RANTING ANDY – As you can probably tell by now, I am a HUGE Star Wars fan, of all six movies, the Clone Wars animated series, and essentially anything related to George Lucas. Aside from the visionary movie making, which to this day remains well ahead of its time, I identify most with the battle between good and evil, particularly because the GOOD winds up winning. Star Wars is a great parable of life in general, as EVIL is ALWAYS more widespread and powerful than GOOD, and often requires a superhuman effort from the diehard rebels to win the day (WHICH WE ARE, AND WILL!).
Moreover, you’ve probably noticed from my writings that I go to the gym most every morning at 5 am, which provides the FUEL for powering me through my busy days. That workout is SACRED to me, so it takes A LOT to get me to miss it, and even more to leave it early once I’ve started. But I’ve done so today, and with good reason as I wanted to comment on the new “Death Star Weapon” the Gold Cartel has trotted out in its last, most desperate days.
Before I do so, I want to recap what has “happened” in the past few DAYSs:
Collapsing stock markets, led by Major banks across the entire Western world
- Rising credit default swap spreads, in many cases to record highs, for the aforementioned banks and essentially all Western sovereigns
- Shockingly horrible economic data in both the U.S. and Europe, including the catastrophic U.S. jobs report on Friday
- The U.S. government AGAIN breaching its debt ceiling, to NO FANFARE AT ALL!
- Obama preparing a speech where he will propose additional, MASSIVE SPENDING with printed dollars on non-productive infrastructure jobs (word is it will be $300 billion)
- The lordly Swiss National Bank PEGGING ITS SUPER-STRONG CURRENCY to the COLLAPSING EURO, eliminating one of gold’s ONLY “competitors” as a safe haven
- Wikileaks disclosures that the Chinese are well aware of the U.S./European policy of surreptiously (and illegally) suppressing gold prices, and that the U.S. government KNOWS the Chinese know this!
- The commencement of September, with just two weeks until the Fed meeting where a QE3 announcement is nearly certain, and three weeks until Europe likely approves creation of the ESFS, a €4 trillion fund printed out of thin air to bail out PIIGS
- News that China is now planning to end its policy of monetary tightening, and go back to EASING again (http://www.bloomberg.com/news/2011-09-07/china-likely-to-ease-money-policy-journal-says-correct-.html)!
Yes folks, this list, which is far from complete, lists just what has happened since FRIDAY! On its own, EACH item on this list would yield a SOARING gold price if the market were freely-traded, and combined this is an even more potent brew with the potential to COLLAPSE THE ENTIRE FINANCIAL SYSTEM ITSELF, let alone the gold Cartel. So if anyone is “worried” about today’s MOB HIT ON GOLD AND SILVER, put yourself at ease and use yet another government-engineered “flash crash” to LOAD UP on Precious Metals, as much as you possibly can!
The Cartel are MASTERS at what Jim Sinclair calls MOPE, or Management of Perspective Economics. It is all about PUBLIC PERCEPTION, which is particularly easy because the public, on average are either stupid, blissfully ignorant, or willfully ignorant. The media is even dumber, and in most cases (look at how deeply Rupert Murdoch has delved into “the system”) conniving to separate you from your money and votes (note the Ron Paul media blackout, for example).
The Cartel knows that the past decade’s propaganda regarding gold’s role in the monetary system (a “barbarous relic that can’t buy groceries”), Wall Street’s conspiratorial HATRED of Precious Metals (they compete with the PAPER assets they are selling), and the NON-STOP WATERFALL ATTACKS have obliterated the public’s ability to even ask intelligent QUESTIONS about gold and silver, much less invest in them (but don’t worry, they eventually WILL).
Regarding the latter, the same ATTACK patterns exist today as a decade ago, particularly the enigmatic, counterintuitive PLUMMETS, gold’s innate ability to COLLAPSE within days, if not hours, EACH AND EVERY TIME it makes a new high, and of course the constant battering of the mining shares, which even when they, too, are making new highs appear to always be plummeting. Take it from me, the 24/7 nature of these coordinated attacks takes a significant psychological toll, and represents a MAJOR reason why the sector has so much trouble building momentum.
Despite all this torture, the fact remains that Precious Metals continue to outperform ALL ASSET CLASSES ON EARTH, year after year and year, and will do so AGAIN in 2011 and AGAIN in 2012 and 2013. Take a look at the eleven year charts for gold, silver, and the HUI, if you don’t believe me, below.
A great way of summarizing the counterintuitive action of the markets is the following – the DOW is NEARLY ALWAYS GREEN, but NEVER GOES UP, while PRECIOUS METALS are NEARLY ALWAYS RED, but NEVER GO DOWN! Yes, the Riddler would be proud, but no statement could be more true: the PRIMARY TREND of the DOW has been DOWN for the past decade, but the government is there trying to prop it up, unsuccessfully, EVERY DAY, while the PRIMARY TREND of PRECIOUS METALS has been UP for the past decade, despite the government attacking it 24/7.
In my view, the fundamentals for gold and silver are DRAMATICALLY stronger now than even a year or two ago, much less a decade, so we are still in the second or third inning of an extra inning game. Heck, we’re in a cricket match that lasts days on end, with the ultimate result being gold and silver REINSTATED AS OFFICIAL CURRENCIES, NEVER to come down to the current levels (or anywhere close) again.
Hopefully that assuages DOUBTS that YET AGAIN the Cartel has implanted in your brains, enough so to forget that just 24 HOURS ago gold hit a NEW ALL-TIME HIGH of $1,920/ounce, or that just three weeks ago gold hit a then ALL-TIME HIGH of $1,913/ounce, was smashed to $1,702/oz. in a matter of FOUR DAYS, yet rebounded to the aforementioned $1,920/ounce in just FIVE DAYS, BEFORE most of the items on that horrific list atop this RANT even occurred!
As for the topic of this RANT, I wanted to address what appears to be a new, desperate gold Cartel tactic, one even I hadn’t seen yet.
Changing their M.O. has been part of the Cartel playbook for years, utilizing a tactic as long as it works before moving to something new, just as the BORG, to use some Star Trek lingo, constantly “adapts” to dangers such as phaser frequencies. We have seen literally dozens of Cartel “adaptations” over the past decade, with each new version more intense. The times of day when attacks are most likely have certainly changed, such as the addition of the 12:00 pm EST “cap of last resort” over the past year or two, although some times (such as the 3 AM EST attack, as we saw yesterday) seem to never change. Another past tactic, for example, was relying on rumors about bin Laden being captured or the IMF ready to sell gold, which worked like a charm in 2004-2009, but lost its impact late in the game, and obviously are no longer usable.
And of course we saw a MAJOR tactical change on November 9, 2010, or “D-DAY” as I have referred to it in numerous RANTS. That was the day silver first approached $30, with Precious Metal mining stocks (particularly SILVER equities) ROCKETING higher on MASSIVE VOLUME, threatening to commence the long-awaited mining mania which could have taken the Cartel down within weeks. That was when HFT programs were applied to the large-cap mining stocks to slow them down, while simultaneously the Cartel realized that 2011 would be unlike any PM battle to date. Subsequently, additional desperation tactics were added to the mix, most notably the CONCERTED, HOLIDAY WEEKEND PLOTTED, VIOLENT ATTACKS such as we saw following the Good Friday weekend (SUNDAY NIGHT PAPER SILVER MASSACRE) and what we are witnessing today (actually yesterday AND today), OPERARTION POST-LABOR DAY, START-THE-FALL POSITIVELY WITH A VIOLENT PM ATTACK.
In fact, if you look at the chart of the past two days, you’ll see NOT ONE, NOT TWO, but THREE separate, MIND-NUMBING attacks! The first commenced at, you guessed it 3 AM EST Tuesday night despite global stock markets crashing with good reason, where gold’s meteoric rise to $1,920/oz. was capped until it stabilized an hour later, when the Cartel PULLED ALL BIDS and took gold down $35 in roughly THREE MINUTES. Actually, this takedown occurred just MINUTES before the Swiss revaluation announcement, a MASSIVELY GOLD-BULLISH EVENT which likely would have taken it to $2,000+ within a matter of hours (which is PRECISELY why it was timed then). When that action FAILED, with gold rising back to $1,907 just SEVEN HOURS LATER, they went into action AGAIN, this time just before our favorite time, 12:00 PM EST, when they took gold down, again for ABSOLUTELY NO REASON, by another $40 in the space of 20 minutes. Readers, I have watched this SAME TACTIC over and over for YEARS, in which gold ALL-TIME HIGHS are STOPPED COLD at 3 AM EST, and viciously fought until finally the longs “break” in COMEX hours to PROTECT THEMSELVES from further losses.
Why these morons continue to trade on the COMEX is beyond me, and frankly I hope they are all wiped out so gold and silver OPEN INTEREST, per my RANT this weekend, continues to PLUMMET and eventually make the COMEX obsolete. In fact, that very topic was addressed in a brilliant article last night by Ted Butler, titled “The Death of Liquidity” (http://news.silverseek.com/SilverSeek/1315318111.php). But NO WORRIES GOLD WARRIORS, the COMEX WILL lose its POWER over the MARKETS, and a lot sooner than most people think!
To finish the topic of the this latest “attack formation”, keep in mind that despite the TWO MASSIVE ATTACKS yesterday, GLD still closed down a measly $3 yesterday from its Friday afternoon close, hovering around $1,880 and WAY TOO CLOSE to the $1,920 high for the Cartel’s comfort. So here’s what they did:
They KNEW the media was talking warily about this morning’s German vote regarding the legality of Eurozone bailouts, painting a picture of potential catastrophe and tying the past two days’ stock market declines to the “expectation” that they would vote NO. Pure gibberish, particularly as amazingly the DOW wasn’t even down 1% while the rest of the world crashed 6%, and had yet another mysterious “Hail Mary” rally at the close (yes, “they” knew what was coming).
In last night’s RANT, I noted there was nearly no chance they would vote NO given that government’s NEVER destroy themselves in such a manner. Assuming a branch of the German government would unilaterally bring down the financial system (let alone the judicial branch, which likely was “urged” by TPTB to vote YES), would be like assuming the CFTC, a government-run entity, will bring down the gold and silver shorts on the COMEX. ROFLMAO!
However, if you can create a perception (aided by the puppet media, of course) that the “German vote” was a major worry, and then SMASH gold just as the “relieving” news comes out, you can 9 times out of 10 perpetuate the hindsight analysis that gold was rising assuming a NO, and thus needed to COLLAPSE upon a YES. And smash they did, taking gold down this time by an astounding $45 in what looks to be approximately FIVE MINUTES in the middle of the night, and still further at EXACTLY 8:20 AM EST and 10:00 AM EST!
Here’s an excellent description, from ZeroHedge, of what triggered the gold carnage last night, motivated by commencement of the “currency wars”, as symbolized by last weeks’ maniacal BOJ intervention to weaken the yen and yesterday’s incredible Bank of Switzerland announcement.
Speculation was that the falls were technical in nature after stop losses were triggered. However, Asian traders spoke of some 4,000 lots of gold being ‘dumped’ on the COMEX and of a “large sell order”. This would suggest that the sellers may not have been profit motivated and official selling may have been involved. After the Swiss franc intervention and currency debasement yesterday, market participants are wary of further official government and central bank intervention. With further gains for the Swiss franc artificially capped (at least in the short term), it would be naïve to exclude the possibility of intervention in the gold market and a continuing strategic capping of the price. “The start of full-on currency wars has started in earnest,” said Maurice Pomery, chief executive at Strategic Alpha, quoted in the front page of the Financial Times today. “After currency wars come trade wars and as we see the exporting world pressured as the developed world contracts, tensions will rise.”
And remember, the German court ruling was that it is ACCEPTABLE for the Eurozone to PRINT UNLIMITED AMOUNTS OF EUROS to bail out the PIIGS, whom everyone knows will collapse ANYWAY! Which, by the way, is EXACTLY what OBAMA will endorse in tomorrow night’s speech (likely to be supported by Republicans, by the way) when he calls for YET ANOTHER $300 BILLION “jobs stimulus” plan!
And one final comment on my favorite topic of all, that of backstabbing among the “good guys,” which NEVER seems to end. Doug Casey is obviously one of the smartest guys in the game, but seems to have a fetish about disparaging gold manipulation, despite REAMS of evidence to the contrary (such as YESTERDAY’s Wikileaks disclosures). Here’s the quote from this JACKASS yesterday (no offense to my friend Jim Willie!):
“It’s like these ridiculous notions that circulate about a few bullion banks suppressing the price of gold and silver. Of course governments would prefer gold stay low, for lots of reasons. But that’s different from thinking they can keep it low. If that’s how stupid and incompetent they are, still going short, trying to suppress the price, with gold at $1800, after having idiotically lost maybe hundreds of billions fighting one of history’s great bull markets, then we have nothing to worry about. If there was any truth to it, traders would have been snickering about it over drinks for the last decade. And any trading department that wrong for that long… it’s impossible, because they would have been turfed after the first quarterly report. But, then again, since a lot of people are credulous enough to believe nonsense like that, even now, maybe we do have something to worry about. It would appear some gold friendly folks don’t have much of a clue how the market, or even the world at large, works.”
I believe that he, like Richard Russell (whom I otherwise admire greatly), believes he will sell more SUBSCRIPTIONS if he remains MAINSTREAM, even if he is misleading the very people he purports to help. The reason RANTING ANDY, who is NOT paid to write, is well-read is because he tells it like it is, something Doug Casey is obviously not doing. His primary “angle” on PROTECTING YOURSELF, by the way, is to buy land in South America (preferably at his OWN projects, I’m sure), which may have some merits, but to the AVERAGE PERSON is not only cost prohibitive but also unlikely to have any PRACTICAL use. He admitted yesterday “I earn a lot of money”, a decidedly arrogant thing to say amidst a collapsing economic environment and record unemployment. Doug, I assure you this “gold-friendly folk” knows more about how the gold market “works” than you, so do me a favor; take all that money you earn, fly down to your palace in Argentina, and fly a kite!