Friday, May 6, 2011


"The once great nation of America is now a goat rodeo where the electorate is both confused and ignorant yet stubbornly believes itself otherwise. Adroitly ruled by corporate and banking elites whose deadly threat remains unrecognized, America today is bereft of leadership and options, a shadow of the nation intended by its founders."
 -Darryl Robert Schoon

Economy Adds 244,000 Jobs, Rate Ticks up to 9 Percent.- AP
Employers added more than 200,000 jobs in April for the third straight month, the biggest hiring spree in five years. But the unemployment rate rose to 9 percent in part because some people resumed looking for work.

And Santa Claus lives at the North Pole...

Funny, when the unemployment rate drops, they bury the notation that "people stopped looking for work" at the bottom of the story.  Never mind the fact that the REAL unemployment rate is 22%.  "Rate Ticks Up To 9 Percent", what a joke.

What a joke...  That is the theme of our missive today.

Does anybody find it a bit odd [it ain't funny] that since Monday, with the US Dollar up ONLY a pithy 2%, Silver is down 33%, Gold is down 7%, and Oil is down 16%?

US dollar soars as euro and commodities slump

Dollar Surges On Euro Purges, Commodities Trashed

Dollar soars against euro

US dollar soars as euro and commodities slump

A 2% dead cat bounce in the US Dollar, and it is reported as "soaring"?  The Wright Brothers were closer to soaring at Kitty Hawk than the US Dollar is to soaring today.  ...and the unemployment rate "ticked up to 9 percent" today.

What a joke...

To anybody that has been keeping score, Bumbling Ben's QE2 plan to "keep interest rates low, and save the economy" has been a dismal failure.  Interest rates have risen since QE2 began in November 2010.  The economy has begun to collapse again as GDP has fallen from 3.5% in Q410 to 1.9% in Q111.  Housing has officially double dipped.  Silver and Gold are at 31 year highs.  Oil prices are surging.  But Ben and the Fed can not be viewed as failures!  What would that do to confidence in the Con Game they manage?

And so, with the official "end" of QE2 fast approaching, the "appearance" of success MUST be shown to the public.  Unfortunately, that appearance of success will likely never see the headlines.  The damage associated with QE2 has either been done already, or is baked into a cake that is about to blow up in the faces of those that are in the kitchen at the Fed.

Bumbling Ben might publicly deny that his QE2 is to blame for rising inflation...that the effects of rising commodity prices is only "transitory".  Transitory?  Ben, why not just say "temporary"?  Is "transitory" supposed to make you look smart?  No one would believe you if you said the rise in prices will be "temporary"...far to blue collar.  But what common American would argue with "transitory"?  Hey this guy must know what he is talking about.  BULLSHIT!  "Transitory" is but one more effort by the Fed to obfuscate the truth.  I can use big words too Ben! 

Obfuscate: [ob-fuh-skeyt, ob-fuhs-keyt]
–verb (used with object), -cat·ed, -cat·ing.

1. to confuse, bewilder, or stupefy.

2. to make obscure or unclear: to obfuscate a problem with extraneous information.

3. to darken.

The Fed has made the 2008 Financial Crisis far worse today, than it was then.  Every communication from these "Fed Heads" is an attempt to "obscure" the TRUTH.  Our financial system is closer to collapse today than it was when the Congress was conned by Henry Paulson into funding TARP.  Silver at $50, and Gold at $1575 are screaming the TRUTH.  The Fed will do anything and everything to silence and/or obscure the TRUTH.

If the US Dollar does indeed collapse, and confidence in the financial system goes down the drain with the Dollar, what need do we have for the Federal Reserve?  IS it clear now why the Fed goes to such great lengths to obfuscate the TRUTH?

Maybe somebody at the Fed can explain to us how putting Silver on sale at 33% off is going to lessen demand for the Precious Metal?  Seriously!  If you need a new pair of jeans, do you wait for the price to go up, or do run run out and buy two pair when they are on sale 33% off?  I fail to see how "forcing" the price of Silver down is going to dry up demand for it. 

By bailing out JP Morgan from their colossal losses on the CRIMEX, the Chicago Mercantile Exchange [CME] has only exposed the TRUTH about the futures markets in New York...they are a fraud...a corrupt entity with US Government sanction.  JP Morgan was saved because JP Morgan IS the Fed.  Destroy JP Morgan, destroy the Fed.  Destroy the Fed and free our financial system from the shackles it now endures.
ONLY when the Fed is chased from existence will the economy and our financial system have any hope of recovery.

Collusion by Fed officials and Commodity Exchange heads has its intended effect
By Dan Norcini
The truth is that the exchanges are money hungry bastards that want the fees generated by the HFT crowd and do not want anyone to mess with their golden egg laying goose.

Regardless, this collusion on the part of the players involved has accomplished, for the time being only, what the Fed has been trying to do ever since it instituted its second round of QE, which by any standard of objective measurement, has failed. To wit - keep long term interest rates low to generate borrowing.

Unfortunately for the Fed, the bonds were not cooperating and were actually moving lower for a while as commodity prices were responding to the breakdown in the Dollar and holders of long term bonds were balking at hanging on to an "asset" that was priced in a collapsing currency while being threatened with a serious outbreak of inflation as a result of all the reckless money creation.

What could be done especially with the US Dollar within a mere point of crashing through a critical support level which would have seen the onset of a currency collapse and a resultant crisis?

Commodities Bubble Bursting? Not By a Long Shot: Pros
Four hikes in margin requirements in as many days have been cited for the precipitous drop in silver prices. But over a longer time frame, experienced traders say the opposite may prove true.

After the selling period abates, the rise in margins effectively will have cleared out the smaller players, leaving the trade the domain of deep pockets who could step in and drive prices still higher. Indeed, traders doubted whether enacting a similar margin squeeze in oil would help drive down prices as well.

"Actually we could see a parabolic move back to the upside," Lincoln Ellis, managing director of the Linn Group's Asset Management group, told CNBC. "With nobody else to sell to you could see a move right back up."

SILVER:  Realize that you are not trading in this market when the margin clerks are the ones determining the price action.

Silver’s Paper Driven Sell Off to Be Confronted by Continued Significant Physical Demand
Some nervous physical silver buyers and more speculative physical buyers have sold today and this week but those buying for diversification and financial insurance are strong hands and have not sold. Indeed, physical buying and buying the dip has continued yesterday and today.

Store of value, safe haven bullion buyers should hold their nerve and continue to accumulate and to maintain a core holding in gold and silver bullion. In the same way that the sharp falls from over $20/oz to below $10/oz in 2008 are now seen as a wonderful buying opportunity so this sell off will be seen as another buying opportunity.

Those who sell on this sell off and fail to reenter the market or maintain a core holding in gold and silver bullion will likely regret it in the coming months and years.

Lost in this weeks headlines of "surging Dollar" and "commodities bubbles bursting" was this little note from our Treasury Secretary to raise the debt ceiling by $2 TRILLION.  Excuse me?  How does raising the debt ceiling contribute to a strong US Dollar, let alone steer the Congress towards necessary spending cuts?  Does raising the debt ceiling $2 TRILLION make you want to sell your Silver and Gold and receive US Dollars in return?  LOOOOOOOOOOOOOOOL! 

What a joke...

Treasury suggests $2 trillion debt cap raise: sources
(Reuters) - The Treasury has told lawmakers a roughly $2 trillion rise in the legal limit on federal debt would be needed to ensure the government can keep borrowing through the 2012 presidential election, sources with knowledge of the discussions said.

Obama administration officials have repeatedly said that it is up to Congress to decide by how much the $14.3 trillion debt limit should be raised.

But when lawmakers asked how much of an increase would be needed to meet the government's obligations into early 2013, Treasury officials floated the $2 trillion working figure, Senate and administration sources told Reuters.

Gold and Silver Storm the Fed
By Darryl Robert Schoon

When the US could no longer convert its US dollar to gold in 1971 as required under the Bretton-Woods agreement, paper currencies everywhere became only government promises to pay. For the first time in history, all money became fiat.

Central banks rightfully became concerned that the value of their currencies, when no longer convertible to gold or silver, would loose value; and, indeed, that is what began to happen.

Governments everywhere began printing more and more money as gold no longer had to be exchanged for excess currencies held by other countries; and, of all the countries that abused the new found ability to do so, the US was the greatest transgressor.

This is why the US soon had the largest trade imbalance in the world. The US took advantage of the reserve currency status of the US dollar to begin buying more oil from the Middle East and more goods from Asia.

First Taiwan in the 1970s, then Japan in the 1980s, then China in the 1990s and 2000s found themselves with increasingly excessive amounts of US paper money. Lacking the need to exchange gold for its dollars, after 1971 the US went on a worldwide spending spree with its increasingly worthless US dollars; and, today, the rising price of gold and silver reflects the world’s growing unease with still growing US deficits in both its domestic budget and foreign trade.

Of the 21 trading days in April, the price of gold reached record highs on 15 of those days. The ascent of silver was even greater. Today’s acceleration of silver and gold is an indication that Fed’s attempts to continue central banking’s 300 year hegemony are failing.

Instead of being afraid of the future, Americans should be rejoicing.


Is the Fed engaged in fraud?

Does a bear sh*t in the woods?

Do hemorrhoids hurt?

That the Fed would engage in fraud to perpetrate the ponzi-scheme of which the Fed is the principal is not to be unexpected. The Fed is engaged in a fight to the finish, although the Fed does not yet know the end is far closer than believed.

What economists perceive as a series of unexpected exogenous shocks are instead the signs of systemic instability caused by the collapse of their debt-based paradigm. Bankers will be surprised when their control over the world’s wealth and resources ends along with the paper money that made it possible.

The bankers’ self-centered concern about the future is justified as the Fed is vulnerable as never before—and while this may be bad for the Fed, it will be good for the rest of us, especially America..

"Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment."

 -Alan Greenspan, 9 Sep 2009

Bernanke boxed in
But there is a crucial difference today compared with 30 years ago. The level of private sector debt is substantially higher, and shows a strong tendency towards contraction. High interest rates are not actually needed to reduce demand, because bank credit, which is the counterpart of private sector debt, has been contracting of its own accord. It is this that frightens the Fed most, because contracting bank balance sheets are very difficult to manage without risking a full-blown banking crisis.

So it is the difficulty of keeping the banking system running while there is credit deflation in the air that actually pre-occupies the Fed. This is more important than the official mandate of maintaining a low rate of inflation consistent with high employment. But by focusing on keeping the banking system solvent, the Fed is taking enormous risks with monetary inflation. The unprecedented growth in raw money, reflected in the increase of the monetary base since the Lehman Bros crisis, has been designed to offset the contraction of broader credit, and is deemed by the Fed to be non-inflationary overall.

Economists generally support this view, taking comfort from the build-up of bank deposits on the Fed’s balance sheet in the form of non-borrowed reserves. They argue that only when the banks draw down on these reserves to use as a base for further bank lending will the inflation risk escalate. But this argument ignores the fact that this money is already in circulation through government spending.


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