Ranting Andy Special: The Central Banks Can’t Win

RANTING ANDY – It’s another one of those days where I have too many thoughts in my head, making it hard to focus on just one.  The pace of GLOBAL ECONOMIC COLLAPSE is accelerating too rapidly, to the point that at ANY GIVEN MINUTE of ANY GIVEN DAY the final death knell could sound, the commencement of the PANIC that CANNOT BE AVERTED by the stroke of a keyboard (i.e. printing electronic money).

Last Friday we entered the weekend with crashing stock markets (particularly BANKS, despite the best efforts of the PPT), surging gold prices (despite the typical, MASSIVE Cartel suppression tactics), and the prospect of an imminent Greek bond default.  The Bank of Japan had just announced its most blatant (and in hindsight FAILED) attempt to devalue the yen, and the Swiss National Bank had just announced the UNTHINKABLE, an all-out currency devaluation in plain sight of the entire financial world.

That night, the G7 meeting (England, France, Germany, Italy, Japan, Canada, and the U.S.) concluded with a brief, ambiguous communiqué.  I excerpted the key phrases below, which essentially said ‘WE WILL DO ANYTHING, LEGAL OR ILLEGAL, MORAL OR AMORAL, PRACTICAL OR IMPRACTICAL, SO SAVE THE STATUS QUO, IN WHICH WE, THE MOST WEALTHY, POWERFUL, CONNECTED A—HOLES ON EARTH RULE EVERYHING, STEAL EVERYTHING, AND DECIDE WHO LIVES AND DIES.’

Central Banks stand ready to provide liquidity to banks as required.

We will take all necessary actions to ensure the resilience of banking systems and financial markets.

In other words:

‘CENTRAL BANKERS ARE ALL-POWERFUL GENIUSES WITH THE ABILITY TO MANIPULATE ANY AND ALL MARKETS INDEFINITELY SIMPLY BY PRINTING MONEY.  IT DOESN’T MATTER THAT NOTHING WE HAVE SAID OR DONE HAS EVER WORKED, THAT SEVERAL OF US ARE VISIBLY BANKRUPT, OR THAT INFIGHTING THREATENS TO DESTROY OUR TREASONOUS UNION AT ANY SECOND.  WE HAVE BEEN PRINTING DOLLARS, EUROS, YEN, POUNDS, AND FRANCS AT AN EXPONENTIAL RATE SINCE THE GLOBAL FINANCIAL CRISIS COMMENCED IN 2008, AND WILL CONTINUE TO DO SO, WITHOUT ANY PRETENSE IN THE SLIGHTEST, UNTIL THE MARKETS DO WHAT WE WANT.’

At that time, interest rates on Greek one-year debt had just passed 100%, while credit default swap spreads were, and still are, predicting a 98% chance of Greek default (tables below):

GREEK ONE-YEAR DEBT INTEREST RATE

GREEK CREDIT DEFAULT SWAPS (COST OF INSURING GREEK SOVEREIGN BONDS) – NOTICE IT CONTINUED TO RISE LAST WEEK!

But these banking geniuses, who cumulatively received $16 TRILLION OF OVERT AND COVERT BAILOUTS over the past three years from the Federal Reserve (ALL WITH FRESHLY-PRINTED DOLLARS), decided they could “save the day” once again if they just PRINT MORE MONEY, coupled of course with a MASSIVE, coordinated effort to SUPPORT BANK STOCKS and ATTACK GOLD AND SILVER PRICES. 

http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/

Regarding the latter, it is possible the entire attack was perpetrated with the usual PAPER tools, such as derivatives and naked shorting of futures contracts, GLD, and SLV, but in my view the situation was so dire, they may have coerced one or more of the G7 members with actual gold reserves to sell or lease out some in the name of the “greater good (i.e. preserving the banker-dominated status quo).”  Of course, England and Canada have no gold to start with, Japan’s holdings are nominal, it is public record that Italy has swapped out at least some portion of its gold reserves, and we all KNOW the U.S. has NOTHING, or NEXT TO NOTHING left after surreptitiously selling or leasing it as part of the “strong dollar policy” created in the mid-1990s by luminaries such as Robert Rubin and Larry Summers. 

That leaves whatever is left of Germany, Italy, and France’s reserves, and it is hard to believe ANY of these nations, particularly Germany given its position of negotiating strength and history of hyperinflation, would at this denouement of the fiat system be selling anything material from their gold hoards, assuming they still hold material amounts.

In other words, it was MOST LIKELY all paper, but if it wasn’t, the physical gold likely came in VERY SMALL AMOUNTS, and VERY RELUCTANTLY, from nations desperate to hold on to every ounce possible.   I mean, we are talking TREASON here – firing squads and all, if in hindsight it is found out that these nations sold ANY real gold at this critical juncture in time, so if they did in fact sell any you can see just how DESPERATE the situation was last weekend.

And oh yeah, gold STILL closed the week above $1,800, and silver above $40!  What does that tell you about how POWERFUL physical demand is today, EVERYWHERE?

And if you don’t believe me, read these excerpts from Ed Steer (Casey Research, GATA), about PHYSICAL demand in Britain and Thailand:

“My coin dealer told me today that he just does not understand what is going on with the gold price. He opined that the Central bankers are unlikely to succeed if they are responsible for this take down. He is just seeing too much physical demand at the moment. He is turning away enquiries from abroad. The physical supply is disappearing fast, although he managed to find me some sovereigns (these tend to be tax efficient for us in the UK as sovereigns are still legal tender and have been since 1847). I have another coin dealer I occasionally use, he had only 8 gold sovereigns and 4 half sovereigns. The only metal he has to sell at the moment are Silver Eagles and Krugerrands. He tends to sell both silver and gold bars as well, but he has none of those available either. He is out of all other products.”

The other is from U.S. expat Bill Goodrich from Hua Hin, Thailand…and this is his report.

“Today I was down in the gold district in Bangkok to buy some bullion on this little pullback…and there was no physical bullion to be had. All the gold shops were packed…and the only thing you could do was pay for an order that would be delivered in 10 days to 2 weeks. I have never seen a lack of physical bullion in this district ever before. There is physical gold on display, but it is all jewelry, which has a much higher margin than just the bullion bars that everyone was wanting.”

“At least in this part of the world when gold drops even this little bit, the demand is astounding…and people are out in droves buying for cash. Here, every trade is physical gold…and all the transactions are cash on the barrelhead, so I have no fear that gold will really get a chance to pull back very far at least if the sentiment all over the Asia Zone is the same as it was here today.”

No matter what topic I choose for my RANTS, there is always MASSIVE evidence to support it.  My mind may drift on numerous tangents, but no matter which direction I go I find charts, tables, articles, and quotes to support what I am saying, many from my READERS, which I thank you for whole-heartedly.  I am AWESTRUCK by how powerful the winds of change are blowing, with each week the hurricane of discontent notching up a level.  Right now we are at CAT 5, and I believe by year-end the ENTIRE WORLD will feel its effects, some places more than others but, nonetheless, EVERYONE will be affected.

OK, so we got through the week without a financial collapse, with the Dow rising all five days thanks to the PPT, gold drifting down from $1,855 to $1,812 (big deal, Cartel!), the MEANINGLESS BUT WIDELY WATCHED Euro/Dollar exchange rate stable, and no major bank or sovereign defaults.  Of course, European bank stocks ended near their lows, particularly French banks due to their MONSTROUS exposure to Greece (see table below, if you want to see how poorly the French banks are managed!).

The Central Bank dolts’ grand plan calls for MORE MONEY-PRINTING AND PROPANDA EARLY NEXT WEEK, at least until the Fed announces QE3 on Wednesday, which, coupled with additional, MASSIVE PPT support, is expected to buoy the all-important Dow through the week, when the expanded G20 meets to further plot how to kick the can down the road a bit further.

UNFORTUNATELY, the CRISIS is now ACCELERATING at LIGHT SPEED, per this news from this morning!

First, Greek’s lame-duck Prime Minister just cancelled a MAJOR trip to the U.S., which was to have commenced tomorrow (Sunday) with an agenda to meet U.S. Treasury Secretary Geithner, IMF head Lagarde, and the U.N. General Assembly. 

And the official statement from his office this morning:

“Greek Prime Minister George Papandreou has cancelled a visit to the US because of the seriousness of the country’s debt crisis.”

WOW, the crisis is so “serious” that Greece’s top politician has cancelled visits to see the only people that could possibly bail him out!

http://www.zerohedge.com/news/did-papandreou-just-get-worst-possible-news

Which was essentially verified by THESE comments this morning from Germany, which controls whether or not the ECB will continue to bail out Greece…

http://www.zerohedge.com/news/germany-rejects-geithner-ecb-refuses-print-greece-gets-final-warning

The key quotes are as follows:

ECB’S WEIDMANN-IT IS WRONG TO ABANDON ALL PRINCIPLES OF MONETARY POLICY BY CITING A GENERAL EMERGENCY-SPIEGEL

GERMAN CSU HEAD – IF GREECE CAN’T OR WON’T KEEP TRACK WITH RESCUE PLAN THAN AN EXIT FROM THE EURO ZONE IS CONCEIVABLE-SPIEGEL

In other words, Germany is hinting that Greece’s days as a member of the Euro Zone are numbered (as if we, and THE MARKET per the CDS chart above, didn’t know already), possibly as soon as next week per the cancellation of Papandreou’s trip to America. 

But don’t worry, Papandreou just said the notion of default is “silly”, so all’s well. 

Hmmm, where have I heard that before?

http://www.youtube.com/watch?v=gUkbdjetlY8

…or how about here:

“There is absolutely no truth to the rumors of liquidity problems…”

      Bear Stearns press release, THREE DAYS before declaring bankrupcty

“Oh! what a tangled web we weave, when first we practice to deceive.”  Thank you Walter Scott, for this most appropriate description of the situation, one which can ONLY END BADLY for the CENTRAL BANKS.

Remember, the ENTIRE purpose of last week’s emergency lending Frankenstein product was to convince the markets that defaults could be avoided with additional LIQUIDITY.  Unfortunately, the real problem is not LIQUIDITY but SOLVENCY (although interbank lending has dried up, compounding the problem), and how ANYONE can believe that MORE PRINTED MONEY will solve the problem?

Readers, my GUT tells me the ENTIRE improvement in stock indices late last week was due to MASSIVE G7 intervention in the stock markets, NOT the coordinated lending facility.  And given that, in my nearly ten years of watching gold, I have NEVER seen manipulation as blatant as during the past two weeks (when the “DEATH STAR” attacks commenced), my feel is we have reached the FINAL STAGE of the END GAME, when the ONLY remaining Central Bank weapon is PRINTING MONEY AT PARABOLIC RATES and using it to influence PERCEPTION by ILLEGALLY manipulating markets.

Analysts, traders, journalists, and essentially EVERYONE have been CONDITIONED to believe CENTRAL BANKS have all the answers – hence the MORONIC adage, “Don’t Fight the Fed”, which by the way is EXACTLY what I have been doing for the past decade. 

Just like they were CONDITIONED to believe technology stocks were one-way moonshots, and that Real Estate can’t decline, and that Republicans are “Conservative” and Democrats “Liberal”. 

And CONDITIONED, since 1971, that “dollars are MONEY, when in fact they are just one of the more than 200 FIAT CURRENCIES in existence today, and the more than 1,000 that have come and gone throughout history, EACH AND EVERY ONE OF WHICH HAS FAILED (with an average lifespan of roughly 40 years).

http://www.jhall.demon.co.uk/currency/by_country.html

But just like all the LIES, SCAMS, and FRAUDS throughout history, such as the internet and real estate bubbles, ACCEPTED REALITY will change, as will the zeitgeist of belief in paper assets.  And no, it will NOT take much time for this change to occur, as once the ball starts rolling down hill, gravity will take over with a VENGEANCE!

http://www.youtube.com/watch?v=_wfucYbZMEo&feature=related

When history books are written about the FALL OF THE GLOBAL FIAT CURRENCY SYSTEM, philosophers, economists, and schoolchildren alike will marvel at the madness of 1971-2011, wondering how humankind could have attempted something so stupid, and mathematically unsustainable.  No one disagrees more than I with the notion there will be “one world” or “one government”, and I believe talk of that ilk, as well as belief in the drivel emanating from megalomaniacs such as Buffet and Soros, is sheer madness.  Following years, perhaps decades of economic carnage, I believe the end of “King Dollar” yield a new era of economic sanity, not much different than the sanity displayed by America’s founding fathers after centuries of oppression by the British Empire.

The new era of currency, whenever that may be, will be ENTIRELY BACKED by Precious Metals, which will long before then (as in NOW) reassert themselves for what they really represent – MONEY.

The sooner you realize this, the sooner you will take steps to PROTECT YOURSELF from the economic calamity which is a MATHEMATICAL CERTAINTY to occur sometime in the near future, perhaps the VERY near future.

Remember, the MOST IMPORTANT COMMODITIES ON EARTH are those you can barter with under ANY circumstances (such as FOOD and OTHER LIFE NECESSITIES), and the ONLY GUARANTEED WAY TO PRESERVE WEALTH is with REAL MONEY, i.e. GOLD AND SILVER!

Andy

P.S.  I was forwarded the below nine-minute video yesterday afternoon, one of the most thought-provoking and inspiring I have ever heard.  I think It will EMPOWER you to listen.

http://www.youtube.com/watch?v=7vcgCG60tw8&feature=player_embedded

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