Thursday, October 27, 2011

HOPIUM Fuels Euro Squeeze as US Dollar Crashes

Markets cheer euro deal but questions remain
By Luke Baker and Julien Toyer
After a summit in Brussels, governments announced an agreement under which private banks and insurers would accept 50 percent losses on their Greek debt holdings in the latest bid to reduce Athens' massive debt load to sustainable levels.

Reached after more than eight hours of hard-nosed negotiations between bankers, heads of state and the IMF, the deal also foresees a recapitalization of hard-hit European banks and a leveraging of the bloc's rescue fund, the European Financial Stability Facility (EFSF), to give it firepower of 1.0 trillion euros ($1.4 trillion).

But economists noted that key aspects of the deal, including the mechanics of boosting the EFSF and providing Greek debt relief, would take weeks to pin down, meaning the plan could still unravel over the details.

"There is plenty of room to doubt whether each of the key aspects of the package will deliver within its own space," said Malcolm Barr, an economist at J.P. Morgan. "The hope of EU policy makers is that the whole will be perceived as more than the sum of its rather questionable parts."

Three months ago, euro zone leaders unveiled another agreement that was meant to draw a line under the debt woes that threaten to tear apart the 12-year old currency bloc. But they realized within weeks that it was inadequate given the depth of Greece's economic problems and the vulnerability of their banks.

The new deal aims to address these holes.

The punch bowl at this party has been spiked with an overdose of Hopium.

"The hope of EU policy makers is that the whole will be perceived as more than the sum of its rather questionable parts."


EU policy makers continue to "hope" they can fix their gapping soveriegn debt wounds with a couple of gauze pads and some surgical tape.

Gold is being pressured this morning because of this "hope" that EU has come to a decisive conclusion to it's debt woes.  It has not.  The US Dollar is getting clubbed this morning as the squeeze on the Euro shorts tightens...and Gold is down?  Why of course it is.  Who needs Gold if all the debt problems in Europe have been fixed with Hopium?

The commodities complex is ALL UP, but Gold is Down on a falling US Dollar.  Hey that makes sense to me...need anymore proof the Gold market is rigged to support western government "intentions"? 

"This EU plan is genius, see...even the Gold market agrees!"

Yeah, right...

A $1.4 TRILLION rescue fund, the EFSF, is no small amount of money.  In fact it is a gargantuan sum that is highly inflationary.  This is hardly a negative event for Gold, and an even less positive event for Europe and the World.

Consumers, Businesses Pump up U.S. Q3 Growth- AP

U.S. economic growth increased at its fastest in a year in the third quarter as consumers and businesses set aside fears about the recovery and stepped up spending, creating momentum that could carry into the final three months of the year.

Consumer confidence fell in October to the lowest since March 2009.  How can this GDP number be reported with claims that consumers have "set aside fears about the recovery" when clearly that is NOT the case.

Bloomberg Comfort Index Shows Economic Expectations Lowest Since March 2009.

GDP was reportedly up 2.5% because of consumer spending.  Is there any mention that the bulk of consumer spending this summer was on INCREASED food and energy prices?  Hello!  Any GDP that is reported is merely a reflection of the inflation that is mushrooming in our economy despite the denials of its existence by the government.

Recent inflation statistics show that "according to the government" the CPI is running around 3.9%.  If inflation is at 3.9% and GDP is at 2.5% the REAL growth in the economy is at NEGATIVE 1.4%.  There is NO "real" economic growth in the USA.  The only growth that exists is the result of debt fueled inflation. has inflation running at 11.5%...that would put "real" growth at NEGATIVE 9%.

US Government CPI data that measures only "core inflation"  [inflation minus food and energy] is running at 2% [up from 0.6% a year ago].  2.5% GDP is hardly exemplary growth when considered even against the messaged "core inflation" number.

I hardly see how this GDP number creates "momentum" going into the fourth quater as claimed above.

Q3 Advance GDP Prints At 2.5% In Line With Expectations; 100% Debt-To-GDP Threshold Postponed By 45 Days

Inflation Peaking in U.S. With Most Prices Tumbling: Commodities
By Whitney McFerron
Oct. 25 (Bloomberg) -- The biggest rout in commodities since the global recession may be a sign that the fastest U.S. inflation in three years is peaking.

The Standard & Poor’s GSCI Index of 24 commodities entered a bear market last month after sliding more than 20 percent from a two-year high in April, on concern that slower growth will cut demand. A slump in the gauge from a 2008 record preceded a drop in inflation, while a 2009 rebound caused the consumer price index to climb. Raw materials fell 12 percent in September as the CPI rose 3.9 percent from the same month a year earlier, the most since 2008.

“There is a sense that headline inflation is receding,” said Stephen Stanley, the chief economist at Pierpont Securities LLC, a government-bond broker in Stamford, Connecticut. “Things have been a little more tame the last few months than they were earlier in the year, when you had this relentless push higher, in energy prices especially.”

Is Bumbling Ben Bernanke's claim that high commodity prices were only "transitory" proving prophetic?  Yes, if he were hoping for lowing commodity prices so that he could unleash the much needed [and anticipated] QE3.  Funny how commodity prices fell after Bumbling Ben so confidently repeated that they would, isn't it?  But have they really fallen?  Has Ms. McFerron looked at the CRB Index recently?

Commodity prices have risen 10% since the first of October.  But headlines like Ms. McFerron writes are just what Benny and the Inflationistas want to see so that they may comfortably announce a new round of QE to again try and jumpstart our stagnant economy, AND bailout Europe.

Gold has sprung to life mid-morning, and caught up to the rest of the commodity sector surging on the falling US Dollar.  Silver has been stout all day and has cleared the $34 level with some authority.

Silver has cleared resistance at $34.68.  Next line of resistance at $36.76...A retest of the major breakout at $32.62 can not be ruled out in this perpetually rigged market.

Gold has cleared resistance at $1722.  Next line of resistance at $1766...A retest of the major breakout at $1677 can not be ruled as these CRIMEX crooks will do anything and everything to try and take your Gold from you.

The world's monetary and financial system is flat assed broke!
From Bill Holder for GATA on Oct. 25
They can't see it?

To all; as the title implies, I just don't understand how ANYONE "can't see it". "It" being the most blatant and obvious fact that the world's monetary and financial system is flat assed broke! Europe is absolute toast, fair value on Greek bonds is less than 50% of par value and everyone knows it. Their banks are insolvent even without any haircut from Greek holdings and everyone knows this. Italy, Portugal and Spain are all beyond fiscal sanity or repair and this also passes as common knowledge. The real estate markets are deflating across Europe (and the entire globe) after previously being blown to huge overvaluation levels with the help (prodding) of European banks and this is also widely known. The European Central Bank does not have enough money, muscle, options (or even competent leaders it seems) to even flatten out the path much less pull out of it's nosedive and even mainstream media is reporting on this. If you add these "well knowns" together then you can logically make the leap that the Euro currency is done, it's life ended and will be replaced.
Then you "cross the pond" to the U.S.A. and guess what? Same thing! The banks are insolvent if they actually marked assets to market, everyone knows this.

Municipalities and States are fiscal beggars on their way to bankruptcy courts and this is already widely known and visible in the last couple of weeks with the first actual filings. Next you turn your eyes to Uncle Sam and his finances, yep another deadbeat here and even the "hometeam" rating's services have taken notice of this. You could do a poll from any inner city to remote corner of the country and EVERYONE knows deep down that the U.S. is financially (and morally) broke beyond any repair. EVERYONE knowa that EVERYTHING is broke, busted and insolvent!

So what is my point? My point is this, THIS is how every financial panic in all of history has happened. THIS is how the children's tale of "The King with no clothes" was penned. So if everyone knows that everything is broke then why do hear on CNBC et al that "we can work our way through this and muddle along"? Because as Jack Nicholson said in A Few Good Men, "you can't handle the truth!". This has to be it. I cannot think of anything else because to me it has been MORE THAN obvious for quite some time. I have heard plumbers, farmers, bankers, real estate agents, city workers, you name it, tell me that "the government is broke" yet when I ask "what are you doing about it?", they say, Ï have my money in an FDIC insured bank account". Yes, some are now getting around to buying some physical Gold and Silver but mostly because "they are going up". The point is this, people "know" but they just can't make the leap to acting on what they know.

I believe that this phenomenon along with "you can't handle the truth" is a function of very long term brainwashing and "false education", it must be. Using ANY logic at all would lead you to "pull" as much of your investable assets OUT of the system. "Out" meaning out and away from the obvious damage that the broken fiat system will inflict. "OUT" meaning into physical metals and assets, OUT meaning into the companies that produce these physical metals and assets. To me, it is so, so sad to see people who have worked, lived and saved their entire lives within this fiat system like "good little boys and girls", about to get completely wiped out. When I say "wiped out", I mean penniless!

Think about it, everything, and I do mean EVERYTHING within the current fiat, paper, fraudulent system is going to be valued at what it is truly worth...ZERO. If you can wrap your head around this (admit it to yourself), you can act accordingly. The day is coming when EVERYTHING "paper" is going to stop. Banks will not open, credit cards not function, (I believe physical Dollars will actually spend for anywhere from 2-10 days until they too become unacceptable) and the entire system will sieze up and into a barter society until a NEW and "acceptable" (from a confidence standpoint) is issued and circulated.

We are very, very close as there are now calls for a new "World Central Bank". This has been floated in recent days by none other that The Vatican. I do not want to get into religion here, I bring this up because there is very credible evidence that The Vatican accumulated massive amounts of Gold during and especially toward the end of WWII. It is possible that they are actually the largest holders of Gold in the world. I mention this because any new currency MUST have some tie to Gold and the limited Gold that is above ground MUST be revalued higher as there is not enough at current prices to support a 7 Billion person global economy...but I digressed didn't I? Long story short... how can anyone not see what is about to happen? The whole fiat episode is like your crazy Aunt in the basement, everyone knows she is there but no one is willing to talk about it. Those who do are branded as crazy and no one wants to believe it anyway. Regards, Bill H. P.S. maybe there are a few more investors who "do see it", Gold is up nearly 3% today and thus violating it's decade+ long 2% collar!

You can read more from Bill and the folks at GATA here: .  And I encourage you to do so.

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