Wednesday, July 20, 2011

It is almost comical now, these CRIMEX raids.

On yesterday's Silver chart posting, I noted the following:

"A dip back towards the low/mid $39s would be a great reward, buy it.  The $38s would seem unlikely now, but back up the truck if so lucky."

I hope your trucks are full!

With Gold stalled at $1600 yesterday morning, and Silver at $40 it seemed likely a dip would develop.  Who knew that a coordinated bear raid by our government funded heroes on the CRIMEX would appear?  The "news" that a debt ceiling deal was near just as the CRIMEX closed up shop for the day offered our "unregulated" banking criminals the opportunity to work their black magic in the NY Globex market and assault the Precious Metals to celebrate the promise of an economy saving debt ceiling deal.

Another farce it would appear.

I really don't understand the equity market euphoria regarding any "settlement" of the debt ceiling debate.  I stand by my comments in my blog post August 2, 2011 is financial system D-day :

"August 2, 2011 is financial system D-day. Raise the debt ceiling, and the US Dollar implodes. Fail to raise the debt ceiling, and the US Dollar implodes. The countdown has begun.



It's The Debt, Stupid."

Jim Sinclair said it best on his JSMineSet page this afternoon:

"The idea that an increase in the debt ceiling is a solution to anything is nonsense. The event would be simply a can kick forward for a very short period of time. Increasing debt is not a solution to a debt problem. It actually makes the problem worse. It is an act of extending your Federal credit card borrowing line so you can use it to pay your mortgage.



Calling increasing the debt ceiling a solution to a debt problem is too stupid to be stupid."

It has been expected that a debt ceiling settlement announcement will be hailed as the "next saving grace for our economy".  Quite unlikely.  We will be told that this "deal" will stave off an Aug. 2 deadline to avoid a default that Treasury Secretary Timothy Geithner and other experts warn would shake the markets, drive up interest rates and threaten to take the country back into a recession.  BULLSHIT!

Just as the Great Obama assured the nation that his $850 BILLION stimulus program in the Spring of 2009 would help keep the unemployment rate below 8% [as it subsequently rose to over 10%], the raising of the debt ceiling will fail to avert another recession.  Of course, as we slip back into a recession [in the middle of a Depression that Mr. Obama claims we avoided with his grand $850 BILLION Stimulus] who and/or what will get the blame?  George Bush?

But I digress...  We will be told by the politicians and assured by the media that the debt ceiling deal will fix everything.  Stocks will soar, Gold and Silver will fall, and the bond market will continue to "just sail along".  I have a hunch yesterday was proof that great expectations for the debt ceiling deal will be quickly squashed as the realization quickly sets in that more debt in an economy drowning in debt is NOT A GOOD THING.  It's a very bad thing.

Congressman Ron Paul summed up the debt ceiling debate rather eloquently before the house voted on their ill fated Cut, Cap and Balance Act yesterday:

Mr. Speaker, I rise to speak against HR 2560, the Cut, Cap, and Balance Act. This bill only serves to sanction the status quo by putting forth a $1 trillion budget deficit and authorizing a $2.4 trillion increase in the debt limit.


When I say this bill sanctions the status quo, I mean it quite literally.


First, it purports to eventually balance the budget without cutting military spending, Social Security, or Medicare. This is impossible. These three budget items already cost nearly $1 trillion apiece annually. This means we can cut every other area of federal spending to zero and still have a $3 trillion budget. Since annual federal tax revenues almost certainly will not exceed $2.5 trillion for several years, this Act cannot balance the budget under any plausible scenario.


Second, it further entrenches the ludicrous beltway concept of discretionary vs. nondiscretionary spending. America faces a fiscal crisis, and we must seize the opportunity once and for all to slay Washington's sacred cows-- including defense contractors and entitlements. All spending must be deemed discretionary and reexamined by Congress each year. To allow otherwise is pure cowardice.


Third, the Act applies the nonsensical narrative about a "Global War on Terror" to justify exceptions to its spending caps. Since this war is undeclared, has no definite enemies, no clear objectives, and no metric to determine victory, it is by definition endless. Congress will never balance the budget until we reject the concept of endless wars.


Finally, and most egregiously, this Act ignores the real issue: total spending by government. As Milton Friedman famously argued, what we really need is a constitutional amendment to limit taxes and spending, not simply to balance the budget. What we need is a dramatically smaller federal government; if we achieve this a balanced budget will take care of itself.


We do need to cut spending, and by a significant amount. Going back to 2008 levels of spending is not enough. We need to cut back at least to where spending was a decade ago. A recent news article stated that we pay 35 percent more for our military today than we did 10 years ago, for the exact same capabilities. The same could be said for the rest of the government. Why has our budget doubled in 10 years? This country doesn't have double the population, or double the land area, or double anything that would require the federal government to grow by such an obscene amount.


We need to cap spending, and then continue decreasing that cap so that the federal government grows smaller and smaller. Allowing government to spend up to a certain percentage of GDP is insufficient. It doesn't matter that the recent historical average of government outlays is 18 percent of GDP, because in recent history the government has way overstepped its constitutional mandates. All we need to know about spending caps is that they need to decrease year after year.


We need to balance the budget, but a balanced budget amendment by itself will not do the trick. A $4 trillion balanced budget is most certainly worse than a $2 trillion unbalanced budget. Again, we should focus on the total size of the budget more than outlays vs. revenues.


What we have been asked to do here is support a budget that only cuts relative to the President's proposed budget. It still maintains a $1 trillion budget deficit for FY 2012, and spends even more money over the next 10 years than the Paul Ryan budget which already passed the House.


By capping spending at a certain constant percentage of GDP, it allows for federal spending to continue to grow. Tying spending to GDP creates an incentive to manipulate the GDP figure, especially since the bill delegates the calculation of this figure to the Office of Management and Budget, an agency which is responsible to the President and not to Congress. In the worst case, it would even reward further inflation of the money supply, as increases in nominal GDP through pure inflation would allow for larger federal budgets.


Finally, this bill authorizes a $2.4 trillion rise in the debt limit. I have never voted for a debt ceiling increase and I never will. Increasing the debt ceiling is an endorsement of business as usual in Washington. It delays the inevitable, the day that one day will come when we cannot continue to run up enormous deficits and will be forced to pay our bills.


In conclusion, Mr. Speaker, while I sympathize with the aims of this bill's sponsors, I must vote against HR 2560. It is my hope, however, that the looming debt ceiling deadline and the discussion surrounding the budget will further motivate us to consider legislation in the near future that will make meaningful cuts and long-lasting reforms.

Obviously raising the debt ceiling is going to be a bust for America no matter how you add it up.  The CRIMEX/Banking Cartel are desperate to make you believe otherwise, and equally desperate to silence Silver and Gold from revealing the TRUTH that raising the debt ceiling is NOT going to fix a damn thing that is wrong with our economy...and thus their premeditated raid on the Precious Metals yesterday afternoon.

Andy Hoffman, of growing Ranting Andy fame, had this to say about yesterday's pathetic CRIMEX raid in the NY Globex after hours market immediately following the close of the CRIMEX for the day in New York:

By Andy Hoffman
RANTING ANDY – Alright CARTEL, you think you’re in the driver’s seat, right?

Do you think that by bashing PAPER gold and silver late on a quiet summer afternoon, with President Moron speaking, that you will somehow influence holders of PHYSICAL gold and silver to sell?

Or that ANYONE ON EARTH will believe what he is saying is BULLISH for STOCKS and TREASURY BONDS and BEARISH for gold?

Or that ANYONE with half a brain will be “worried” that something said regarding the “debt ceiling negotiations” was “important”?

After eleven straight up days in the gold market (not a single one of more than 1%, of course), culminating in yet ANOTHER ALL-TIME HIGH price earlier this morning, sentiment in the PM sector is, AMAZINGLY, closer to its all-time LOWS than its highs. There are some aspects of “summer doldrums” that are meaningful, such as that many traders are out of the market (causing exceedingly low VOLUME), but I think I’ve proven that my June 27th RANT, “Summer Doldrums – The Biggest Load of C—p Ever” was correct, in that gold and silver can certainly soar in July if the Cartel is overpowered.

Anyhow, with temperatures well over 90s for much of the country, gold up for eleven straight days, every moron “chartist” claiming that gold was “due for a fall”, and every moron “strategist” calling for a “relief rally” when a debt ceiling settlement was eventually made, it was the PERFECT time for a patented Cartel attack.

Sure enough, President Moron makes a statement regarding some drivel about a “Group of Six” plan to cut the deficit (and, of course, dramatically raise the debt ceiling, but that didn’t seem to get any press), and voila U.S. stocks and Treasuries SOAR while gold and silver are VIOLENTLY SMASHED, per the two charts below.

And what a shock, right at the ROUND NUMBER $1,600!

Never mind that no real details about such a plan were released or voted on, or that what they are discussing, even in general terms, was exactly what the market has been expecting.

And pay no mind to the fact that “higher than expected spending cuts”, if this is indeed being discussed (I have no idea if it is) will be DECISIVELY BEARISH for U.S. stocks while a dramatic increase in the U.S. debt ceiling, particularly one predicated on proposed spending cuts 5-10 years from now, will be DECISIVELY BEARISH for U.S. Treasury Bonds.

Or the fact, that, immediately after this “News” (if you can even call it that), Moody’s stated that it might still downgrade the U.S.’s credit rating.

Or the minor footnote that, whether they cut the deficit to the bone (creating a massive depression that will certainly lead to a Treasury default) or increase the debt ceiling to infinity (guaranteeing a Treasury default by inflation), the GOLD PRICE WILL RISE DRAMATICALLY in either case (as it did during both the 1930s Depression, using mining stocks as a proxy, and the 1970s inflation scare)!

Again, why let facts get in the way of a good story, particularly when you have the PPT, Exchange Stabilization Fund (no, it was not shut down – LOL) and Gold Cartel all working in unison to manipulate the PAPER markets. Heck, looking at Yahoo Finance, ZeroHedge, and other sites right now, I can’t even find a “story” to explain the market moves, and I probably won’t as ABSOLUTELY NOTHING HAPPENED!

Today’s attack was no different than the July 11th raid, a premeditated orgy of NAKED SHORTING in the PAPER gold and silver markets, in INCREASING AMOUNTS by many multiples, to try and put off the inevitable gold EXPLOSION long enough to pass a sizable debt ceiling increase, which I assure you will occur.

Ranting Andy minces no words.  This guys keyboard is as sharp as a tack as he once again nails what everybody who watches these Precious Metals markets daily sees themselves, and wishes they could express.  Ranting Andy screams for us all!

That's right folks, what you have witnessed on July 1, July 11, and July 19 has been pure market manipulation by a VERY DESPERATE banking cartel that is quickly losing control of the muzzle they have kept on the Truthsayers, Silver and Gold.  The global fiat money system is collapsing before our very eyes under an avalanche of debt, and these criminal stooges honestly believe they can prevent the inevitable by suppressing the prices of Silver and Gold?  PITY THE FOOLS.


Their are two sides to every story, and Precious Metals writer Jeff Nielsen quite creatively explains in his essay below how if you were paying attention to the headlines "explaining" the recent 11 DAY rally in Gold, you would have seen this CRIMEX/Banking Cartel raid coming...and realized quickly that it would be an utter failure...,but it his observation that there can be NO BEARISH implications for Precious Metals once the debt ceiling debate is settled that Precious Metals Bulls should be alert too:


Written by Jeff Nielson
With respect to the U.S.’s debt-ceiling tango, the theatrics are even more absurd. As the world’s biggest deadbeat, with the world’s biggest structural deficits, the United States has two “choices”. It can raise its debt-ceiling substantially, or it can put a gun to its head and pull the trigger. You don’t have to be a “psychic” to figure out how this is going to end.

What is far, far more ridiculous however is that once Republicans and Democrats have finished their posturing for the cameras and actually announce a done-deal this will be proclaimed as somehow having “fixed” the U.S. economy. Back in the real world however, any “solution” will be no different than how an alcoholic “solves” his own “problem” when he finds the key to his liquor cabinet.

More debt (for the largest deadbeat the world has ever seen) means imminent bankruptcy just as surely as more booze for a hardcore alcoholic means an early grave. Even more absurd, authorizing more debt means B.S. Bernanke will immediately crank-up his printing press and churn-out Bernanke-bills at an even more reckless rate.

In short, any rational analysis of these economic parameters means that it is utterly impossible to construe any bearish implications for either gold or silver. Instead, the opposite is true. In keeping with their addictive behavior, any/all “solutions” of these debt-addicts always involve more debt. Since none of these deadbeats (on either side of the Atlantic) can actually finance more debt, each and every incremental increase in debt corresponds to an identical ratcheting-up of their reckless money-printing.

In other words, every “solution” proclaimed by these charlatans directly makes gold and silver more valuable.
This means that when we see gold get knocked back by $30/oz, and silver get pushed-down by roughly $2/oz in this scenario (both of which are now small moves in percentage terms) we again have conclusive proof of “manipulation”. The actions of U.S. and European officials have unequivocally made gold and silver more valuable – and yet the paper-pirates in New York have been able to push bullion prices lower.

The “last laugh” will always belong to the gold and silver bulls. With the banking cabal running out of plausible anti-gold/anti-silver propaganda just as quickly as they are running out of actual bullion, their capacity to manipulate the market through “jawboning” alone continues to diminish. Simultaneously, their leverage and vulnerability (on the short side) is exploding exponentially as their minimal reserves of bullion continue to dwindle.

It is almost comical now, these CRIMEX raids.  The desperation each raid now represents is actually profitable for the Precious Metals Bulls as each raid only increases the demand for the "physical" Precious Metals themselves.  The CRIMEX/Banking Cartel are literally shooting themselves in the foot with each raid they conjure up.

I said it before, and I will say it once more:

"August 2, 2011 is financial system D-day. Raise the debt ceiling, and the US Dollar implodes. Fail to raise the debt ceiling, and the US Dollar implodes. The countdown has begun.



It's The Debt, Stupid."

After the FAILED CRIMEX raid on July 1, Silver rose 10% over the following six trading days.  After the July 11 FAILED CRIMEX raid, Silver rose 17% over the following six trading days.  Six trading days from today takes us to the last trading day in July, and First Notice Day for August Gold Delivery.  Silver in Gold are on the launching paid, and taking on fuel as I type this...BUY THE DIPS!

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