Ranting Andy: Checkmate, i.e. “Manipulation Saturation”

RANTING ANDY – So here we are, at the very end of a decade-long journey through hell, which was destined to end more horribly than it began.

It all started in 2000, when the “Age of Stolen Prosperity”(thanks Jim Willie) under Clinton, Greenspan, and Robert Rubin’s “Strong Dollar Policy” (i.e. surreptitiously selling the Fort Knox gold) ended with the commencement of the Tech Wreck.

It gained steam in 2001 following 9/11, when the combination of an economic downturn, Bush’s “War on Terror”, an acceleration of the American jobs exodus to China, and continued financial deregulation sowed the seeds of the maniacal surge in money printing and debt issuance that has brought us to the abyss we stand at today.

It accelerated further with the popping of the Real Estate bubble in 2007, and went into hyperdrive when fraudulent bank balance sheets were called out in 2008, leading to the FIRST PHASE of the GLOBAL FINANCIAL MELTDOWN in 2008-09.

And it all ends here in 2011, as a perfect storm of negative events converge to engender global hyperinflation (more so in some places than others) and the end of the 40-year failed expirement in a worldwide,fiat-based monetary system.

The definition of “checkmate” is as follows:

check·mate  (ch k m t )

1. To attack (a chess opponent’s king) in such a manner that no escape or defense is possible, thus ending the game.

2. To defeat completely.

n.

1.

a. A move that constitutes an inescapable and indefensible attack on a chess opponent’s king.

b. The position or condition of a king so attacked.

2. Utter defeat.

And why do I bring this up? 

Because the U.S. government has run out of moves, and thus the GAME IS OVER!

There is NOTHING left to prop up the economy (in reality or fiction), as debt saturation has now set in (the economy now CONTRACTS when debt expands).

There is NOTHING left to “kick the can down the road”, as all means (reduced interest rates, deficit spending, currency/stock/bond/gold manipulation, falsifying economic statistics) have been exhausted.

There are no more PARTNERS to exploit, as the ENTIRE WORLD now HATES America for all the damage it is done via military imperialism and abuse of the global “reserve currency.”  Moreover, the Japanese are now SELLERS of U.S. bonds to fund their reconstruction (thus, destroying the cancerous “carry trade”) and the Chinese will no longer add materially to their dollar positions, which they are desperately trying to offload into COMMODITIES as fast as they come in.

There is no more believable PROPAGANDA to employ, as even the dumbest of the sheeple are starting to realize that something is very wrong, and getting worse each day.

And the COUP DE GRACE is the ultimate “Checkmate” situation, when, in REAL TIME, the U.S. government has painted itself into the ultimate corner, forcing a “Hobson’s Choice”, or “Sophie’s Choice” for movie connoisseurs.  This situation was created by decades of arrogant, selfish, insanely stupid behavior by a handful of global “elites” (also facetious) headquartered in Washington, New York, and London, and will go down in history as among the greatest of all human follies.

Either the U.S. government raises the debt limit, essentially admitting overt QE3 and certain near-term hyperinflation, or fails to do so, inviting immediate default, exploding interest rates, and an immediate global economic collapse that would dwarf the combined strength of the 1930s depression and the 2008-09 meltdown, replete with massive bank liquidations, a collapsing dollar, hyperinflation, and violent social unrest.  Either way, these horrors await the American public imminently, as well as many other Western nations that followed the U.S. down the rabbit hole, particularly “leading powers” in Europe such as the UK, Spain, Italy, and France.

Die hard Precious Metal bulls like myself, whom have been fighting this war for the past decade, have become extremely jaded by the Cartel’s non-stop attacks, to the point that we are expecting a new one each time we look at the screen and calculating when the next major operative will be launched.  We were all shocked to survive this week’s COMEX options expiration, including today, the infamous “day after”when the Cartel typically smashes gold and silver if they were fortunate enough to get through options expiration (yesterday) with numerous call options in the money.  Ah, as I’m proofreading this the “day after” smash has just occurred!

And we are already thinking several moves ahead regarding the Cartel’s typical attack points, such as before and during next week’s employment report, the next G-7 meeting, and, of course, THE AUGUST 2^nd DEBT CEILING DEADLINE! 

I find it hilarious to read just how many of us are expecting a major gold smash when an “agreement” is reached, as if agreeing to raise the debt limit is somehow negative for gold (LOL).  The thought process is that the media will try and hype the recent gold price surge (LOL, still no 1%+ up days) as SOLELY due to debt ceiling AGREEMENT uncertainty, as opposed to general uncertainty about the collapsing economic and monetary situation (not just in the U.S., but EVERYWHERE).  Our team skeptically believes the Cartel is waiting to triumphantly announce a “deal”, simultaneously dump thousands of paper gold and silver contracts, and get the media to start trumpeting another wave of “gold bubble” stories to try and create yet another smash.

This is what typically happens during any time of crisis, but this time I don’t think they have a Chinamen’s chance in hell of causing a significant negative splash.  For one, they TWICE last week tried to smash Precious Metals with identical “positive rumors” of debt ceiling agreement, only to watch gold and silver recoup all their gains the very next day.  Secondly, more and more worldwide investors realize the “Sophie’s Choice” nature of this dilemma (of which both choices involve soaring gold prices), and finally, word is rapidly spreading around the investment world regarding the blatant PAPER manipulation of gold and silver that takes place in the U.S. markets each and every day.

As far as I’m concerned, the below chart says it all.  Just as “debt saturation” has been reached regarding the ability to manipulate the economy with increased debt, I believe “MANIPULATION SATURATION” has set into the Precious Metals markets.  In other words, no matter how many naked PAPER shorts they throw at gold and silver (COMEX contracts, derivatives, GLD/SLV, large-cap mining shares), they will NEVER again be able to foster another MATERIAL decline in the metals.

EVENT	DATE	REFERENCE POINT	TIME INTERVAL BETWEEN EVENTS
D-DAY	November 9, 2010	CARTEL PHYSICAL CRISIS #1	–
SUNDAY NIGHT PAPER SILVER MASSACRE	May 1, 2011	CARTEL PHYSICAL CRISIS #2	173 days
3:40 PM SILVER PRICE SMASH	June 1, 2011	CARTEL PHYSICAL CRISIS #3	31 days
OPERATION POST FED PM/OIL ANNIHILATION	June 23, 2011	CARTEL PHYSICAL CRISIS #4	22 days
GOLD BREAKS OUT IN EUROS – DESTROY IT NOW!	July 11, 2011	CARTEL PHYSICAL CRISIS #5	18 days
BERNANKE ADMITS QE3 COMING/PHYS OFFERING	July 13-18, 2011	CARTEL PHYSICAL CRISIS #6	2 days
DEBT CEILING CRISIS PM ATTACK #1	July 19-20, 2011	CARTEL PHYSICAL CRISIS #7	1 day
DEBT CEILING CRISIS PM ATTACK #2	July 21, 2011	CARTEL PHYSICAL CRISIS #8	1 day

Mind you, I didn’t say they couldn’t cause short-term declines (such as the mini-attack, right after 10 am EST, as I proofread this), which trust me they will continue to attempt every second of every day until they are permanently destroyed (particularly at 3 am EST, 8:20 AM EST, 10 AM EST, and 12 PM EST).  But NEVER will they be able to create a MATERIAL decline, and frankly I’d be shocked if we see gold under $1,500/oz EVER AGAIN, or even $1,550 for that matter.

And before I end this RANT, I felt I’d add a quick “to do” list to prepare for the coming tsunami (waters receding already), as I am now constantly asked for the best ways to prepare.  Many of these answers have been given in previous RANTS, but I figured I’d list the most important ones here:

Keep ONLY enough “cash” to pay your bills.  The rest of your “cash” should be held in the form of PHYSICAL gold and silver, an account at goldmoney.com, or in the closed-end bullion funds CEF, GTU, SVRZF (or SBT.T in Canada), PHYS, or PSLV).  And those closed-end funds MUST be kept in BROKERAGE accounts of brokerages NOT CONNECTED IN ANY WAY to BANKS.  I prefer Charles Schwab, which has low commissions and a rock-solid balance sheet (as well as an excellent online bill-paying function).

DO NOT EVER OWN GLD OR SLV!  I believe 100% that these are frauds which will one day be recognized as WORTHLESS.

DO NOT KEEP ANY MONEY IN BANKS except a token amount for convenience (ATM withdrawals, money orders, etc.).  Banks are in grave danger of being closed for bank holidays (freezing your assets), and even greater insolvency risk if and when the public demands realistic accounting rules (such as those employed before 2009) that require proper accounting for failed mortgage assets. 

DO NOT KEEP VALUABLES IN SAFE DEPOSIT BOXES!  During a bank closure or “holiday”, the government reserves the right to do what it wishes, and the last thing you want is for them to take peep around (or confiscate) your valuables.  The best advice I can give is to securely store your valuables on your person, in your home, or in selected, secure overseas jurisdictions.  If you buy a safe, for gosh sakes BOLT IT DOWN and do not tell anyone except those who NEED TO KNOW you have them.

CASH OUT ANY AND ALL IRAs, 401ks, and OTHER RETIREMENT ASSETS (such as Pensions with lump sum cash-out options) NOW!  I cannot emphasize how strongly I believe the government will confiscate these plans in one way, shape, or form in the coming years, perhaps even in 2012 (or 2013, when an even more draconian President takes office).  You will be paying income taxes on these assets anyway one day, and most likely by the time you do tax rates will be dramatically higher.  Thus, all you are really “paying” to extract those assets is the 10% penalty if you are under 59 ½ years old, a pittance in return for the freedom to control your assets and keep them out of the toxic system.  And of course, my #1 recommendation is put the proceeds of those withdrawals into PHYSICAL gold and silver.

Have a healthy store of FOOD, WATER, and OTHER LIFE NECESSITIES to tide you over through the initial stages of hyperinflation, which I ASSURE you are coming soon to American (and other) shores.  And keep in mind that the “initial stages” could last a year or more.  Costco, mredepot.com, and honeyvillegrain.com are great places to build food stores from, and you can buy “gamma seal lids” and FDA approved grain storage buckets (although Home Depot “Homer” buckets should suffice) at freckleface.com.

Think long and hard about PERSONAL SECURITY, such as an advanced alarm system and/or firearms.

And above all, SIMPLIFY YOUR LIFESTYLE as best you can, focusing on a “defensive” financial and social posture as we move into the unchartered and dangerous waters of economic collapse.

Readers, there are obviously many more things one can do to PROTECT THEMSELVES from the oncoming surge in inflation.  It is up to YOU to decide how much you want to do, but for gosh sakes, PLEASE DO SOMETHING, and do it NOW!

Gotta go, looks like the Cartel just enacted their response to PHYSICAL CRISIS #9 while I wrote the last three bullet points above (literally, a $7 drop in gold and $0.40 in silver in a matter of two minutes with NOT AN INCH OF MOVEMENT in ANY other market)!