RANTING ANDY – OMG, Bernanke is going to speak….I’m so scared!
Such a brilliant, powerful man, who moves markets and mountains with a few words from his quivering lips.
Gee, I wonder what he’ll say, I’m biting my nails in anticipation. Perhaps he’ll save the world with QE3, or maybe destroy it by simply continuing to keep interest rates at zero for two more years (plus trillions of UNREPORTED QE3, of course)….
This whole Jackson Hole thing represents all that is wrong with America, and why it is in the last stages of terminal disease. To think that, while the economy collapses, unemployment explodes, and the cost of living inexorably rises, Bernanke and the nation’s “leading bankers” (talk about an oxymoron), receive a taxpayer-paid vacation to a lavish resort (with printed money, as the Treasury is broke), to do nothing else than discuss what they just discussed three weeks ago, and what they will again discuss three weeks hence.
I’ve given roughly 99% odds that they’d say the EXACT SAME THING as they did at the last Fed meeting, which is that the economy is weak, but don’t worry it will improve, we will keep interest rates at zero and remain vigilant about potentially using our arsenal of monetary tools, blah, blah, blah….
Yes, they could scream “MY GOD, WE NEED QE3 NOW”, but in this game of orchestrated politics that would be quite a credibility hit given that just three weeks ago they said we didn’t need QE3 (of course, last week Bank of America said it needed no new capital, but that’s another story). But the Fed’s game, given that it is run by the bankers whom (literally) own the Fed, is one of CONFIDENCE, so they’ll be happy to sacrifice the stock market in the short-term and wait for the POLITICIANS to BEG for QE3. At which point, they’ll happily get it. Oops, it looks like Biden just asked for it before I could get halfway through this article (http://www.reuters.com/article/2011/08/26/usa-biden-idUSN1E77P0H920110826).
Unfortunately for this strategy of orchestrated manipulation, there’s a little monkey wrench in the system called GOLD, which no longer responds to the GOVERNMENT COMPUTER ALGORITHMS that try to tie stock market movements to gold and silver whenever it has a serious decline. It worked beautifully in 2008, when the U.S. government (Gold Cartel/PPT/ESF/Fed/Treasury/JPM/Goldman/BOE/ECB/BOJ) tricked the uninformed public (and many Central Banks) into believing the “deflationary crash” hype. Thus, when the Cartel illegally attacked PAPER gold and silver prices each morning at their favorite times of 3:00 AM, 8:20 AM, and 10:00 AM, market participants actually believed the daily PM PLUMMETS were due to an upcoming conflagration in which EVERY asset on earth declined in value against the almighty dollar. Thus, promulgating the deflationary scare.
BUT IT DOES NOT WORK ANYMORE!!!
And why not? Because ALL government tools to maintain the status quo have been exhausted, to the point that ALL they have left is the ability to print money at will, which will only last a short time longer, in my opinion, once the world realizes what I realized years ago…the U.S. is WAY BEYOND the point of no return.
Even the MONEY-PRINTING is dramatically less useful than before, particularly in the most important manipulative arena of all – PRECIOUS METALS. Turning off the Precious Metals “barometer of bad tidings” was the centerpiece of the U.S. “strong dollar policy”, as well as, frankly, the “strong fiat currency” façade pulled over the eyes of the world by bankers and politicians for the past decade (actually longer, but no one paid attention until the “Great Era of Prosperity” ended in 2000).
Between 1974 and the stock market crash of 2000, which coincided with the peak of the U.S. dollar and U.S. global hegemony, the correlation between the S&P 500 and gold was -0.09, in other words essentially no correlation at all. This is what the relationship SHOULD be between the market for REAL MONEY and PAPER STOCKS in normal market conditions, shifting to STRONG NEGATIVE correlations during times of stress such as 2000-02 (-0.65) and, CONTRARY TO THE ONGOING PROPAGANDA, at the height of the 2008-09 meltdown (-0.44).
Once the Cartel’s initial attack on gold and silver at the onset of GLOBAL MELTDOWN I in September/October 2008, gold rocketed higher over the next four months, from $680 to $1,000, while the S&P crashed from 930 to 730, amidst bailouts of everyone from AIG to Fannie/Freddie to Citigroup to Warren Buffet’s favorite “profitable” company, Bank of America http://www.syracuse.com/news/index.ssf/2009/01/bank_of_america_to_get_20_bill.html. All in, the correlation between the S&P 500 and gold from November 2008 through February 2009, conceivably the worst economic crisis in U.S. history (UNTIL NOW) was -0.44, not far from the correlation of the PAST TWO MONTHS of -0.69.
To summarize, 36 years of data shows the correlation between gold and the stock market to be essentially zero, but in EVERY period of major economic stress over the past decade, gold and silver have dramatically outperformed collapsing stock markets, including this summer’s “doldrums”, during which we have seen one of the strongest negative correlations (-0.69) recorded over the aforementioned 36 years!
So let’s see what actually happened this morning…
What a shock, the Bernank said EXACTLY what he said three weeks ago, adding in a few desperate cheerleading phrases such as “no long-term damage has been done to the U.S. economy” and “inflation is expected to settle below 2%.” The stock market immediately fell 200 points before being rescued by the PPT, and then did so AGAIN before being rescued AGAIN. Meanwhile, gold has been attacked viciously no less than FOUR TIMES in the past two hours, but STILL remains up $12 on the day, ready to rocket higher the SECOND the Cartel takes their foot of the pedals for a coffee break (can’t wait until 12:00 PM EST, just FIVE MINUTES from now). It should be quite a WAR to end the week with a semblance of perceived CONFIDENCE in the Fed’s policy, with EVERY OUNCE OF Cartel/PPT/ESF firepower being manipulatively thrown at the markets to end the weekend with “worries about the opening of Asian markets Sunday night.”
But outside of today’s comedic drama (replete with, you guessed it, a worse than expected GDP revision), we are now heading into the most dangerous time of year, when the “summer doldrums” (LOL) end, and investors the world over return to their desks knowing full well the Western economy is collapsing across the board, with essentially every Central Bank monetary bullet already shot.
The U.S. economy will shortly decline into “official” recession, as even the best data manipulation tactics on earth will not achieve a positive result, and in Europe it is conceivable that a major sovereign default will be announced by year-end, and possibly the first steps toward the splitting of the European Community (as in no more Euro). Simultaneously, the gold price will mercilessly rise despite every manner of Cartel attack possible, while silver will break through the massive 30-year resistance level of $50/ounce, to never look back. And when it does, the “barometer of bad tidings” will trade freely for a time, certainly long enough to reinstitute the 6,000 year-old genetic mindset about the difference between FIAT CURRENCY and REAL MONEY, i.e. GOLD and SILVER
It is at this point when the ENTIRE WESTERN WORLD will be universally recognized as having passed the point of no return, and consequently when the long-awaited MASSIVE changes to the status quo will occur. Collapsing markets, soaring unemployment, civil unrest, inexorable inflation, and draconian political decisions will become the norm, and if you haven’t properly PROTECTED YOURSELF beforehand, the chances are you will be enveloped by the maelstrom.