RANTING ANDY – It’s Ranting Andy reporting from GATA Gold Rush in London which, after Day 1 of the proceedings, has PROVEN my assumption it would be the MOST IMPORTANT FINANCIAL CONFERENCE EVER. The crowd includes among the most concentrated group of “SMART, GOOD PEOPLE” I have ever been around, giving one strong presentation after the next and instilling a growing sense of EMPOWERMENT in the conference’s roughly 400 attendees.
The loudest applause was generated for industry icon Jim Sinclair, whose words of philanthopic wisdom nearly brought me to tears. But his presentation was equalled in resonance by Precious Metal luminaries such as John Embry, Eric Sprott, Peter George, and James Turk, young guns like Ned Naylor-Leland and Ben Davies, and stalwart GATA lifers such as Adrian Douglas, Ed Steer, and James McShirley. Day 2 promises to be equally enthralling, headlined by Mexico’s long-time silver crusader Hugo Salinas Price, gold Cartel litigant Reg Howe, global banking expert Jim Rickards, and of course CFTC whistleblower Andrew McGuire.
The conference has truly been blessed with a star-studded cast, as well as exquisite timing given its overlap with the obvious commencement of the END GAME for fiat currencies. The Savoy Hotel walls contained participants’ focus on these wonderful speakers, but outside the unfurling of the 40-year old, failed global fiat expirement gained momentum. One never knows what event will trigger a cataclysm, but in this case it looks like collateral damage from the U.S. debt ceiling catastrophe (per my July 9th RANT, “Debt Ceiling Debacle – Death Blow to America”) and the spreading of the PIIGS contagion to its largest member, Italy, may one day be remembered as such events.
While INSIDE Jim Sinclair espoused on the destructive force of over-the-counter derivatives, OUTSIDE the debt securities of Italy, Spain, and Portgual collapsed under the weight of swarming credit default swaps. I do not believe the Euro currency will survive this destructive event, occurring just 12 years after it was first introduced in 1999, and consequently millions of Europeans are likely to experience dramatically higher inflation in the coming years.
I can not imagine a greater irony than watching a market panic occur while GATA espouses its story for the world to hear, as 31 different countries are being represented at this conference. And by the way, Andrey Bykov of Russia is indeed here, no doubt to validate the reasons behind Russia’s 400 tonnes of gold reserve additions since the last GATA conference in 2005, as well as to phone in an order to buy an additional 400 tonnes.
Meanwhile, gold rocketed higher to close Friday at $1,664/oz, an ALL-TIME HIGH despite some of the most blatant Cartel desperation attacks I’ve ever seen (at EXACTLY 12:00 PM EST on both Thursday and Friday, by the way), as well as MASSIVE, OVERT intervention by the Bank of Japan to prop up the dollar against the Yen.
And if those events were not enough to make your hair stand up, late on Friday night Standard & Poor’s officially downgraded U.S. Treasury debt from its long-standing AAA rating to AA+, representing a major step toward investors’ inevitable abandonment of bonds as a safe haven investment.
We all know S&P, Moody’s and the whole lot of ratings agencies are a bribed group of shills, whose sole job is to ingratiate the firms (and sovereigns) that pay them, and just the fact they still had the U.S. rated AAA this late in the game should tell you how useless they are. But downgrading the supposed best credit in the world is no small political task (S&P execs should look over their shoulder this weekend), and is SURE to have massive ramifications on interest rates and investor perceptions in the weeks and months ahead.
There is LITTLE, IF ANY DOUBT we will see a spirited, and potentially disorderly rise in the only REAL SAFEN ASSETS on earth this fall, i.e. GOLD and SILVER, coupled with the first discernible signs of FEAR in the populace regarding the future direction of America’s finances. This movement can quickly snowball, and if so it will be extremely difficult for the gold Cartel to maintain the status quo of gold and silver price capping.
In turn, prepare for the potential for GLOBAL FINANCIAL MELTDOWN II to commence, with a slew of potential negative catalysts waiting in line for their turn at the headlines.
And one final note before heading back to the Day 2 proceedings, as regards the potential for another “Sunday Night Special” this week, which would represent the THIRD STRAIGHT WEEK of such emergency government/Fed/banker meetings. Unlike the past two weeks, as well as most of the 2008-09 Sunday night episodes, there will be no specific issue to fix, such as raising the debt ceiling to avoid imminent default.
Instead, the focus would shift toward the cumulative ramifications of the S&P debt downgrade Friday night, the ongoing PIIGS collape, and the collapsing U.S. economy and stock market. Don’t be surprised to see some type of QE3 announced in the coming weeks, potentially even next week if we turn on the screens Sunday night to see further panic selling, particularly in European Treasury bonds.
I cannot emphasize how DANGEROUS this situation is becoming, and thus how IMPERATIVE it is to PROTECT YOURSELF from potentially difficult and trying times, including both surging unemployment and rapidly rising inflation.