RANTING ANDY – I wasn’t planning to write before my trip this afternoon, but was beckoned by the siren call of corruption throughout today’s markets. I have no major, broad conclusions this morning (give me time), but wanted to call a manipulative spade a manipulative spade.
As expected, German Parliament kowtowed to the bankers by overwhelming approving expansion of the EFSF’s scope and powers, just as the German Supreme Court did three weeks ago despite “rumors” of dissent. For some reason, Germans have been characterized as “smart” and “conservative” stewards, despite being known worldwide as the poster children for both hyperinflation and war. They certainly have strong technology and a motivated work force, but their politicians are no smarter than their pathetic European peers, and their Central Bankers no more “conservative” than the supposedly prudent Swiss (you know, the ones that just sold 60% of their gold and pegged the Franc to the Euro).
In the end, the German EFSF vote was no different than the U.S. debt ceiling boondoggle, in which politicians posture for personal gain but ultimately cut an inflationary deal to kick the can down the road, ensuring their places in government are unaffected and re-election chances improved. I expect the EFSF to be increased as much as the bankers demand, until finally the Euro collapses under its own, HYPERINFLATIONARY weight. The alternative of “letting Greece go”, while obviously the best long-term solution, would be too painful politically to consider (unless the markets did it for them), so as always the politicians took the “QE to Infinity” road, HOPING and PRAYING the system holds up longer than their terms.
Irrespective, the Euro will eventually be impaled by the double-edged sword. Under the current course, it will be destroyed by inflation, as opposed to letting Greece go and having it shredded by bond defaults. Oh well, ultimately we will see both scenarios unfold in Europe, it’s just a matter of how long it will take, and I assure you overinflating the EFSF will not buy much more time. European DEBT SATURATION has been reached, and piling more onto the house of Cards will only make for a larger CRASH, particularly in its #1 basket-case, Greece.
On this side of the pond, the PPT is in rare form, as discussed in last night’s RANT, “GENERATIONAL CHANGE.” For something like 25 weeks in a row, weekly jobless claims printed above 400,000, but magically had a multi-standard deviation improvement today, to a still rancid 391,000, a number I might add will likely be revised higher next week (every week is). Yesterday, we watched the PPT maniacally protect the Dow 11,000 level for the umpteenth time, and magically this amazing, “much better than expected” number comes out to push the Dow further away from the PPT’s dreaded 11,000 level just in time.
Don’t believe me?
Then take a look at what the Dow has done this summer, a period of extreme economic turmoil across the globe. I have discussed the “Round Number Syndrome” ad nauseum pertaining to the Gold Cartel’s capping tactics, and it is no different for PPT support operations, which have now defended 11,000 an astounding six times in the last seven weeks. Nearly all U.S. economic data is at or near multi-year, or in some cases (housing starts, consumer confidence) MULTI-DECADE lows, while the same holds true for ALL our major trading partners (for example, read here http://www.zerohedge.com/news/while-economic-data-never-lies-consumer-comfort-reaches-second-weakest-ever-and-buying-climate-). In other words, there is simply NO WAY anyone could genuinely believe U.S. economic activity is on the verge of a meaningful rebound.
But don’t worry, if the Dow holds above 11,000, the media, Washington, and Wall Street will tell you so!
Meanwhile, following last week’s HISTORIC attack on gold and silver, i.e. OPERATION PM ANNIHILATION, the Cartel ALGOs have returned in force to the mining shares, retaking control after briefly losing it during the latter part of August. As discussed exhaustively, usage of these ALGOs dramatically increased after “D-DAY” on November 9, 2010 (when silver first threatened to surpass $30/oz), yielding repetitive patterns of dreadful HUI trading in which the index peaks nearly every day in the opening half hour of trading, only to swoon the remainder of the day regardless of outside market factors, INCLUDING the prices of gold and silver!
Today’s chart is typical, with the HUI opening at its highs and proceeding to fall 3% while the Dow “plummeted” from +250 to +150. I have watched this same action for many years now, utilized to demoralize PM investors and prevent any kind of speculative frenzy from taking over. TRUST ME, I KNOW WHAT I’M TALKING ABOUT!
I’d say the PM sector needs to consolidate down here based on the “technical damage” done by OPERATION PM ANNIHILATION (especially in silver), but as you know I believe ALL short-term PM charts are MEANINGLESS as they are created by PURE MANIPULATION. The only fundamental difference between today and last week are the prices of gold and silver, not to mention the increased premiums and delivery wait times. The EFSF grandstanding changes nothing about – the Euro Zone is still hopelessly insolvent, with only one near-term alternative – to PRINT TRILLIONS OF EUROS and PRAY the market accepts them. Here in the States, the SECOND DEPRESSION is only accelerating, no matter what “massaged” data is fed to us by Washington.
By the way, does anyone find it suspicious that the so-called “man of the people” Bart Chilton said he’d speak out against COMEX silver manipulation “in the third week of September” (a highly uncharacteristic promise from a CFTC board member), but instead of speaking out sat by and watched the LARGEST, MOST COORDINATED COMEX SILVER ATTACK EVER commence on September 21st?
Stay the course, continue to do what it takes to PROTECT YOURSELF, as time is running out. Only GOLD and SILVER will survive the coming economic conflagration.