It's Crunch Time

The blatant CRIMEX attack on Precious Metals prices Monday has exposed the bullion banks fallicious futures market as a desperate effort to save their asses from financial ruin. Global Precious Metals investors smell smoke at the CRIMEX, and have begun to anticipate the day the entire house of cards goes up in flames.

Dan Norcini at Jim Sinclair's MineSet commenting on Tuesday's Gold market reaction to Monday's CRIMEX attempt to paint Gold as a bad investment:

In one of the more marvelous market displays I have seen in many years, gold was able to shrug off a major technical reversal sign and actually attract enough buying to not only minimize downside movement but actually bounce higher. Considering the extent of speculative long side exposure, and the nature of today’s computer algorithms, its ability to remain firm is astonishing and probably says more about the overall psychology towards the metal than any comments I could make. Investors and traders at the Comex are not panicking out of gold in spite of the formidable technical resistance that surfaced yesterday.

While the record high of yesterday’s session is serving as our new upside technical resistance level and holding price in check for right now, the fact is gold did not fall apart – that alone has to have unnerved those dwelling in their bear dens which is why we saw them begin covering when gold held yesterday’s session lows and refused to break down any further. One day does not a market trend make but for the sheer audacious of the bulls’ performance, you have to tip your hat to their gritty determination to stand firm and refusal to run.

As far as open interest readings go – yesterday’s sell off was accompanied by a rather mediocre drop of a bit under 2,200 contracts bringing the overall number down to 600,895. Considering the extent of the volume of contracts traded yesterday, it is evident that there was a determined selling cap shoved in place even as some of the weaker shorts were forced out on the initial spike into a new record high price. I am a bit surprised that volume yesterday came in where it did; I had expected to see something closer to 200,000. Perhaps that is also why we are seeing gold holding up so well today. Fear by the long side did not apparently materialize during the plunge. As a matter of fact, volume in today’s session is actually more impressive. This is an interesting development which bears further scrutiny over the next couple of trading sessions. If this is the best that the bears can do with all the technicals in their favor, they are in trouble. They will need to take the market down below yesterday’s low on better volume to tip the market convincingly in their favor. I still cannot get over the amazing resiliency being displayed by gold today. This is definitely not the same gold market as back in 2008.

It would appear that Gold traders AND investors are no longer falling for the dirty tricks of the CRIMEX goons. The numbers are not adding up for the goons...they don't have the metals to back up their short positions on the CRIMEX and as each day passes, more traders and investors are coming to that realization. The CRIMEX is a paper fraud, and this is no longer just conjecture, it is a FACT.

Harvey Organ of The Golden Truth comments on Monday's now obvious criminal activity at the CRIMEX:

I remarked yesterday that if the open interest on the gold comex remained above 600,000 you could make funeral arrangements for our banking cartel.

The OI for the gold comex closed marginally down by 2199 contracts to 600,895.

No wonder gold catapulted higher at 8:20 this morning (the comex opening time) as the bankers get the OI number last night. We must wait until 1:30.

What must alarm them even more is the OI on the silver comex. It closed HIGHER yesterday despite the massive drop in silver price. The silver OI closed yesterday at 141,062 rising by 1852 contracts.

In other words, the huge downdraft of gold and silver pricing was only paper induced. This has increased the risk to our bankers.

Expect another raid tomorrow and Thursday as the bankers have to get this monkey off their backs.

Gold rose overnight to 1246, the Asians and Europeans taking advantage of the CRIMEX's misguided sales prices of the Precious Metals. But wonder of wonders, as the 8:20 CRIMEX opening bell rang this morning, the prices of Gold and Silver begin to fall quickly as the CRIMEX crooks work their criminal trade in Precious Metals they create out of thin air.

Between 8:20AM and 9:20AM, in just the first hour of CRIMEX trading, the price of Gold fell $10 an ounce. This instantly wiped out all overnight gains in Asia and Europe, AND pushed prices below yesterday's close. In just ONE HOUR!

Over the same span of time the price of Silver fell 30 cents.

Two thirds of the world sees the Precious Metals as an opportunity, and the bullion banks in America see them as a bust? I guess if two thirds of the world wanted your precious metals, it would be a great idea to sell them. What a joke. American bullion banks are little more than poster children for the now flat broke American Government. That TRUTH can only be thwarted by the never ending efforts of the American Banking Cartel to diminish the value of the Precious Metals with their CRIMEX scheme of fraud and misdirection.

And let's not forget that today is FOMC interest rate day. The US Federal Reserve will once again come forward with doublespeak about the "growing" US economy, but the need to maintain interest rates near zero. This Precious Metals positive stance by the Fed cannot be allowed to blossom in the public psyche, so the bullion banks must give the illusion through weakness in "price", that the Fed is "doing the right thing", and Precious Metals are a bad investment.

This illusion is now time worn, and few are falling for it any longer. The bullion banks are out of bullets. Successfully shooting down the "price" of Precious Metals is no longer possible because now "demand" for the Precious Metals is no longer determined by price, but by availability. Precious Metals investors smell blood in these markets now. Supply can no longer satisfy demand. In fact, because of the CRIMEX, supply is now negative...and demand is grossly positive. An explosion in the prices of the Precious Metals may be only weeks away now.

As I type this "prices" have fallen further to retest Monday's lows in Gold, and to new lows in Silver. Has this fabricated drop in prices diminished demand for the Precious Metals. Not likely. As a matter of fact, falling prices will only increase demand for the metals. This is being proven out by the Open Interest numbers reported above by Dan Norcicni and Harvey Oragan. If demand were falling with price, Open Interest would be falling with price. So far it has not been. This shows that demand remains firm, and this firming demand poses the biggest threat to the bullion banks survival.

Revel in this absurd activity by the bullion banks at the CRIMEX, they are slitting their own throats by continuing to sell Precious Metals they do not own. Take advantage of their gift, and thank them for their pompous preening. Seriously, if Gold was such a bad investment, why does it NEVER go down in price $10-20 at a time in Asia and London? Only on the CRIMEX does Gold fall victim to these violent and manufactured swings in price. Use them to your advantage.

CRIMEX Leases Sinks From CFTC

Caution is warranted...I'd say. Rumor has it that the CRIMEX goons leased kitchen sinks from the CFTC over the weekend and threw them at the Gold market this morning as punishment for having the audacity to rise higher in response to the news that China "plans" to remove the Yuan's peg to the Dollar.

Many sinks were necessary. One to protect the Fed ahead of their FOMC meeting this week. Another was needed to protect the Gold Cartel shorts ahead of options exiry Thursday. And another was used to protect the US desire to promote MORE economic stimulus at this weekends G20 summit. Apparently, one sink was used to replace the sink thrown at the Gold market in vain last Friday.

This morning's take down in Gold on the CRIMEX is all the proof one needs to confirm the CFTC's complicity in the never ending attempt to suppress the price of Gold AND Silver. Gold rose overnight in Asia on the news that China has "signalled" a desire to release their currency peg to the Dollar. Gold rose through the London Gold market before drifting back to unchanged from Friday for the London PM Gold Fix. Following the London Gold Fix at 10AM est, the CRIMEX goons moved in for the kill pulling bids and sending Gold into a free fall until the CRIMEX closed up shop for the day a 1:30PM.

Completely unwarranted except for the rising Dollar, along with record Open Interest in Gold at over 603,000 contracts. The goons backs were against the wall from selling so much unbacked paper Gold into the market in an effort to meet demand. Fools. Yet, because they are allowed to act above and beyond the law to protect their "hedges", the CRIMEX crooks set out to steal the profits on countless contracts in the money with Gold above 1250, and Silver above 19.00.

If you needed proof that the traditional inverse relationship of Gold versus the Dollar has been re-established, look no further than today's currency market action. Of course one is left scratching their head to explain the US Dollar's bid today. NOTHING fundamental supports today's rise in the Dollar. The list of reasons for the Dollar to fall actually got longer today with China's currency announcement. Yes, the reaction to China's announcement was a bit over stated, but the Chinese currency DID move to a new modern era high versus the US Dollar. The Chinese currency announcement was NOT US Dollar positive. AND IT WAS NOT GOLD NEGATIVE.

I put together a monthly chart of the Chinese Yuan with the price of Gold overlayed on it. It was quite a revelation. In June of 2005, China last unhitched their currency from the Dollar. At that time Gold was trading at $434. China kept the Yuan free of it's Dollar peg until the global financial crisis exploded in June of 2008. As China chose to re-establish the Yuan's peg to the Dollar, the price of Gold had risen to $912. We should expect Gold's rise to accelerate as China follows through on it's decision to once again let the Yuan float in the currency markets, as a rising Yuan will make Gold purchases cheaper in China.



The Bottom line on today's CRIMEX take down of the "price" of Gold. Thanks for the sale prices you f***ing morons. Every time you attack the price of Gold, you give us little people the opportunity to buy the real thing on sale, and leave less for you to cover your foolishly huge short positions in Gold and Silver. Ignore this feeble effort by the Gold Cartel to stop the rise in the price of Gold. The price has closed higher for the last 9 consecutive years...so much for price suppression. Slowing the price of Gold has only given investors a longer opportunity to buy insurance for their wealth. And wealth destruction is just a few weeks down the road now.

CRIMEX Kitchen Now Sink Free

Gold plowed through resistance at 1250 Friday and pushed the door to 1300 open further. Recall that on May 2 I suggested a break of the Ascending Triangle consolidation in Gold at 1178 projected a move towards 1300. Gold subsequently broke through the top of the triangle at 1178, and retested the breakout over the next three weeks. Caution, however, is warranted here.

The CRIMEX beasts are not going to simply let Gold runaway from them...though the potential for just that to occur may be looming. The CRIMEX is facing the daunting task of meeting delivery on all-time record demand this month of June for 2,283,000 ounces. The CRIMEX has ONLY 3,255,000 ounces registered to use to meet delivery demands. 70% of The CRIMEX registered warehouse stocks face delivery demand as of the 30th of June.

Thursday of this week past, the CRIMEX goons threw everything but the kitchen sink at the Gold market in an effort to halt it's rise. Friday, they lost the sink.

On June 6th, Silver broke higher from an intra-day low of 17.18, and has been leading Gold higher ever since. Silver has a strong tendency to make powerful moves ahead of major peaks in the price of Gold. With several technical projections for this current leg up in Gold topping out between 1287 and 1304 we need to keep a sharp eye on the price of Silver and the Gold/Silver Ratio [GSR] in the very near-term.

A close above 19.50 in Silver will most likely force a very quick move up over 20. Resistance in the GSR sits near 62. A close above 19.50 in Silver will most likely coincide with a powerful move higher in Gold, pushing it nearer to 1300. A 1304 top in Gold with a 62 GSR equals a Silver price of 21.03. A 1287 top in this Gold leg with a 62 GSR would equal a Silver price of 20.75.

It is noteworthy also that Jim Sinclair's next "Gold Angel" sits at 1278. This is significant because the previous Gold Angel was parked at 1224, and the previous leg up in Gold topped out at 1226. A Gold price of 1278 with a GSR of 62 would equal a Silver price of 20.61.

July is a delivery month for Silver. With 46 MILLION ounces of Silver still standing for delivery from March and May, July delivery demands at the COMEX might literally break the bank. At present there is ONLY 52 MILLION ounces of Silver registered for delivery in the CRIMEX Silver warehouse. The potential for an unrivalled rise in the price of Silver as we enter July is in place. Physical Silver may literally become impossible to find at any price should delivery demands break the CRIMEX.

The Precious Metals are seasonally weak in the Summer from late June into August. Seasonality factors should be respected, but a number of fundamental factors, coupled with CRIMEX warehouse shortages, may be too much for "seasonality" to depress Precious Metal prices in 2010. Consider these fundamental factors together, and it may be difficult to project any near-term top in Gold at present...

Demand for imports helps widen trade deficit- AP

New jobless claims up sharply as layoffs persist- AP

Election-year deficit fears stall Obama stimulus plan‎ Washington Post

Obama urges G-20 to continue stimulus‎ Philadelphia Inquirer

Peg is dead as China vows yuan flexibility Reuters

Congress ready to tighten the screw on Iran‎ - Financial Times

Recent headlines that all spell uncertainty, and Gold loves uncertainty. China's announcement over the weekend concerning "Yuan flexibility" is noteworthy, but should not be considered an "immediate' catalyst to the Gold price. It does lend substantial uncertainty to the Dollar going forward however as a stronger Yuan will most likely mean a weaker Dollar.

Dave Kranzler of The Golden Truth has some excellent commentary this past week/weekend regarding the "seasonality" of the Precious Metals:

Gold set a new all-time weekly high close against the dollar this past week. The was preceeded by all-time highs in gold in the Swiss franc, British pound and euro. James Turk wrote commentary with some excellent charts to show how the price of gold is beginning to accelerate against global fiat currencies: Gold Starts To Gallop. Mr. Turk sent me the following comment in response to my Friday posting on silver:

A short squeeze is inevitable I believe, and this is a good time to expect one to happen. There seems to be an unusually large focus at present on the precious metal seasonals - summer is normally a weak period for the precious metals. It doesn't always happen that way of course (like in 1982). So a short squeeze could catch a lot of normal longs off-guard if they are waiting to buy the dip that never comes.

I have expressed to colleagues for a while now that I thought there was chance that gold/silver might, contrary to the typical seasonal pattern, stage a surprise move higher in June/July. Sensing that the physical demand in the market is starting to overwhelm the paper selling (just ask Russia), I have been thinking that the market would be set up to take advantage of a price correction that doesn't happen and scramble to re-establish long positions. We'll see how the next 6 weeks play out, but I always feel good about my views when they correlate independently with Mr. Turk's.
http://truthingold.blogspot.com/2010/06/russian-central-bank-gold-purchases.html

Silver: Is A Physical Squeeze Starting To Bubble Up?
The Comex had two large silver withdrawals this week. Yesterday's warehouse stock report showed 1.2mm ounces were removed, 900k of it from the "eligible" inventory, which is the investor inventory being "safekept" at Comex depositories but not available to be delivered. 480k of that 900k was removed from Scotia. With all the discussion and unrefuted (by Scotia) accusations about Scotia's depository safekeeping methodologies, it wouldn't surprise me to see even more gold and silver going forward being taken out of Scotia's customer inventory.

But here's an even more glaring issue: as of last Friday, the net commercial short position in silver, as per the COT report, was 55,329 contracts. At 5,000 ozs/contract, that's 276,645,000 ounces of silver sold short by the big bullion banks (Mostly JP Morgan, HSBC and BNS - and mostly JPM at that). What's the problem? The total silver inventory being reported by the Comex is 118 million ounces. But of that, 66 million is customer inventory not available for delivery, leaving 52 million ounces of silver that can be delivered vs. 276 million of short paper silver.

Let's break it down to just July silver. The July silver open interest is 47,921, which means that there is 239 million ounces of silver that has been shorted for July vs. the 52 million available for delivery. See the problem? Historically JPM could count on the longs to sell their position before first notice of delivery day or tender for cash. If the Comex silver longs start correlating with the trend in the actual physical market, the Comex will default on silver deliveries...

That the physical market in gold and silver is getting tight is not new news. But the above withdrawals from the Comex customer silver inventories this week, in the context of the anectdotal events as described above, can only lead one to believe that an enormous amount of pressure is being created by the trend of big investors demanding physical delivery into private depositories that are trustworthy and not connected to the bullion banks, who are likely leasing out some portion of the bullion in their depositories.

One more interesting development has to do with scrap supplies of gold. In the past, when gold breaks out to new highs, European bullion dealers report the emergence of a large supplies of scrap selling that hits the market. Last January (2009) the flow of scrap into the market was credited with causing the subsequent pullback in price. So far in this latest move, very little scrap supply is being reported.
http://truthingold.blogspot.com/2010/06/silver-is-physical-squeeze-starting-to.html

Gold reclaims its currency status as the global system unravels
By Ambrose Evans-Pritchard
And are we any safer now that the EU has failed to restore full confidence with its €750bn (£505bn) "shock and awe" shield, that is to say after throwing everything it can credibly muster under the political constraints of monetary union? This is the deep angst that lies behind last week's surge in gold to an all-time high of $1,258 an ounce.

The World Gold Council said on Friday that the central banks of Russia, the Philippines, Kazakhstan and Venezuela have been buying gold, and Saudi Arabia’s monetary authority has "restated" its reserves upwards from 143m to 323m tonnes. If there is any theme to the bullion rush, it is fear that the global currency system is unravelling. Or, put another way, gold itself is reclaiming its historic role as the ultimate safe haven and benchmark currency.

It is certainly not inflation as such that is worrying big investors, though inflation may be the default response before this is all over. Core CPI in the US has fallen to the lowest level since the mid-1960s. Unlike the blow-off gold spike of the Nixon-Carter era, this rally has echoes of the 1930s. It is a harbinger of deflation stress.

Capital Economics calculates that the M3 money supply in the US has been contracting over the past three months at an annual rate of 7.6pc. The yield on two-year Treasury notes is 0.71pc. This is an economy in the grip of debt destruction.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/7841961/Gold-reclaims-its-currency-status-as-the-global-system-unravels.html

U.S. Debt and the Greece Analogy
by Alan Greenspan
Don't be fooled by today's low interest rates. The government could very quickly discover the limits of its borrowing capacity.

An urgency to rein in budget deficits seems to be gaining some traction among American lawmakers. If so, it is none too soon. Perceptions of a large U.S. borrowing capacity are misleading.

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

The roots of the apparent debt market calm are clear enough. The financial crisis, triggered by the unexpected default of Lehman Brothers in September 2008, created a collapse in global demand that engendered a high degree of deflationary slack in our economy. The very large contraction of private financing demand freed private saving to finance the explosion of federal debt. Although our financial institutions have recovered perceptibly and returned to a degree of solvency, banks, pending a significant increase in capital, remain reluctant to lend.

Beneath the calm, there are market signals that do not bode well for the future. For generations there had been a large buffer between the borrowing capacity of the U.S. government and the level of its debt to the public. But in the aftermath of the Lehman Brothers collapse, that gap began to narrow rapidly. Federal debt to the public rose to 59% of GDP by mid-June 2010 from 38% in September 2008. How much borrowing leeway at current interest rates remains for U.S. Treasury financing is highly uncertain.

The U.S. government can create dollars at will to meet any obligation, and it will doubtless continue to do so. U.S. Treasurys are thus free of credit risk. But they are not free of interest rate risk. If Treasury net debt issuance were to double overnight, for example, newly issued Treasury securities would continue free of credit risk, but the Treasury would have to pay much higher interest rates to market its newly issued securities.
http://finance.yahoo.com/banking-budgeting/article/109852/us-debt-and-the-greece-analogy?321

Money As Debt[must view video]
This presentation explores how money is created and issued. Money used to be backed by Gold and Silver but today's money is backed by debt - your promise to pay back a loan and the government's promise to back up the currency.
http://video.google.com/videoplay?docid=5352106773770802849#

The shocking TRUTH revealed...if you paid off ALL debt, there would be NO money. All money is directly related to the creation of debt.

To Save America, We MUST End The Fed

Fed dodges bullet as House drops audit idea
WASHINGTON - The Federal Reserve scored a political victory on Wednesday as Democrats mulling financial reform backed off measures that would expose monetary policy to audits and make the head of the New York Fed a political appointee.

The U.S. House of Representatives had approved a bill in December that included a provision, championed by Texas Representative Ron Paul, that would have opened the Fed's interest rate policy to congressional audits.

But in a statement on Tuesday, House Democrats participating in negotiations over a final financial reform bill signaled a willingness to live with a narrower Senate audit provision that does not cover monetary policy.
http://www.msnbc.msn.com/id/37718285/ns/business-us_business/

Over two-thirds of the House Of Representatives approved Ron Paul's bill to audit the Fed. They did so because 80% of the US public wants the Fed audited. It would appear then that "Of the people, by the people, and for the people" is no longer in the lexicon of our democratic government. It's all about what the banks want. After all, they bought and paid for most of the people's Congress.

The US Congress created the Federal Reserve in 1913. The US Congress is therefore directly responsible for the theft of the wealth of our nation by a cadre of crony bankers that have been counterfeiting money for nearly 100 years and charging the government and the people interest on it. This is a capital crime. A crime punishable by death according to the US Constitution.

The Federal Reserve literally holds America hostage. They charge America interest to borrow money to pay the interest on already existing debt. It is a private for profit bank, owned by private stockholders purely for the stockholders profit. There is nothing "federal" about the Federal Reserve, AND it has NO reserves.

Is it any wonder then, that the Fed does not want to be audited? It is an evil and corrupt institution that has bankrupted the United States. Perhaps it is this fact that keeps Congress from exposing the truth about the Fed. Imagine the reaction of the general public were they to learn that a private bank was given control of the nation's checkbook by the Congress, and the Congress did nothing to stop this bank from looting America. If the Fed has nothing to hide, why fight an audit?

The Money Masters - How International Bankers Gained Control of America
"The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. The modern political power structure has its roots in the hidden manipulation and accumulation of gold and other forms of money. The development of fractional reserve banking practices in the 17th century brought to a cunning sophistication the secret techniques initially used by goldsmiths fraudulently to accumulate wealth. With the formation of the privately-owned Bank of England in 1694, the yoke of economic slavery to a privately-owned "central" bank was first forced upon the backs of an entire nation, not removed but only made heavier with the passing of the three centuries to our day. Nation after nation, including America, has fallen prey to this cabal of international central bankers.
http://video.google.com/videoplay?docid=-515319560256183936#

Buying gold in June and July has been very profitable for years
Jonathan Kosares and Randall Strauss of Centennial Precious Metals in Denver have updated Centennial's annual analysis of the success of buying gold during its summer doldrums, in June and July, a practice that over the last 39 years has averaged a gain of 7.5 percent by the end of the year and over the last nine years has averaged a gain of more than 11 percent by the end of the year. The Kosares and Strauss analysis is headlined "Getting Gold: Seasonal Price Trends are Favorable for Summer Purchases" and you can find it at Centennial's Internet site, USAGold, here:
http://www.usagold.com/analysis/doldrums-2010.html

The Honeymoon Is Over

As the public's sentiment for the self anointed messianic leader of the free world turns to crucifixion over the Gulf Oil Spill, the "green shoots of growth" whither in the heat of the summer sun and expose the economic recovery as pure fraud. "Signs" of a recovery now appear empty except to those still dreaming up claims to the contrary on financial bubble vision.

The 14 month Bear Market Rally in stocks is now OVER. In just eight days last month, 6 months of market gains were wiped out as investors exited stocks faster than oil from a broken pipe at the bottom of the Gulf of Mexico. Not that stock prices are an accurate representation of economic virility, but the recent plunge in stock prices certainly will have a negative effect on consumer confidence. It is interesting to note that the "green shoots" theory surfaced in the financial media at about the same time the equities markets bottomed in March of 2009. The only "recovery" we have witnessed the past 14 months has been a recovery in stock prices. On Main Street, there has been NO RECOVERY.

Phase two of a huge secular bear market has now begun. The past 14 months have allowed investors a "second chance" to exit the markets before the bottom falls out. Few will take advantage of the opportunity believing that the next bull market began in March 2009. Many will use the recent fall in equity prices as an "opportunity" to buy at a discount in this new bull market. These investors will be known as those "left holding the bag" as the markets plunge below the previous March 2009 lows.

Statistics are indicating that leverage in the markets today is actually higher than at the bull market peak in equities in 2007. Panic selling induced by margin calls could make the next leg down in stocks fast and furious.

And what has been done to reduce the markets exposure to derivatives? Absolutely NOTHING.

A story on housing last week from the Wall Street Journal said, “Bank repossessions hit a record monthly high for the second month in a row, totaling 93,777–up 1% from April and 44% from last year.” Do record home foreclosures sound like a recovery "gaining traction" as Federal Reserve Chairman Bumbling Ben Bernanke is proclaiming?

Commercial real estate prices continue to decline and are now over 40% BELOW peak values three years ago. Median sales prices of homes have fallen 9.5% further in just the past year to $198,400. Do falling real estate prices add momentum to an economic recovery?

Back in 2009, the White House insisted that the $800 billion government "stimulus" plan, otherwise known as "The American Recovery and Reinvestment Act" (ARRA), was desperately needed to "save" our economy. President Obama promised that the money would go out the door "immediately" and "go directly to job creation, generating or saving 3-4 million new jobs." He claimed that without such massive government spending the US unemployment rate would rise above 8%; implying, that with the ARRA, unemployment would be maintained at or below the 8% rate. Unfortunately, none of the claims Obama and the Democrats made were accurate.

Following the passage of the "stimulus" spending bill the country's unemployment situation got progressively worse. In August 2009 it reached 9.7% and by October 2009 it skyrocketed to 10.1%, the highest number in 27 years. By January 2010, almost a year after the passage of the ARRA, the national unemployment settled around 9.7%. As of April of this year, the rate climbed back up to 9.9%, even with the tens of thousands of temporary workers, 66,000 of them, hired by the government Census Bureau.
http://www.americanthinker.com/2010/05/how_to_cripple_the_free_econom_1.html

An $800 BILLION stimulus, a stimulus as big as a war, and what does America have to show for it? More debt, more empty homes, fewer jobs, and more fear about America's economic future.

And if $800 billion dollars didn't cause enough economic damage, how about several hundred billion dollars more:

Amid Unemployment Crisis, Senate Gridlock Leaves Jobs Bill in Limbo
This week, Senate Democrats will attempt to push through a jobs bill that has stalled in the chamber for seven weeks. Majority Leader Harry Reid (D-Nev.) filed for cloture on Monday afternoon, leaving just days before a vote on the American Jobs and Closing Tax Loopholes Act, or House Resolution 4213, a $23 billion bill to extend federal unemployment benefits and other emergency stimulus measures. The cloture motion signals that Reid believes he has the votes to pass the long-mired legislation. But there are still signs that the contentious, job-saving bill might not pass — leaving people on unemployment benefits, doctors and states in financial limbo.

What is at stake? If Congress does not pass the bill, hundreds of thousands will lose their federally extended unemployment insurance. Doctors will take a 21 percent cut in Medicare reimbursement rates, possibly causing them to drop needy patients. Starting in December, the federal government will provide less backing to the Federal Medical Assistance Percentages program, or FMAP, which provides states with money for Medicaid so that the “poorest of the poor,” in Reid’s words, can see doctors.
http://washingtonindependent.com/86946/amid-unemployment-crisis-senate-gridlock-leaves-jobs-bill-in-limbo

Obama pleads for $50 billion in state, local aid
President Obama urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid "massive layoffs of teachers, police and firefighters" and to support the still-fragile economic recovery.

In a letter to congressional leaders, Obama defended last year's huge economic stimulus package, saying it helped break the economy's free fall, but argued that more spending is urgent and unavoidable. "We must take these emergency measures," he wrote in an appeal aimed primarily at members of his own party.
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/12/AR2010061204152.html

US money supply plunges at 1930s pace as Obama eyes fresh stimulus
By Ambrose Evans-Pritchard
Larry Summers, President Barack Obama’s top economic adviser, has asked Congress to "grit its teeth" and approve a fresh fiscal boost of $200bn to keep growth on track. "We are nearly 8m jobs short of normal employment. For millions of Americans the economic emergency grinds on," he said.

The White House request is a tacit admission that the economy is already losing thrust and may stall later this year as stimulus from the original $800bn package starts to fade.
http://www.telegraph.co.uk/finance/economics/7769126/US-money-supply-plunges-at-1930s-pace-as-Obama-eyes-fresh-stimulus.html

$273 BILLION more on "stimulus spending"? Isn't the definition of insanity doing the same thing over and over and expecting a different result?

$800 Billion Dollars was supposed to "create or save 3-4 million jobs and KEEP unemployment below 8%". How is $200 BILLION more going to resolve 8 MILLION job losses?

The Obama administration is now proving beyond a shadow of a doubt that not only do they lack the experience in dealing with an economic crisis, but they have no clue how to solve an economic crisis caused in large part by the administrations very own economic advisers, Federal Reserve Chairman, and Treasury Secretary.

The private sector and Main Street are the engine of the economy. Unless, and until, the Obama administration wakes up to this fact and ceases their drive towards a socialist state here in America, we are doomed to follow Europe down the drain towards national bankruptcy.

Isn't it a bit disingenuous for the US Treasury Secretary to run around Europe espousing fiscal restraint and austerity while his own government at home prints money as fast as it can and distributes it freely not only at home, but around the World?

With the honeymoon beginning to wane, bullish sentiment for the US Dollar appears to be peaking as the TRUTH about America's own fiscal problems begin to fill the headlines. The pending bankruptcies of 33 states will make the European Union's woes look like child's play. The rush to the perceived safety of the US Dollar and US Treasury Debt will begin to be called into question shortly by investors seeking refuge from the global financial storm. With the US recognized as a more severe soverign debt risk than Europe, the Euro will catch a bid as Euro shorts cover and turn their sights on the shortcomings of the US Dollar. The race to the bottom of the fiat money barrel will slow for the Euro and accelerate for the US Dollar in the second half of 2010. Should the Chinese choose to revalue their currency higher later this year, the Dollar's woes will become exponentially worse heading into 2011.



As Gold bottomed in yet another bear raid Thursday morning at 10AM, an interesting turn in the recent Dollar/Gold relationship appeared to be reverting back to it's "normal" inverse relationship. For many weeks now, Gold has moved higher in price with a rising Dollar as the Euro's debt woes demolished it in the currency markets. Should currency traders do a 180 on the Euro here, the Dollar could be in for some magnificent weakness as the second half of 2010 approaches. This would be extremely positive for Gold and in particular Silver.

Silvers recent realtive strength versus Gold was very evident last week. Several weeks ago I suggested that it would be Silver that lead the next leg higher in Gold. We may be seeing the beginning of just such a reaction in the Precious Metals now. It is noteworthy that the Gold/Silver ratio peaked at 70 on June 4th, and has been falling since, as the price of Silver has steadied and begun to rise again relative to Gold. Just last week, Silver was up 5% to Gold's 1%.



The Dollar is testing key support at the 40 day moving average at 85.95. Should support give way here, a quick move to the 50% retracement of the mid-April to June leg up in the Dollar would be almost certain. Price support at 85.13 would lie below there as the last defense of the Dollar falling all the way back to it's May breakout at 82.22. I would consider a bounce in the Dollar near 85.13 likely, and a quick run back up to the 40 day moving average where the Dollar will be stopped cold and begin a decent that could last the remainder of 2010.

This scenario in the Dollar will prove critical if the men behind the curtain hope to maintain the illusion of a recovery going into the mid-term elections in November. A weaker Dollar is the only hope for these Money Masters to keep the equity markets afloat thru the Summer and into Fall.