RANTING ANDY – After an incredibly frustrating Friday, in which new heights of market rigging were employed by the EVIL leaders in Washington and on Wall Street, I hopped on my bike and rode 50 miles, following up this morning with my weekly soccer pickup game. Over this 15-hour period, emails started pouring in, and if there’s one advantage to being RANTING ANDY, it’s the amazing flow of diverse, updated information my readers regularly send.
Per my recent RANTs, “THE TITANIC MOMENT” and “DESPERATION ON G-20 ISLAND”, the END GAME has arrived, causing Central Banks to flail in the wind, leaving them with NO VIABLE OPTIONS except to PRINT MONEY (both OVERTLY and COVERTLY) and MANIPULATE MARKETS. I noted that yesterday would be one of the most important days in history if the PPT couldn’t hold the markets up, and frankly I’d rank their stock market efforts as no better than a C+, but certainly not the F they so feared. Of course, it probably took billions of PRINTED DOLLARS to support the Dow, which was negative with just five minutes left in the trading day before the last “Hail Mary” push, and of course a boatload of late “rumors” about imminent sovereign and bank bailouts.
I have numerous topics to discuss today, and ironically the gold and silver annihilation isn’t even tops on my list. But of course I will discuss it, as from my standpoint it represented the most DESPERATE, EGREGIOUS act in the Cartel’s HISTORY. The nonsensical drops in PMs on Thursday and Friday, which both commenced at EXACTLY 3:00 AM EST and accelerated in COMEX trading, were ORCHESTRATED PAPER ATTACKS, as intense as the SUNDAY NIGHT PAPER SILVER ATTACK of May 1st. Not only that, when the more vicious attack occurred on Friday, NO OTHER MARKET (stocks, bonds, currencies, oil) made significant moves AT ALL!
To start, TPTB are flat-out TERRIFIED at the prospect of gold rising through $2,000 and silver $50, highly symbolic “round numbers” that will clearly catch the attention of the global media and buying public, particularly because Precious Metals are among the few INELASTIC commodities in the world, i.e. DEMAND INCREASES AS PRICES RISE. From the below charts, on SIX separate occasions over a two-week period entering early September, the Cartel held the line at $1,900/oz, including four defenses awfully close to the “cap of last resort” time of 12:00 PM EST.
Secondly, with global stock markets plunging (and the Dow, as always, outperforming due to maniacal PPT support), and the Swiss National Bank turning the once-proud Franc into a Euro proxy overnight, FEAR of safe-haven bullion buying prompted the use of excessive force to maul gold and silver in the PAPER markets. By now, it should be clear to ALL that the RANTING ANDY forecast of collapsing banks and sovereign nations WILL occur, no matter how much intervention is attempted, and that such events, WITHOUT DOUBT, will eventually yield MASSIVE rushes into gold and silver AROUND THE GLOBE. The tipping point of the daisy chain appears likely to be Greece, but don’t be surprised if something emerges from “leftfield” to instigate the final market PANIC EVENT.
Third, several PIIGS nations and European and American banks are in dire financial straits, as interbank lending has DRIED UP and BANK RUNS have officially commenced at some of the largest money center banks. Remember, FRENCH banks have the largest exposure to Greece and Italy, and several major banks (such as MORGAN STANLEY), have enormous exposure to France. There is not a doubt in my mind that, aside from the blatant PAPER attack, COVERT LEASING of physical gold, silver, and essentially anything not nailed down occurred this week to meet cash requirements in an increasingly cash-poor world. Even the hastily compiled, $500 BILLION joint Fed/ECB/BOE/SNB credit line (of FRESHLY PRINTED MONEY) isn’t enough to satiate the needs of all these bankrupt entities, particularly when some of the creditors (my speculation) don’t want FIAT CURRENCIES anymore (can you say China?).
Here is a link to the graphic below depicting Euro Zone bank exposure by country. For some reason, I cannot paste a similar picture for each country, but if you clink on the link below you can see the information yourself.
Per the graphic below, French banks are by far the most exposed to a Greek default, explaining why the stocks of Credit Agricole, Banque Paribas, and Societe General are leading the markets lower. And when you click on the above link and hit “Italy”, you’ll see the exact same exposure, with once again the French banks demonstrating their incredibly, ultimately catastrophic judgment.
To complete the tables, British and German banks have the largest exposure to Ireland, Spanish banks have the largest exposure (by far) to Portgual, and French and German banks are neck and neck in the race for which will experience the greatest write-offs of Spanish debt.
Unfortunately, this data was not calculated for exposure to FRENCH banks, as clearly the three mentioned above are headed for BANKRUPTCY and/or NATIONALIZATION, events which would clearly kick the legs out from under France itself, banishing it to the PIIGS pen, or should I say PIFIGS?
Finally, the Cartel must contend with seasonally explosive PM buying, particularly from India due to the Diwali festival in October through November and the traditional wedding season in September through December. Insatiable Indian demand is being compounded by record Chinese buying, relentless purchases by the Bank of Russia, and, frankly, surging purchase activity ACROSS THE GLOBE from a combination of INDIVIDUALS, INSTITUTIONS, AND SOVEREIGN NATIONS.
Yet, amidst all this massively PM-bullish news, and EXPLOSIVE, RECORD-BREAKING GLOBAL GOLD and SILVER demand, the Cartel managed to cause YET ANOTHER BRUTAL PAPER GOLD AND SILVER SMASH. Yes, per my comments above there was likely some desperation physical selling going on as well, but judging by the speed, timing, and Cartel footprints, there is NO DOUBT the monstrosity executed on the COMEX yesterday was essentially ALL about PAPER gold and silver.
On a day when the Dow, dollar, bond, and energy markets were essentially flat, amidst an ongoing collapse of European and American banks that threatens to destroy the entire global fiat currency system, we’re supposed to believe THIS is what the “free markets” told us? And by the way, notice the high tick of the global trading day (essentially unchanged from Thursday’s close) was at – yep, you guessed it, EXACTLY 3:00 AM EST. Moreover, the KILL SHOT was administered at – wow, what a shock – EXACTLY 12:00 PM EST, when gold fell $70/oz and silver an astonishing $3.00/oz, in LESS THAN TWO HOURS, while the Dow DIDN’T BUDGE!
OK, who’s ready for some SHOCKING late-breaking news, explaining EXACTLY how the Cartel accomplished this MANIPULATION COUP D’ETAT today?
And away we go…
Even RANTING ANDY’s jaw dropped when he read this one. A DRAMATIC increase in gold and silver margins was announced AFTER THE MARKET CLOSE FRIDAY, effective after the market close this coming Monday.
Gold and silver have been consolidating around $1,800 and $40, respectively, for WEEKS, and BOTH were smashed brutally on Wednesday afternoon, Thursday, and Friday. So the CRIMINAL CME announces a margin increase AFTERWARDS? The whole purpose of margin increases, according to THEM, is to reduce market volatility, which obviously in this case saw the opposite result. Yes, readers, the CRIMEX criminals, led by a handful of banks that you know very well, were, AS ALWAYS, told about this margin increase beforehand, and encouraged to NAKED SHORT as many paper contracts as possible, which during an environment of liquidating stock and commodity markets could only cause the PM catastrophe we witnessed yesterday. Seems like I remember something like this occurring in early May…
So be comforted, readers, that the gold and silver action we saw the last three days was a DESPERATE, ORCHESTRATED PAPER ATTACK by the Cartel to deflect safe haven buying away from Precious Metals while global stock, credit, and commodity markets collapsed.
And if THAT comforts you, get ready for what the AFTERMATH of this PAPER SMASH took the form of, a textbook example of the physical truth “EVERY ACTION HAS A REACTION.”
As I noted yesterday, not only have OFFICIAL RESPONSES to the global equity and credit collapses been brazenly manipulative, they also SLOPPY and UNAUTHORITATIVE. Their slip is clearly showing, as observed by the HASTE and AMBIGUITY of their actions, such as the vague G-7 and G-20 communiques, the blatant Swiss Franc and Japanese Yen devaluations, the shocking Slovenian government collapse, the $500 billion joint U.S. dollar bank credit line, the lack of clarity from the Bundesbank and ECB regarding the all-important proposed changes to the EFSF stability fund, and of course the ghastly FOMC Fed statement following its vaunted two-day meeting. Yes, this all happened in the past two WEEKS!
Anyhow, the situation is clearly becoming so dire, and the OFFICIAL FEAR of a Precious Metals mania so acute, that the ALL-OUT PAPER ATTACK was orchestrated just as gold and silver were about to EXPLODE. By the way, does anyone remember August, i.e. LAST MONTH, when gold and silver SOARED for the exact same reasons the media is portraying for why it is PLUMETTING now?
Unfortunately for the bad guys, they miscalculated what the public’s RESPONSE would be. During past PAPER gold and silver attacks, individuals and institutions alike would curl up in the fetal position, waiting for the storm to pass and upward PM momentum to return before wading back into the market. However, in today’s environment of PENDING GLOBAL ECONOMIC COLLAPSE, massive buying is emerging from all corners of the earth, including INDIVIDUALS, INSTITUTIONS, and SOVEREIGNS!
Between my Friday evening bike ride and Saturday morning soccer game, I was BESEIGED with information depicting ASTOUNDING PHYSICAL BUYING of GOLD and, particularly, SILVER. This information is so powerful, it could serve to ignite the final Cartel-busting pushes above $2,000/oz and $50/oz, respectively, in my opinion.
Here are some examples, both empirical and anecdotal:
Per this link, Sprott Money in Canada actually RAN OUT OF PHYSICAL SILVER yesterday due to MASSIVE, WIDESPREAD public buying (http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/9/23_Sprott_Money_Temporarily_Runs_Out_of_Physical_Silver.html)
Another major U.S. bullion company had the TWO BEST DAYS IN THEIR 30-YEAR HISTORY on Thursday and Friday
APMEX, the largest bullion company in America, is showing the WIDEST PREMIUMS I HAVE EVER SEEN, AND BY A LARGE MARGIN. With gold closing Friday’s aftermarket trading at $1,658/oz, the price offered by APMEX for gold eagles, when purchasing less than 20 coins with a credit card (I’d bet by far their most numerous transaction type), the premium is…..DRUMROLL PLEASE.….SPOT PLUS $164! Yes, if you want to buy, say, 19 gold eagles you will pay $1,822.99 per ounce, representing a premium of 10% to the prevailing PAPER price! The only way to get their “as low as $89.99 per coin over spot” is by purchasing AT LEAST 100 COINS for AT LEAST $175,000, excluding roughly 99.9% of ALL GLOBAL BUYERS.
|2011 1 oz Gold American Eagle|
|As low as $89.99 per coin over spot!
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Meanwhile, if you want to buy less than 20 SILVER EAGLES with a credit card, you will pay $37.63/ounce, representing a premium of 21%, which by the way is the exact same premium the Sprott Physical Silver Trust (PSLV) closed at yesterday.
Here are some emails to Ed Steer’s newsletter yesterday:
- Over at my bullion dealer yesterday, there was hardly a place to park. I had to park way down the street from where I normally do. I’ve never seen that many buyers in his story at one time…ever! Friday turned out to be his biggest sales day in the company’s history. I would suspect this scene was played out at just about every bullion dealer in North America on Friday…and I would guess there will be a similar reaction all over the Far East, Australia, and Europe when business resumes on Monday morning…which begins on Sunday night here in North America.
- Just got off the phone with my coin dealer. He has been cleaned out of all gold sovereigns. Can’t get them from the Royal Mint, who have also been cleaned out. This is unprecedented. He had a few 1/4 Britannia coins which I snapped up. He has got some silver stock, but he is not willing to part with it at these prices.Another coin dealer, not my regular one, from whom I bought some silver Britannia coins yesterday, are closed for business. They are not taking any orders. As they’re pricing is in real time, as opposed to London Fixes, my other coin dealer was telling me they must be struggling with stocks, too. Here’s the linkto their website. As you can see, they’re not taking orders for anything.Another of the coin dealers I do business with, has not picked up the phone since midday yesterday.”
- Finally, on the King World News weekly metals wrap-up this morning, 40-year bullion veteran Bill Haynes of CMI Gold said his firm saw MASSIVE buying the past two days, more into silver than gold due to the incredible PAPER price dislocation from reality.
As you can see, the GLOBAL BUYING RESPONSE has been historic, a veritable buying frenzy amidst rising premiums. So much so, it will clearly cause the RIFT between PAPER and PHYSICAL prices to widen further, potentially to the point it becomes obvious to BUYERS THE WORLD ROUND that the PAPER pricing mechanism is no longer REAL, and thus should be IGNORED. Thus, given the already tight PHYSICAL metal situation, this latest Cartel gamut could backfire mightily, particularly as we head back into the firestorm of collapsing banks and PIIGS. And don’t forget U.S. municipalities, not to mention the Federal government, which is on the brink of yet another shutdown due to unending partisan squabbling.
And speaking of the ECONOMIC FIRESTORM, it looks like we’re headed for YET ANOTHER SUNDAY NIGHT SPECIAL in the next 24 hours, potentially the most EXPLOSIVE YET.….
Yep, it only took a few hours of my waking day to see the first potentially catastrophic news hit the tape this morning, that this weekend’s desperation G-20 meeting is turning sour. It looks like the Greek default that has been vehemently denied (against all REASON and MATHEMATICS) is once again front and center, as well as the MASSIVE European bank bailouts that also have been denied but MUST occur to avoid IMMEDIATE COLLAPSE.
Below are the key headlines:
- G20 now preparing itself for Greek default after October – Sky sources. Will be on Sky News imminently with more.
- G20 sources: all efforts behind the scenes (by G20 members) are now going into recapitalising banks, preparing economies for default.
- G20 sources: default not expected until after Cannes G20 early November. Emergency funding should still keep Greece afloat thru October
- G20 sources: No suggestion Greek default need imply country leaving the euro
- G20 sources: @ Washington summit marked difference in attitude. Confident euro members edging closer to recapitalising banks, expanding EFSF
Perhaps this week’s gold and silver smash, coupled with the late-breaking margin increase, were executed due to advanced knowledge of the G-20 plans to default Greece and bail the banks out, which in my view would represent the SINGLE MOST HYPERINFLATIONARY EVENT OF MODERN HISTORY. However, I am skeptical, as per above I believe European and American “financial leaders” are running around like chickens with their heads cut off, DESPERATELY throwing out misleading rumors that “all’s well” and grasping any possible straw, on a moment-to-moment basis, that might temporarily put off the DAY OF RECKONING.
Irrespective, with these headlines now spread AROUND THE WORLD, the POINT OF NO RETURN HAS BEEN PASSED. The G-20 has set expectations of an IMMINENT GREEK DEFAULT AND HISTORIC, GLOBAL BANK BAILOUT (with freshly printed money), so the market will DEMAND nothing less than a definitive statement before markets Asian markets reopen on Monday.
Here’s how I see it:
Scenario 1: A lack of OFFICIAL response will be viewed as a failure to reach an accord, resulting in COLLAPSING STOCK AND CREDIT MARKETS WORLDWIDE, and likely within days the first European bank shutdowns, which would in turn spill over to the rest of the ailing money center banks in the Western World (say goodnight, Bank of America and Morgan Stanley). If this occurs, gold and silver could succumb to additional near-term selling from the announced margin increase, amidst a liquidity-based selling frenzy of all markets worldwide. Of course, the other assets would not recover, while later this Fall gold and silver would resume their inexorable rises to $2,000/oz and $50/oz, respectively, and WELL BEYOND.
Scenario 2: A coordinated statement that Greece will be officially defaulted later this Fall, with detailed plans on how the damage will be contained by bailing out ANY AND ALL BANKS WITH SIGNIFICANT EXPOSURE TO GREEK DEBT. Per the tables above, the French “Big 3 Banks” might be nationalized in the process, as there appears little chance they could survive their massive exposure to Greek debt, as well as to other PIIGS such as Italy and Spain. In my view, this is the most likely result, which should stabilize global markets TEMPORARILY, yielding a return to the pre-smash gold and silver prices within weeks, if not days.
Scenario 3: A SURPRISE announcement that, following fruitless discussions regarding plans for a “controlled Greek bankruptcy” later this Fall, the G-20 has decided to bankrupt Greece now. I view this as the least likely outcome, which would cause the maximum amount of market havoc (and likely the first $200+ gold up day).
Let’s face it, no one knows what will happen tomorrow night. However, I have worked in the financial markets for 20 years and, particularly in today’s GLOBAL INTERNET INFORMATION AGE, once news like this is out in the open, it MUST BE ADDRESSED IMMEDIATELY. The “G-20” sources know this well, and will likely have a detailed public statement in the next 24 hours, lest unleashing the CATASTROPHIC, CHAOTIC “Scenario 1” or “Scenario 3.”
Readers, it’s still Saturday afternoon, and I couldn’t think of a better time to trade in your DYING FIAT SCRIP for REAL ASSETS such as GOLD, SILVER, FOOD, and OTHER ITEMS OF REAL VALUE. The WORST-CASE SCENARIO is upon us, even if some time is bought with the GLOBAL BANK BAILOUT resulting from the most likely outcome of the G-20 releasing these headlines, i.e. “Scenario 2.” All three scenarios will yield accelerated global inflation, but it is difficult to determine which countries will be most at risk of near-term HYPERINFLATION. Remember, per my Thursday RANT, “FIAT CURRENCY CRISIS COMMENCED THIS MONTH”, this month’s MASSIVE, GLOBAL MARKET LIQUIDATION has yielded catastrophic currency volatility, particularly in emerging markets (and some not so emerging, such as Mexico, Brazil, India, South Korea, and Switzerland), where the “flight to safety” of U.S. dollars (LOL) has yielded dramatic, inflationary declines in local currencies.
I cannot emphasize enough how vital it is to PROTECT YOURSELF NOW, as once the BANKRUPTCY DAISY CHAIN is set in motion, there is no way of telling what might happen.