Wednesday, July 18, 2012

For Gold And Silver, The Big One Is Near

Finally, the mainstream media is not only reporting on global banking fraud, but accusing the banks of fraud as well.  This has been a LONG time coming!  And yet, when it comes to the manipulation of Precious Metals prices, the mainstream media has a lot of catching up to do.  Unfortunately, it will [likely] only be after "The Big One", that the mainstream media will reveal the Truth about the decades long suppression of the prices of Precious Metals by the banks.

July 18, 2012
By Eric King

Today four-decade veteran John Hathaway told King World News, “People have talked about gold manipulation ... There is tremendous corruption in the banking system, and I think the banks are now essentially agents of the state, more than they ever have been.” The prolific manager of the Tocqueville Gold Fund also warned, “... people are concerned that their liquid assets are not safe,” and “... there is enough in the system, right now, to justify gold trading well above $2,500.”

Here is what Hathaway had to say: “All of us look at the fundamentals and say, ‘How can gold not be $2,500?’ I remember back in 2008, and I asked myself, how can gold not be at a much higher number? What I learned then is the causes for gold to be trading higher are there, but you don’t get instant gratification in this game.”

“Let’s not forget we are fighting the powers that be, and they don’t want to see gold going to $2,500. So they are trying to paint the tape. People have talked about gold manipulation, and now we know that banks have manipulated LIBOR. There is tremendous corruption in the banking system, and I think the banks are now essentially agents of the state, more than they ever have been.

So that’s just one more reason to be distrustful of financial assets you have in the banking system....

Continue reading the John Hathaway interview here :

July 17, 2012
By Eric King

Today Stephen Leeb told King World News that the gold market now boils down to a “war between establishment and the non-establishment.” Leeb, who is Chairman of Leeb Capital Management, also said, “When the banks finally get scared that they are short too much gold, you will see a major explosion in price.”

The acclaimed money manager also stated, “The banks continue to charge the customers for holding their gold as ‘allocated,’ even though the gold has gone out the door to aid in the gold price suppression scheme. This is fraud, plain and simple, but this fraud is being encouraged by the establishment.”

Here is what Leeb had to say about the war in gold, who the players are, and how it will end: “I’ve been reading through your past interviews, Eric, and it’s becoming more and more apparent to me that the gold market is really at the center of what is the major divide in this world, and that’s the establishment vs non-establishment.”

“The establishment believes the dollar should be currency. I’m just saying they have a vested interest, a very, very strong interest in making sure the dollar maintains its status as a reserve currency. The problem is that it is becoming clear to virtually all savvy investors that gold is a better currency to own.

Gold has gone up almost six and a half fold since the beginning of this century....

Continue reading the Stephen Leeb interview here :

July 16, 2012
By Eric King

Today John Embry told King World News, As the global economy continues to deteriorate, the natural reaction to that (by central planners) is to create as much money as humanly possible, to make sure that it (the economy) doesn’t implode.” Embry also said, “To me, that’s enormously supportive of higher gold prices.”

Embry, who is Chief Investment Strategist of the $10 billion strong Sprott Asset Management, also discussed market manipulation. Here is what Embry had to say: “Gold survived another attack from the other side last week, and posted a very strong recovery on Friday. So I’m not the least bit surprised meeting resistance today because one of the mantras in this whole gold suppression scheme is to keep excitement to a minimum.”

“One way you do that is you don’t permit follow-through of any significance. You don’t have a day where gold is up 3% or 4%, and then follow it with another day like that. So now gold is struggling to hold its price it reached on Friday.

But the fact is we are coming into a seasonally strong period of demand....

Continue reading the John Embry interview here :

"How outrageous and hypocritical is this one?… Bernanke said to Congress that the LIBOR manipulation was "unacceptable." Excuse me Bernanke! You have the cojones to say that publicly while your own outfit manipulates the price of gold and silver nearly every day?"
 -Bill Murphy, GATA

From Bill Holder, GATA [ ]  Please Subscribe!

Bill H:
To all; "How close are we to a new Great Depression?" This was a question and article put out by none other than CNBC yesterday. Going back to the piece that I wrote yesterday, had we not run a deficit equal to 10% per year of GDP, the 2008-09 "recession" would have seen a decline of OVER 10% (a 10% or greater decline of GDP IS the definition of a "depression") and we would never have had a positive quarter since then. In short, the answer to CNBC's question is that we ALREADY are and HAVE BEEN in a depression since late 2007, early 2008.

Look at housing for example, I can remember back in the mid to late 1980's where 1.5 million new homes were built per year in the U.S. Fast forward to the current "recovery", we have only built 1.5 million homes in the last 4 YEARS,! This by the way is a drop of 75% or so. Inventories are still very high and the foreclosures just keep on coming. Banks have been withholding foreclosed homes from the market and not dumping them so as to not shoot themselves in the foot and smash prices further. Ask yourself, are the banks on more solid footing today than they were back in 2008? Look at the auto industry, back in the heyday, 16-17 million units were sold per year. Now, after dropping to slightly less than 10 million units, 13 million is all we can hope for and still 20% lower than "the good old days".

These are 2 pretty significant industries and at one point the heart of our economy. Neither has, nor will, even come close to the glory days even with interest rates as low as they have ever been. The "bubbles" have not reflated and after seeing interest rates drop to the current levels, who can argue "recovery or even green shoots" with a straight face? My point is this, ALL of the past "policy tools" that used to work, now don't and they haven't worked in a very very PUBLIC FASHION! It is not like fiscal policy was used on it's own, neither was monetary policy. No, they were used jointly and absolutely blasted full force at the economy, the result? Not enough umpf to kick this dying carcass of an economy forward for more than a few months at a time.

I would also like to add that the "numbers" we are forced to use are compiled by the government and are not even close to the reality as compilation methods have been changed numerous times to elicit "more favorable" numbers! Even with false unemployment, inflation and sales numbers, the policy tools have not worked. Now, we face municipalities, states, the Treasury and the Fed having to go forward with impaired balance sheets and the ability to "borrow and spend" more being impaired. Make no mistake, on the municipal and state levels, taxes will be raised and services cut unlike anything we have ever seen or "nightmared" about. Which leaves only the Fed and Treasury as the "engines of new credit". The balance sheet of the Fed is now laden with junk credit and the Treasury's admitted debt (not counting war debt, Medicare, Social Security and many other obligations) is already over 100% of GDP.

Folks, this is a depression and will be seen as one shortly. We are just one market event, bankruptcy event, one more MF Global or PFG Best or other fraud event uncovered (ie. where's the Gold?) away from this realization. People ask me all the time "when do you think it will happen?" to which I now always reply, "could be tomorrow, next week, next month or whatever, it should have already happened long ago". If not for bogus reporting of economic numbers, bogus accounting and "marking of assets" by banks, official sector propping (officially and behind the curtains) of the stock and bond markets, bogus reporting by our media to keep the herd calm, the roof would have already caved in.

In this business you can never ever "guarantee" anything but I will guarantee you this, when, not if the roof caves, you will hear from every direction possible, "who could have seen this coming?". A better question would be, "who couldn't?". Every "Black Swan" event is by definition a "surprise". In the current, because something is "needed" to point a finger at, you can bet your last Dollar that some sort of Black Swan event which "no one could have seen coming" will appear out of nowhere. Every policy tool has been used and every financial and economic number fudged or forged, the only thing left is to point fingers which may be exactly what this LIBOR scandal will morph into. In the meantime you have only one job to do, do not let yourself be fooled, bored or scared out of your precious metals positions. It is WAY TOO LATE IN THE GAME to make that mistake now! Regards, Bill H. 

After two days of Quivering Lip Bernanke's dismal assessment of the US Economy before the US Senate and Congress, equity markets have convinced themselves that Bumbling Ben is just itching to pull QE3 out of his hat...despite the obvious lack of interest in doing so from Ben-jibber-jabber himself.

The markets are brimming with "Fed Hopes" as they levitate higher on next to NO VOLUME.  Ya gotta hand it to "Baffle Them With My B.S." Ben, he has does the impossible, and kept the US equity markets from collapsing with nothing more than the words from his quivering lips and the lips of his companion Fed Heads.

What is most amusing is that the higher the equity market's "hopes" levitate the markets, the LESS likely "Been There Done That Didn't Work" Bernanke will be able to pull another rabbit out of his hat...let alone be right in doing so:


Even the Precious Metals Markets have fallen victim to the "Fed Hopes" sentiment...falling when these "hopes" are dashed, rising when they are raised.  I've grown tired of watching the Precious Metals markets move in sync with equities...haven't you?  I honestly believe that until either these Fed Hopes are extinguished, or Bubble Blower Ben unleashes QE3 [only to be greeted with its complete failure], the Precious Metals markets will remain mercilessly tethered to the levitation and air pockets in the equity markets.

And when the Precious Metals Markets and the Equity Markets go their separate ways, then, and only then, will we get The Big One.

The End of the Bernanke Put is Here

Submitted by Phoenix Capital Research on 07/17/2012 08:20 -0400

For well over a year, even after Ben Bernanke admitted that the consequences of QE outweighed the benefits, the financial media world is awash with claims that QE 3 is just around the corner. It doesn’t matter than it’s been over a year. Nor does it matter that the Fed has staged 10 FOMC meetings without launching more QE, everyone claims QE is coming.

Guess what? It’s not. And I’m going to lay this idiotic theory to rest right here and now.

First off, the Fed cannot launch QE because of the political climate in the US. In case you missed it, the last time the Fed engaged in a large monetary move (outside of just extending some pre-existing policy) was in November 2011 when it facilitated a coordinated Central Bank move to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangements.

The political response to this was extreme. Every GOP candidate under the sun began to target the Fed. Some began calling for Bernanke to be fired.  Meanwhile, Obama became totally silent on defending the Fed. Let that sink in for a moment. Obama, who reappointed Bernanke, didn’t defend Bernanke’s actions. In fact he acted as if nothing had happened.

The message was clear: the Fed had become politically toxic and if Obama wanted a shot at re-election, he needed to distance himself from the Fed.

It was only a few months later that the Fed went into full on damage control mode by increasing its town hall meeting efforts (Bernanke now goes to colleges to explain why the Fed is great), writing complaints about how the media is presenting its moves during the financial crisis along, and of course the now famous “Bernanke’s a normal guy who drives a Sebring and reads a Kindle” article in the Wall Street Journal.

Consider that Bernanke, only a few years ago, lied to Congress about monetizing debt. Around that same time the Inspector General in charge of oversight of the Fed said that the Fed:

1)   Didn’t know where it was sending hundreds of billions of Dollars.
2)   Had not launched any investigations into where the money had gone
3)   Had not launched any investigations into why Lehman Brothers had been allowed to fail

Has everyone forgotten this? Bernanke, the savior of capitalism, Time Magazine’s Man of the Year, and arguably the most powerful human being in terms of monetary clout ON THE PLANET is now going into classrooms to explain why the Fed is wonderful and should continue to exist.

Even more than that, he’s having his favorite mouthpiece at the Wall Street Journal portray him as a normal American who drives a US car and reads his kindle. This is the HEAD OF THE FED we’re talking about. Since when does Bernanke need anyone to depict his private life? The guy used to tell the media to get stuffed when it snooped around the Fed’s actions… now he’s openly going to the media asking to get profiled?

Folks, the political game has changed in the US. The Fed is no longer invulnerable. In this climate more QE cannot possibly happen. End of story. Indeed, if the Fed were to launch QE at any time between now and the election, Obama is DONE. The last possibly chance for QE without it being a clear hand-out to Obama (and a gift from the political gods to Romney) was June. The Fed passed on that.

Don’t believe me? Why do you think Obama is privately begging Germany and EU leaders to keep the EU together until after November? He knows the Fed cannot step in and save the day without killing his chances at re-election. END. OF. STORY.

Finally, there’s a simple monetary reason the Fed cannot engage in more QE: BANKS NEED TREASURIES. Treasuries are the ONLY senior asset on bank balance sheets that are increasing in value (don’t even try to claim that mortgage bonds, corporate bonds or muni bonds are attractive to banks given what the banks know about the ongoing debt crisis in the world).

More QE pushes the US Dollar down. So for the Fed to engage in more QE would mean the Fed would be buyingappreciating assets from the banks (which can be leveraged up for trades… remember all the big banks are now basically hedge funds) in exchange for cash which yields next to nothing and would be depreciating in value if more QE was announced.

The banks need all the Treasuries they can get their hands on. I know, I know, ultimately Treasuries will be worth much less when the debt crisis hits the US. But it hasn’t yet.

If you’re a large bank what would you rather own? Treasuries or some other sovereign bond which either yieldsnothing (Germany, Japan, France) or which is about to default (the PIIGS and others)? 

The answer is obvious. You want Treasuries. We’re not talking about ideals here; we’re talking about reality. And in today’s financial reality, Treasuries are the best senior most asset a bank can buy. WHY would a bank want to hand these off to the Fed for cash, which yields nothing?

I could go on and on, but the reality is the above arguments alone erase any reason for the Fed to launch QE any time soon, if ever. The ONLY reason the Fed would launch QE would be if liquidity needs were so desperate for the banks that the would be willing to give up their senior most assets in exchange for cash to meet day to day liquidity needs.

And if we get to that point in the US again, QE will be the LAST of our worries.

So, QE is not coming. End of story. You can continue to argue otherwise based on some idealistic view of the world, but the reality is Europe and Japan’s bond markets are both on the brink of collapse. US banks want all the Treasuries they can get. In a perfect world, they’re not great investments, but they’re far more attractive that the alternatives in the REAL world.

So… if you’re still investing based on the idea that QE is coming and that the Bernanke Put is firmly in place, you’re going to be in for a HUGE surprise in the coming months. QE isn’t coming. And the Bernanke Put is losing its credibility rapidly.

Which means… the primary prop underneath the US stock market and financial system (namely Fed intervention) is slowly being removed. What follows will not be pretty and smart investors should be taking steps now to prepare in advance.

If you’ve yet to take steps to prepare for this, I can show you how: my Surviving a Crisis Four Times Worse Than 2008 report is chock full of information on how to not only survive but thrive during the months to come.

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Good Investing!

Graham Summers

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Biderman’s Daily Edge 7/17/2012: Stock Prices to Emulate Drops in Housing Values Post Bernanke Put

Got Gold You Can Hold?

Got Silver You Can Squeeze?

It's NOT TOO LATE To Accumulate!!!

1 comment:

  1. The one thing I know if Obama comes in it will be good for those who own gold the price will go up again. And if Romney gets in gold price will go down but only for a short while because America or us owe trillions and this monstrous bill is destroying the purchasing power of the dollar. When you go in the store and bread costs more you say wow bread has gone up. But that is not what is happening, what is really happening is that the purchasing power or the values of a dollar is shrinking and you need more to buy the same thing. This is happening from money printing out of thin air, the more money that is thrown out in the market waters down the money that YOU already have in your pocket. The fact is and not just my opinion that since the creation of the bank cartel called the Federal Reserve our dollar has lost over 90% of its value. Its been happening for about 90 years so why should it stop now. and the answer is it wont. Sadly unless the government and the politicians take control of the printing of money and the monstrous IRS nothing will really change.
    Carl Leduc
    Empower Network-Helping others escape the system