy, it is the bullion banks who are now forced to capitulate. Much like a thug who points a revolver at someone – after the sixth shot is fired – the banksters now frighten no one in the precious metals market.

In the case of silver, the only “gun” now pointing at anyone is the gun which the bullion bankers are holding against their own temple (with a “silver bullet” in the chamber). As regular readers know, most of the total global stockpiles of silver (accumulated over roughly 5,000 years) are now gone. Used-up (in tiny amounts) in an infinite number of consumer and industrial goods, that silver can now never be economically recovered – unless/until the price rises to many multiples of the current price. Put another way, with gold now priced at roughly 50 times the price of silver, at some point before silver reaches $1400/oz, it will finally become valuable enough that industrial users will take measures to recover this silver, much like virtually 100% of all gold is recovered/recycled.

At the present time, the only message being sent (by the bankers) to silver’s multitude of industrial users is “silver is cheap”. With the bankers ensuring that silver is grossly under-priced, industrial demand is predictably soaring – up 18% year-over-year.

Readers must realize that these industrial users can obviously never be “frightened off” by cheap silver, but instead will simply increase their buying (as they have done). Having gotten industrial users ‘addicted’ to cheap silver, it is now up to the bullion banks to produce enough real bullion to satisfy the rabid appetite for industrial silver – or face the consequences: their own economic annihilation.

“Short” 100’s of millions of ounces of silver, JP Morgan is already facing $billions in losses on that part of their holdings, alone. However, after squandering their bullion inventories, the banksters turned to the derivatives market to use paper leverage to continue to manipulate prices.

Thanks to the CPM Group’s Jeffrey Christian, we have a rough idea of precisely how leveraged is that short position: about 100:1. So when JP Morgan starts with $billions in losses, and leverages that 100:1, the bottom-line is bankruptcy. And the harder these knuckle-draggers push-down on the market (thinking they are limiting their losses), the sooner the last bar of silver is gone – and with it, JP Morgan.

Want JP Morgan to crash? Buy silver
The campaign to buy silver and force JP Morgan into bankruptcy could work, because of the liabilities accrued by its short-selling
Max Keiser
Here's how the campaign works: wealth tied to a fiat currency is easily overwhelmed by wealth tied to silver and gold. And the world is waking up to the fact that they have the ability, without government assistance or other interference, to create a new precious metals-based backed currency system by simply converting their fiat paper into real money.

This campaign has 100% chance of working; it falls into the category of a self-fulfilling prophecy. As more individuals buy silver and gold, all attempts to replenish the system with more paper money will only cause the purchasing power of the silver and gold to increase – thus prompting more people to buy more. Any attempts to bail out JP Morgan would have the same effect. If the US Fed was to flood the system with bailout money for JP Morgan to cover their silver short position (as they did after the collapse of Long-Term Capital Management), more inflation will ensue and the price of silver and gold will rise more, triggering more purchases. A virtuous circle is born.

If anyone is interested in helping to crash JP Morgan, buy silver. In the end, it's about transferring wealth back to the people from where it came.

Gold Imports by China Soar Almost Fivefold as Inflation Spurs Investment
China’s gold imports jumped almost fivefold in the first 10 months from the entire amount shipped in last year as concern about rising inflation increased its appeal as a store of value, said the Shanghai Gold Exchange.

Imports gained to 209 metric tons compared with 45 tons for all of 2009, Shen Xiangrong, chairman of the bourse, told a conference in Shanghai today. China, the world’s largest producer and second-biggest user, doesn’t regularly publish gold-trade figures and rarely comments on its reserves.

The precious metals power higher
By James Turk
December 1, 2010 – Both gold and silver demonstrated some spectacular performance yesterday, climbing 1.4% and 3.8% respectively from the previous day’s closing price. November is the eighth month that gold has risen this year to generate its 26.5% year-to-date appreciation. Silver has also risen eight months this year, and so far is up a stunning 67.5%.

We can reasonably expect some more big moves higher, given how tight the market for physical metal remains. Physical metal cannot be conjured out of thin air like national currencies and paper representations of gold and silver. Mine production cannot be turned on overnight to increase the supply of newly mined metal. It takes years to build a mine. So where is the supply going to come from to meet the ever-growing demand for these two precious metal safe havens in a world wracked by sovereign debt worries, volatile currencies, banks loaded with dodgy assets and politicians who are placing with their serial bailouts never-ending burdens on the backs of taxpayers?

There is only one source to meet this demand – the physical gold and silver must come from their already existing aboveground stock.

To achieve this end, higher prices are needed to entice holders to exchange the physical gold and silver they now hold to instead own a national currency. But will they be sufficiently enticed to sell? After all, the proceeds from their sale are on deposit in a bank, which like most banks is probably loaded with risky assets.

Further, in contrast to the safety of precious metals, their bank deposit has risks and earns near zero interest income, which clearly is not enough to offset the risks. The integrity of deposit insurance is questionable because the assurance is being provided by an overleveraged and insolvent government. In any case, their deposit is only guaranteed by the reality the bank will be bailed out with taxpayer money or newly printed currency created out of thin air by the central bank.

So ask yourself, are you willing to exchange your physical metal for dollars or euros or any other currency? I wouldn’t, and most people reading these reports understand that the metals remain undervalued, so they wouldn’t either. We are what the market calls “strong hands”.

I am often asked when it will be time to sell the gold and silver we are now accumulating as our savings to get us though the crisis as it continues to unfold in the years ahead. I always respond that the end of this bull market will not be like the one that ended in January 1980. When gold and silver eventually become overvalued at some future date, you won’t “sell” your metals; you will “spend” them.

In other words, I expect that because national currencies are being so badly mismanaged, many will collapse – including the dollar, which was the conclusion of The Collapse of the Dollar that I wrote with John Rubino in 2004. As a consequence of the dollar and many other national currencies collapsing, so little confidence thereafter will be placed in any government’s management of a currency that few if any national currencies will exist. This watershed event will mark the end of the world’s reckless experiment foolishly started in 1971with fiat currencies backed by nothing. With the inevitable failure of national currencies, gold and silver will be the currency of choice.

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