RANTING ANDY – BOY, would I love to slow down my writing!
As much as I love it, sometimes the creative juices flow faster when given time to ponder….and REST. But then again, perhaps not, as there are no shortage of ideas running through the RANTING synapses in my head. Fortunately, GOVERNMENT MANIPULATION OPERATIONS in essentially EVERY FINANCIAL MARKET provide ample topics to discuss, such as this morning’s tour de force of heavy-handed “persuasion tactics.”
In Tuesday’s RANT, “GOLD INVESTOR LIMBO”, I re-created the never-ending scenario of CAPPING undertaken by the gold/silver Cartel to prevent major upside explosions, and subsequently the COUNTERATTACKS perpetrated once enough buyers have entered the market to make the technicals look “overbought.” Next, the typical 3:00 AM EST takedown (as we saw yet again TODAY), the resistance to declines that hold PMs near their highs for a few days, and finally the massive capitulations during CRIMEX trading hours when stops are ran, creating margin calls and (media and Wall Street-aided) FEAR among PM investors. Once these capitulations occur, such as during last week’s DEATH STAR ATTACKS, the sector requires TIME to rebuild its base, and mettle, for the next run up. Fortunately for new investors (or dollar-cost averaging old investors), these bargain basement prices (AS WE ARE SEEING NOW, at just below $1,800 for gold and $40 for silver) provide OPPORTUNTIES to further PROTECT YOURSELVES. Unfortunately, however, these periods of GOLD INVESTOR LIMBO are the times when the aforementioned FEAR is its greatest, preventing investors from taking advantage of the temporarily low prices. A fear that, once one understands that gold and silver are MONEY, will NEVER return.
CONVERSELY, in the PPT-dominated stock market, the “never-ending scenario” is one of surreptitious (and often OVERT) OFFICIAL SUPPORT, to the point where the Dow is NEVER allowed to dramatically decline, even when global stock markets are in freefall, U.S. economic data is COLLAPSING, or an actual political or economic crisis is occurring. Eventually, the market gets tired of trying to push lower, as SHORTS simply CANNOT break the support wall funded with UNLIMITED PPT PAPER, eventually causing a short-squeeze like we saw in the Dow this week. Moreover, when a DOW decline is coupled with global market weakness (such as last week), the Dow is NEVER allowed to fall as much as the rest of the world, and the END of the decline ALWAYS occurs in EARLY NEW YORK TRADING, in this case the tail wagging the dog as the main global issue was EUROPEAN BANKS!
Of course, when such a reversal is achieved, the same INVESTOR LIMBO is experienced by short-sellers, whom once again were right but thwarted by the U.S. government’s illegal manipulation tactics. Frankly, I can’t say I feel any pity, as I believe the concept of short-selling is EVIL, a Wall Street-invented construct utilized solely to generate commissions, margin calls, and the destruction of a wide swath of investors and corporations (either via bankruptcy or capital starvation). To give a mia culpa, I disclosed a few weeks ago that I shorted 600 shares of Bank of America at $7/share (a whopping $4,200 trade), so I too have been guilty of short-selling. However, it was my first short sale since FANNIE MAE in 2001 (yes, I was bearish on real estate that far back), and done more as an affront to the criminality of the banking system than desire for a measly profit. Moreover, I covered at breakeven just days later when I realized how strong the PPT support was in that STRATEGIC, TBTF bank (which WILL fail, by the way!).
But the common thread between my Precious Metal long and Dow short stories is the same – GOVERNMENT MANIPULATION OPERATIONS use their unlimited PAPER resources and ILLEGAL trading platforms to change, on the simplest level, gold and stock prices; but more importantly, PERCEPTION by the public at large.
Alas, “behavioral finance” is a POWERFUL tool for buying time, even if the public at large is starting to figure out the hopelessness of the situation. In just the past three days, the only “positive news” to surface was a RUMOR the Chinese might buy Euro Bonds to stave off near-term default, which as I noted in yesterday’s RANT, “THE LAST BAILOUT”, will do ABSOLUTELY NOTHING to improve PIIGS economies, NOT NOW OR EVER. Additionally, adding irony to the situation, Germany and France stated yesterday that they would continue to support Greece, which somehow (with PPT aid, of course) yielded a HUGE STOCK RALLY!
OK, where do I start?
No matter how much money is thrown at Greece, it continues to drop like a stone, to the point where public riots are commonplace and sovereign bonds yield an astonishing 150%! Heck, Greek CDS yields actually ROSE yesterday, despite the “great news” that “Greece is saved”. To make things worse, German and (particularly) French banks have ENORMOUS exposure to Greek sovereign and commercial debt, which is why Deutschbank, SocGen, Credit Agricole, and Paribas (among others) are PLUMMETING toward zero and getting downgraded by ratings agencies. So how can ANYONE be surprised that Germany and France would not publicly state their intentions to support Greece, even if they didn’t really mean it? As my friend Bill Holter put it yesterday, we are talking about three drunks holding each other up while they continue to throw back Tequila shots!
Then, of course, we see STARTLINGLY bad economic news, much worse than expectations across the board, such as today’s 8:30 AM EST trifecta of jobless claims (much higher than expected), the CPI (twice expectations), and the NY Empire Manufacturing report (talk about an oxymoron!), which of course was hugely negative and worse than expectations. Of course, while the initial reaction of the Dow was to fall and gold to rise, amazingly just minutes later the Dow EXPLODED upward while gold had yet another DEATH STAR attack.
Then, less than a half hour later, this STARTINGLY gold-bullish, Dow-bearish news came out (http://www.zerohedge.com/news/global-liquidity-bailout-arrives-ecb-announces-emergency-liquidity-providing-operations-conjunc). Yes, yet ANOTHER emergency GLOBAL QE initiative, which incredibly caused stocks to SURGE further and gold to continue to plunge!
Yes, this is the beauty of a market based on CRIMINALITY on all levels, but particularly the gold and silver markets due to their TINY SIZES and STRATEGIC IMPORTANCE, and the consequent changes in PERCEPTION that are immediately reflected by essentially all media outlets, as well as, of course, Wall Street and Washington, the TWIN TOWERS OF EVIL.
Remember readers, per my RANT earlier this week, “PATIENCE”, it is impossible to accurately predict the timing of the final collapse, despite its seeming inevitability. TPTB (The Powers That Be) have UNLIMITED PAPER RESOURCES at their disposal, a bought and paid for media, a compliant Wall Street propaganda machine, and of course the co-operation of EVIL counterparts around the world (including China, which is happy to manipulate PAPER gold lower if it helps them buy more PHYSICAL gold). So while I am quite confident the system is damaged enough to yield $2,000 gold this Fall, I am not sure when the Cartel (and PPT/ESF/etc., for that matter) will be permanently broken. I am CERTAIN that it will, but cannot tell if it will be later this year, in 2012, or in the WORST-CASE scenario, 2013.
But either way, there are three things I am CERTAIN of:
1. The prices of PHYSICAL gold and silver are going higher, in the last four months of 2011, in 2012, and 2013
2. Inflation of things we NEED to live on, such as FOOD, ENERGY, and OTHER LIFE NECESSITIES will continue unabated. Don’t believe me? Then consider that RICE, which per my February 1st RANT, “RICE – NOT OIL”, THE WORLD’S MOST IMPORTANT COMMODITY”, is at multi-year highs, eclipsed only by the brief, broad commodity spike in early 2008 (try to tell the CHINESE there’s no inflation!).
3. Outside of long positions in PRECIOUS METALS, investors are likely to lose money in essentially ANY OTHER MARKET they attempt to trade, from the stock market to the bond market to commodities to currencies. Between the volatility created by non-stop manipulation, the downside bias that tends to destroy the majority of investors, whom by nature are “long-oriented”, tax and commission burdens, rising counterparty risks thanks to the spreading economic contagion, and the huge leverage typically employed in today’s financial markets, you are nearly guaranteeing losses by trading nearly ANYTHING ELSE.
Hopefully, these RANTS will inspire new readers to INITIATE gold and silver positions at these BARGAIN-BASEMENT PRICES, and more experienced PM investors to DOLLAR-COST AVERAGE before the next, INEVITABLE surge forward!