Inflation Is Our Savior

Stock Futures Rise on Earnings, Economic Reports- AP
Stocks are set to rise after reports show a slight improvement in the weak housing market and wholesale prices rose for the first time in three months.

Producer-Price Increases Eases Deflation Concerns -Wall Street Journal
WASHINGTON—US producer prices rose for the first time in four months in July as the cost of raw materials increased, easing concerns that the economy could become so weak that it leads to deflation.

After inflaming fears of a deflationary death spiral for the economy, the financial news media has now taken to cheering a rise in inflation. Can it get any better than this? Core producer prices rose 0.3% vs the general concensus of 0.1%. Tiny numbers, but a substantial miss to the upside. Year over year core producer prices rose 1.5% vs the general concensus of 0.2%. This is a huge miss. Remember, "core" numbers are touted by the government and their fawning financial news hounds because they strip out the "volatile food and energy prices".

As I have noted recently, the "deflation scare" is all part of a public relations ploy by the government to justify and excuse rising inflation as we move forward in this economic crisis. The government and the financial news media have gone to great lengths to encourage consumers to "welcome" inflation as the savior of our economy...after all, inflation is what makes our economy grow, and if we want our economy to grow faster and avoid the deflationary death spiral, we must expect and yearn for more and bigger inflation. This is insanity!

A Precious Metals investor can only lick his chops at news like this. Inflation is what the Fed has denied for years and publicly fought against while stoking it behind the scenes. Now inflation will be cheered as the savior of our economy as it destroys it. How grandly American.

No wait, it appears that inflation has reared its ugly head to less cheerful response in other parts of the world.

India inflation eases to 10 percent on good rain
India's headline inflation eased to 10 percent in July as ample rainfall cooled food prices and the nation's breakneck industrial expansion returned to more normal levels, government figures showed Monday.

The better than expected inflation data -- coupled with June industrial production which came in at a 13 month low -- takes some pressure off the central bank, which has hiked key interest rates four times this year in an effort to tame spiraling prices.

June inflation was 10.6 percent. The government revised May inflation to 11.1 percent, up from a prior estimate of 10.2 percent.
http://www.businessweek.com/ap/financialnews/D9HKH6PG0.htm

The Indians don't sound so happy about inflation and are actually cheering a slowdown in industrial production. No wonder Gold demand is so high this year in India.

Bank of England Governor warns that Britons face higher inflation for longer
Figures from the Office for National Statistics showed a 3.4pc increase in the cost of food over the last year, with fruit being 10pc more expensive. The last year also saw a sharp rise in the cost of travel, which climbed an average 7.8pc.

Mervyn King, the Bank's Governor, voiced surprise that prices are higher than he had expected in a letter of explanation to the Chancellor George Osborne. While the overall consumer prices edged down to 3.1pc from 3.2pc in June, it remains above the Bank's own 2pc target, and the small decline will do little to ease the fear of some economists that a high cost of living will undermine Britain's fragile recovery.
http://www.telegraph.co.uk/finance/economics/7949919/Bank-of-England-Governor-warns-that-Britons-face-higher-inflation-for-longer.html

There is no joy in England with regard to inflation it would seem. In England a high cost-of-living will undermine the economy, not save it. I wonder if that is because in England they don't rig the inflation numbers like the do here in the States. Clearly there is no rigging of the inflation numbers in India, they are flying high. But then if the government were honest about inflation here in the US, we would see it clearly above 8%. How much longer can America go on living this lie before the World Community turns it's collective backs on it?

Doubtless that after rising overnight again, the Precious Metals will be held in check by the not for profit sells on the CRIMEX in their never ending effort to mislead the public about our economy.

"Rising inflation? How can that be true, look at the price of Gold today, it doesn't tell us that inflation is rising..."

It laughable, and so predictable. The absurdity of it is appalling, and only goes to prove how small the Precious Metals Markets are in the entire in investment world. That a fraud like this can continue for has long as it has can only be attributed to the fact that there are just not enough eyes focused on it...YET...but that is quickly changing.

Harvey Organ's - The Daily Gold & Silver Report shines an ever brighter light on the fraud at the London LMBA and the NY CRIMEX:

There has been a big development with respect to the LBMA turnover figures.

Gold transfers dropped a huge 12.9% from the previous month and silver dropped an astronomical 32.7%

Here are the announcements and a commentary from Adrian Douglas and then I will explain what it means:

First the gold announcement from Reuters:

Fri, 13th Aug 2010 17:15

LONDON, Aug 13 (Reuters) - Gold ounces transferred between accounts held by bullion clearers fell 15.3 percent to a daily average of 17.6 million ounces in July from a month earlier, the London Bullion Market Association (LBMA) said on Friday.

The clearing statistics measure how much gold and silver are transferred on a net basis between the accounts held at the bullion clearers.

Based on an average fixing of $1,193 an ounce, 3.2 percent below the June average, value fell to a daily average of $21 billion. The number of transfers declined 3.2 percent to a daily average of 1,684.

Measured year-on-year, gold statistics were mixed. Ounces transferred fell 0.3 percent, but value jumped 27.3 percent and the number of transfers rose by 27.8 percent.

Ounces transferred in silver fell 32.7 percent to a daily average of 57.2 million. 'The substantial fall in silver ounces transferred, for the second month in a row, brought this measure to the lowest level since these statistics were first produced in 1996,' the LBMA said.

Based on a 2.7 percent drop in the average fixing price, the value of transfers fell to a daily average of $1.03 billion.

The number of transfers fell 12.9 percent to a daily average of 290. Measured year-on-year, ounces transferred fell 36.8 percent and value decreased 15.1 percent. The number of transfers fell 6.5 percent.

end.

And now the commentary from Adrian Douglas:

Ounces transferred in silver fell 32.7 percent to a daily average of 57.2 million. 'The substantial fall in silver ounces transferred, for the second month in a row, brought this measure to the lowest level since these statistics were first produced in 1996,' the LBMA said.

With all the smoke billowing out of the physical silver market and a drain of silver inventory on-going at the Comex and JPM & HSBC reducing their shorts as shown by the Bank Participation report I can only interpret that this massive drop off in silver paper trading has moved to the physical market. Could it be that we have exposed the LBMA unallocated bullion fraud to the extent that investors are ceasing their business there on a massive scale? How otherwise could the trade suddenly decline to the lowest level since 1996? There is also a big drop off in paper gold trading. Could it be that the GATA exposure of the LBMA fraud has hit the bull’s eye? Only time will tell but if this is true that will not be very much time!

end.

We have been following data from the LBMA for the past 8 years and generally volume is always increasing. The only explanation to such a huge dropoff in volume is the switch by

many players to obtain physical and not waste time with the paper gold or paper silver market. Thus the unallocated gold and silver is being converted into allocated gold/silver

and the 100:1 paper to physical is starting to put massive pressure on the cartel members.

That is why we are seeing massive amounts of silver and gold leave the comex. I can see two reasons for this:

1. customers are seeing the writing on the wall and do not wish to see their metal co-mingled with dealer inventory.

2. dealers are trying to provide some physical to their London brethren who are witnessing massive conversions of their customers from unallocated gold/silver to allocated metal.

Ladies and Gentlemen: this is very explosive and it can and will place both the LBMA and the comex with huge possibilities of default.(bank run)

There is nothing in this world like a bank run---there is nothing in the world like a gold rush. These two major events have never occurred together on any global stage.

However, when they do, it will make this current economic malaise tame in comparison!!.
http://harveyorgan.blogspot.com/2010/08/august-162010-commentaryvery-important_16.html

"Protecting" the Precious Metals prices from the ravages of inflation may be job number one at the CRIMEX and LMBA, and when one considers where prices would be were it not for the "heroes of the zeros" it is clearly understood why they aid and abet the fraud of fiat currencies worldwide. John Williams at shadowstats.com notes the inflation adjusted prices of Gold and Silver below using the government's rigged numbers compared to honest inflation numbers:

Gold and Silver Highs Adjusted for CPI-U/SGS Inflation. Despite the June 28th historic high gold price of $1,261.00 per troy ounce, gold and silver prices have yet to approach their historic high levels, adjusted for inflation. The London afternoon fix, per Kitco.com of January 21, 1980 would be $2,382 per troy ounce based on July 2010 CPI-U-adjusted dollars... and would be $7,727 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars [all series not seasonally adjusted].

In like manner, the all-time high price for silver in January 1980 of $49.45 per troy ounce [London afternoon fix, per silverinstitute.org] has not been hit since, including in terms of inflation-adjusted dollars. Based on July 2010 CPI-U inflation, the 1980 silver price peak would be $139 per troy ounce and would be $450 per troy ounce in terms of SGS-Alternate-CPI-adjusted dollars [again, all series not seasonally adjusted].

Clearly, the barometers of inflation have been kept in ice water to cover up the 100 year fraud global central banks, lead by the US Federal Reserve, have perpetrated on the public via their fiat currencies. True Gold and Silver prices would expose this fraud for the entire world to witness and shudder at. The world economy folks, with the US Dollar as it's reserve currency, is ABSOLUTELY WORTHLESS.

Gold market isn't 'fixed'; it's rigged

Dear Friend of GATA and Gold:

Following research done by GATA consultant Dmitri Speck, GATA board member Adrian Douglas has studied the morning and afternoon "fixing" of the gold price by the major London trading houses and concludes that it is just as much a price-suppression mechanism as the London Gold Pool of the 1960s admittedly was.

"The more gold rises overnight in essentially Asian markets," Douglas writes, "the more it is sold down into the PM fix. This was exactly the modus operandum of the London Gold Pool but now it is being done covertly."

Douglas, publisher of the Market Force Analysis letter, continues: "Such a consistent manipulative effort would necessarily involve entities with access to large amounts of gold; this implicates central banks, as they are the only entities with large hoards of gold, and furthermore they have a motive for suppressing the price of gold, which is to hide their mismanagement and debasement of their national currencies. Further, the five bullion banks that conduct the fix would have to be complicit because by definition they are responsible for determining the clearing price on the fix, so they must be aware of the impact on price of the selling activities of the entity or entities offering gold in such large quantities that it causes such price aberrations. As the central banks do not trade themselves, it is more than likely that some or all of the banks involved in the fix also act on behalf of central banks. What is irrefutable from this analysis is that the gold market is not 'fixed'; it is rigged."

Douglas' analysis is titled "Gold Market Is Not 'Fixed,' It's Rigged" and you can find it at GATA's Internet site here:

http://www.gata.org/files/AdrianDouglasGoldMarketRigged-08-14-2010.doc

And at the Market Force Analysis Internet site here:

https://marketforceanalysis.com/articles/latest_article_081310.html

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

The Ecstasy of Empire[MUST READ]
Paul Craig Roberts, Infowars.com
Let’s get real. Here is what the government is likely to do. Once Washington realize that the dollar is at risk and that they can no longer finance their wars by borrowing abroad, the government will either levy a tax on private pensions on the grounds that the pensions have accumulated tax-deferred, or the government will require pension fund managers to purchase Treasury debt with our pensions. This will buy the government a bit more time while pension accounts are loaded up with worthless paper.

The last Bush budget deficit (2008) was in the $400-500 billion range, about the size of the Chinese, Japanese, and OPEC trade surpluses with the US. Traditionally, these trade surpluses have been recycled to the US and finance the federal budget deficit. In 2009 and 2010 the federal deficit jumped to $1,400 billion, a back-to-back trillion dollar increase. There are not sufficient trade surpluses to finance a deficit this large. From where comes the money?

The answer is from individuals fleeing the stock market into “safe” Treasury bonds and from the bankster bailout, not so much the TARP money as the Federal Reserve’s exchange of bank reserves for questionable financial paper such as subprime derivatives. The banks used their excess reserves to purchase Treasury debt.

These financing maneuvers are one-time tricks. Once people have fled stocks, that movement into Treasuries is over. The opposition to the bankster bailout likely precludes another. So where does the money come from the next time?

The Treasury was able to unload a lot of debt thanks to “the Greek crisis,” which the New York banksters and hedge funds multiplied into “the euro crisis.” The financial press served as a financing arm for the US Treasury by creating panic about European debt and the euro. Central banks and individuals who had taken refuge from the dollar in euros were panicked out of their euros, and they rushed into dollars by purchasing US Treasury debt.

This movement from euros to dollars weakened the alternative reserve currency to the dollar, halted the dollar’s decline, and financed the US budget deficit a while longer.

Possibly the game can be replayed with Spanish debt, Irish debt, and whatever unlucky country is eswept in by the thoughtless expansion of the European Union.

But when no countries remain that can be destabilized by Wall Street investment banksters and hedge funds, what then finances the US budget deficit?

The only remaining financier is the Federal Reserve. When Treasury bonds brought to auction do not sell, the Federal Reserve must purchase them. The Federal Reserve purchases the bonds by creating new demand deposits, or checking accounts, for the Treasury. As the Treasury spends the proceeds of the new debt sales, the US money supply expands by the amount of the Federal Reserve’s purchase of Treasury debt.

Do goods and services expand by the same amount? Imports will increase as US jobs have been offshored and given to foreigners, thus worsening the trade deficit. When the Federal Reserve purchases the Treasury’s new debt issues, the money supply will increase by more than the supply of domestically produced goods and services. Prices are likely to rise.

How high will they rise? The longer money is created in order that government can pay its bills, the more likely hyperinflation will be the result.
http://www.infowars.com/the-ecstasy-of-empire/