Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17
The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17
Stock Market Critical Supports are Being Challenged - 13th Nov 17
The One Chart All Investors Should See Before 2018 - 13th Nov 17
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17
Stock Market Correction Phase - 12th Nov 17
Finally, The Fall Of The House Of Saud - 12th Nov 17
Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - 11th Nov 17
E-franc, E-krona... E-volution? - 11th Nov 17
Gold Investment Stalled - 11th Nov 17
Smart Ways to Get Loans Online - 11th Nov 17
What Can Pot Teach Us About Economics and Government? - 10th Nov 17
Can Stocks and Bonds go Down at the Same Time? - 10th Nov 17
Gold Market 2017 Will We See a Replay of 2015 and 2016? - 10th Nov 17
Oil markets turn bullish with shift to backwardation - 10th Nov 17
The Strange Behavior of Gold Investors from Monday to Thursday - 10th Nov 17
Where to Start Your Cryptocurrency Company - 10th Nov 17

Market Oracle FREE Newsletter

Forex Trading Free Week

Silver Golden Accumulation Opportunity

Commodities / Gold & Silver 2009 Oct 29, 2009 - 04:42 PM GMT

By: Jim_Willie_CB

Commodities

Diamond Rated - Best Financial Markets Analysis ArticleActually, the golden opportunity is for buying silver at current prices. The motive for lifting the USDollar was the gargantuan $115 billion in USTreasurys offered this week. With bond yields rising from gargantuan supply, the USGovt and USDept Treasury and USFed did not wish to have both bond principal values fall and the USDollar fall. So the witch doctors engineered a meager semi-lifeless US$ rally, and a full 100-cent silver price discount. The claim again came that the bond auction bid/cover was strong at over 3:1 ratio. But 1.0 of that comes from the primary dealers who are bound to bid. The rest came in majority from foreign central banks. Same Modus Operandi by the Big Boyz.


The difference is that precious metals were taken down in price, using the typical naked shorting of futures contracts sponsored and endorsed by the USGovt, which refuses to enforce the regulatory requirement to maintain 80% metal in inventory. Heck, we could all bring down the price of cotton, and make boxer shorts (jockeys too) cheap, if we all were permitted to sell in gargantuan quantities without benefit of cotton in possession. The Little Boyz are happy either way, since the cotton has the right feel. Now is yet another opportunity to gather in gold, and especially silver, at a hefty price discount. The silver price after some stabilizing days will be ready for a serious assault on the $20 price level. See the brief technical review later in this article.

HARDLY FLIGHT TO SAFE HAVEN

The stories pushed out by the increasingly lost USGovt officials, supported by the armada of Wall Street henchmen to carry out marching orders, and issued by the wholly subservient US financial press, have become downright laughable. In the last several days, on numerous occasions on the tube and on numerous occasions in published articles, the phrases ‘flight to safety’ or ‘seeking safe haven’ or ‘safety & security’ were heard and read. On its face, each description is an affront to any thinking man or woman, entirely in conflict with the Global Paradigm Shift movement away from the USDollar, and in sharp contrast with most deep seated monetary practices in full speed on American shores.

The United States financial arena is the home of the most gargantuan monetary inflation in the history of mankind (as in scores of centuries), as central bank balance sheets hit $3000 billion. The United States financial arena is the home of the most gargantuan federal deficit, with almost no visible end. The United States financial arena is the home of the most gargantuan illicit (not well hidden) debt monetization, as each and every mammoth auction would fail without the purchase from the Printing Pre$$. The United States financial arena is the home of the most gargantuan secretive payment for ruinous credit derivative losses under its offered shelter for Fannie Mae mortgage toxic bond manager and the American Intl Group credit default swap insurer. The United States financial arena is the home of the most gargantuan carte blanche sacred budgets for aggressive war, widely debated as primarily for private firm gains. The point is that the fundamentals and financials of the United States contradict any hint of a global movement drawn to safety, security, stability, wisdom, or leadership. This is pure Orwellian rubbish!

The United States financial arena is the home of the most gargantuan array of liquidity facilities which are designed to enable the US Federal Reserve to function as a quasi-banking system, argued as requiring a program to keep up with the many types and functions. The United States financial arena is the home of the most gargantuan Medicare expense coverage for an aging population best described as the sickest in the entire industrial world, and the most medicated, along with the most bombarded by television commercials for even more drug usage. The United States financial arena is the home of the most gargantuan prop initiatives for the stock market, which boasts over 70% of its volume from Wall Street program trades, and without the role of the Plunge Protection Team and the corrupted cover offered by relaxed accounting rules, would have plumbed the depths long ago.

The United States financial arena is the home of the most gargantuan banker welfare programs disguised as systemic rescues, like the TARP fund. The United States financial arena is the home of the most gargantuan list of insolvent big banks acting like huge zombies. The United States financial arena is the home of the most gargantuan, and still growing, list of banks declared dead in official FDIC funeral services. The point is that the fundamentals and financials of the United States contradict any hint of a global movement drawn to safety, security, stability, wisdom, or leadership. This is pure Orwellian rubbish!

The United States financial arena is the home of the most gargantuan nationalization initiatives, none of which has any merit or longstanding stability to offer. The United States financial arena is the home of the most gargantuan consumption binge in the history of mankind, where wealth is often measured in a credit line rather than work or industrial capacity. The United States financial arena is the home of the most gargantuan flight of working capital ever witnessed by mankind, whose land is left with queer homes that once acted like engines of spending after conversion to automatic teller machines. The United States financial arena is the home of the most gargantuan destruction of home equity and home ownership loss via foreclosure. The United States financial arena is the home of the most gargantuan hidden inventory of bank owned property. Enough, stop there! Monotony does set in! The point is that the fundamentals and financials of the United States contradict any hint of a global movement drawn to safety, security, stability, wisdom, or leadership. This is pure Orwellian rubbish!

Tragically, the US financial arena has become a dangerous land of acidic minted paper posing as money, whose volumes are so gargantuan, that the corrosive effect on capital borders on total. The United States is the home of the worst economists ever to walk on the earth, who command iconic respect, yet who never properly justify their past string of failures, and past numerous chapters of baseless mythology upon which the USEconomy has been built and continues to rest. The US has adopted the Weimar financial plan, complete with high risks. The cast of foreign creditors and major trade partners have almost all begun deep commitments for a new IMF global reserve basket of currencies to temporary displace the USDollar. They have almost all begun deep commitments for international trade settlements outside the USDollar, like for crude oil. The primary adversary is clearly the Chinese, who have among other steps installed Yuan currency swap facilities worldwide.

The combined effect is to knock the USDollar off its perch in global reserve currency status. The Chinese hold the spearhead to de-throne the USDollar. Behind the scenes, the Germans work steadily to remove the US and UK from their perch, clearly held by strong-arm means like with interventions in markets too numerous to name. The easier question is which market the US & UK tagteam do NOT intervene to render out of equilibrium. The point is that the entire world has shown early and urgent commitment to move AWAY from the USDollar, not toward it. They do not seek safety and security in the USDollar arenas any longer. They drive the new Paradigm Shift.

PARADOX OF MONETARY SOURCE

A great paradox has come home to roost and be felt. Harken back to 1971 when the US under the errant leadership of Richard Nixon. The US broke the Bretton Woods Accord that dictated gold to anchor the USDollar in the global financial system. The Vietnam War and the Great Society programs at the time resulted in a quick run on US gold held in Fort Knox. That supply is 99% gone now, after the Clinton-Rubin Admin engineered their own Decade of Stolen Prosperity. They brought the gold lease rate to nearly zero, spawned a Gold Carry Trade, gutted the USTreasury of its gold, financed private gains for Wall Street in the hundreds of billion$, and rendered the US financial system vulnerable to collapse.

The paradox has come full circle. When a nation steps forward to declare itself the lead engine in the global economy, the lead police cop with global military reach, and the lead capital market in Wall Street, it does so at a great risk when it serves as custodian to the global reserve currency. In the initial decades, the risk is minimized. The risk is that the nation holding control of the global reserve currency, the USDollar, must supply new funds for capital formation, for credit extension, for government finance, for continued functions of myriad types. The grand wellspring has a US$ brand on its liquid product that is essentially inflated unendingly. In the initial decades, the monetary base was inflated for productive purposes. Some would argue fervently that the entire USMilitary buildup with so-called Star Wars was the basis of exiting the strong 1980 recession.

The initiative earned the US a Pyrrhic Victory, leaving it wounded in victory. At least a significant swath of new money and new credit was devoted to capital formation in the next decade or two, in forming businesses, and development of the USEconomy. Not until after 2000, did the United States embark on highly destructive economic policies that would quickly fail. Refer to the dispatch of much US industrial base to China from 2000 to 2005. Refer to the rekindle of the housing bubble, the establishment of home equity ATM machines, the raid of home equity for consumption purposes. Refer to the wars in Iraq and Afghanistan, regardless of their purposes, but with heavy crippling ongoing costs. In the last year or more, the sanctioned purpose of new money and new credit, again without basis or tangible backstop, has been the flood of rescue funds to the banking sector. This is the same banking sector that spread fraudulent and toxic bonds around the globe during the same housing bubble, which has a matching mortgage finance bubble.

The destinations of the new money and new credit in the last year or more have been destructive, non-productive, and probably loaded with yet more fraud. An economy that must function without a sizeable portion of its industrial base cannot remain stable, yet alone thrive. An economy that has been led to dependence upon housing bubble equity, otherwise known as inflated asset as collateral, cannot remain stable, yet alone thrive. Refer to the challenge against the USFed itself to reveal first the usage of the TARP funds, and second their entire balance sheet. My view is straightforward. The destination of the majority of funds in the last few years has been for syndicate purposes, for private gain, with the defense establishment and the banking sector. My view is that high crimes are involved, and that USGovt agency protection is offered routinely. Refer to the Goldman Sachs insider trading unix box that monitored and exploited order flow information, complete with front running, all tidily covered up.

Here we are at the end of an era, where the USDollar sacrificed itself for the system. The high risk of the paradox is that late in the pathogenesis, the nation that benefited early in the cycle must endure powerful forces that bring a collapse of the currency that provided the wellspring of false capital. THE RISK IS OF A USDOLLAR IMPLOSION, AND WRECKAGE OF THE US BANKING SYSTEM. The currency served its purpose, and the cycle comes to an end. Originally, the benefits were global toward the flourish of capitalism. Lately, the benefits have been for the syndicate in its war machinery and the banking sector responsible for bond fraud. The gradual and inexorable decline of the US banking system will continue without interruption, only pauses to fool the gullible, the ignorant, and the unwashed masses of vassals. The global revolt against the USDollar is surely a loud signal, enough to herald a new foundation in the making with key alternative structures. The US$ cannot co-exist with a new system underpinned by a different vehicle as foundation. The IMF basket of currencies is but a temporary device, as the new currencies backed by hard assets are to be delivered by the Monetary Stork. Their hatch will be difficult, require much careful planning, and must endure military threat.

The end stage, part and parcel to the paradox stated, is that the USDollar must die its death, assured when departure from the gold backing was permitted and agreed upon. The more capably the economy and financial sector is managed, the longer the process before the forced death of the system itself. In this decade, the Mussolini Fascist Business Model has embraced and promoted syndicate activity, with merger of big business with the state, to such an extent that the system is ripe for failure. A failed state comes.

This process has a parallel, the human birth ensures an eventual death. The US$ without the gold tether guaranteed its death, all in time. The time is upon us, as the US$ is going through its stages of death. First is denial. Second is alternatives in construction. Third is anger with vengeance. Also, the US banking system is going through its stages of death. Their ongoing fresh asset losses continue to outpace their new infusion of capital or funny money funds granted by the USGovt, delivered from the Printing Pre$$. Refer to their hidden housing inventory from foreclosure, along with the Prime Option ARMortgage losses, in addition to the commercial loan losses. The US banks cannot be revived any more than Humpty Dumpty can have his shell glued back together after a fall in disgrace. The banks maintain a charade in order to continue to channel funds into their balance sheets, to enable stock sales to the public while executives sell out, and to permit elite overseas bank accounts to be filled. They are buying time hoping that borrowing at 0% and investing in long-term USTreasurys will replenish their balance sheets, mostly in safe keeping at the USFed itself, and NOT LENT. They race against the Grim Reaper seeking out toxic assets.

THE SILVER PALLETTE OFFERED

Few opportunities are so striking and promising. One can purchase silver under $17 per ounce. One very well connected colleague said recently “Silver is an absolute steal at any price under $20, but the coming breakdown in the Western banks and monetary system will be centered on their gold mismanagement.” The silver price filled an early October gap evident in the faster charts. In the view shown below, the old resistance, now new support at 16.1 held firm. The price revisited the 50-day moving average. The moving averages are all on the rise. Who knows? The price must have felt the urgent need to touch the 50dMA after having spent all this time since mid-August above it. Nah! The Powerz are scared white, are soiling their stolen underwear, and are increasingly desperate.

They get away with their corrupt games, using paper still to push down metal prices, as they anger the world further. They motivate the search and establishment of alternatives to the USDollar in its key role. The real motive was the huge $115 billion in USTreasury for sale at auction this week. They needed some cloud cover, and a listless US$ rally would serve the purpose. The ultimate problem they have is the grossly inadequate silver supply in physical form. They more they offer silver at a deep discount, the more they drain their physical supply for delivery, and the more they tighten the noose around their own necks.

1

The USDollar is the object of international scorn. No credible evidence whatsoever indicates a global flight to the USDollar. In fact, a deeply oversold condition has persisted for several months. The Buck cannot find its true value well below the 70 level unless it relieves the oversold condition, finds some semblance of contract balance, enables fresh new shorts to be put into place, and allows time to pass as the world continues its abandonment. The Paradigm Shift away from the beleaguered discredited USDollar continues on a path that cannot be reversed. The nations that depart from it will be the leaders of the next era, plainly spoken. The US$ DX index seems to search for technical validation, like a touch of the 50-day moving average just below the 77 level. Either passage of time or a slight increase will manifest a touch. By the way, now that the week is almost over, and most of the USTreasury auctions have been completed, the USDollar has executed an ‘Outside Day’ with a higher intraday high hit, but a strong selloff in reversal, to log a close at the daily low. It seeks its true wrecked value.

2

ABSENT REFORM VERSUS CONSTANT PROPS

The latest Gross Domestic Product data for 3Q2009 is illustrative, out today. The USEconomy supposedly grew by 3.5%, if you believe their methods. Not here! Fully half of that growth was attributed to the Clunker Car Program, which cost $9 to the USGovt for every $1 in saved fuel. Government at its best, trading amplified debt for ineffective so-called growth. Also, 0.9% of the growth announced was attributed to inventory drawdown. Lastly, imports grew at 16.4%, against 14.6% for exports in the quarter.

So the USEconomy is attempting slowly to revert to its broken model of importing what it needs, often for consumption purposes. The buzz among financial commentators and anchors is that the USGovt cannot possibly withdraw its stimulus, because they would send the economy back to where it was before it required the stimulus. They are essentially admitting the USGovt financial leaders are stuck with constant state of stimulus. The Uncle Sam patient is stuck in the Intensive Care Ward. He cannot walk alone or even with a crutch, as he has too many intravenous lines and monitors plugged to his decrepit body, that even a medical school would reject for a free cadaver under study.

True reform is noticeably absent in the last year. Liquidity facilities led by the USFed do not qualify for reform. USGovt purchase of the Treasury Inflation Protection Security (TIPS) that ruin the measure itself do not qualify for reform. Nationalization of the General Motors and Chrysler do not qualify for reform. Installation of numerous czars without Constitutional powers that form an American Politburo do not qualify for reform. Stop-gap ass-backward programs like Clunker Cars certainly do not qualify for reform. Prosecution of a non-New Yorker hedge fund manager of Indian origin for insider trading does not qualify for reform.

Watch the battle to pass an expansion of the federal debt limit. That should be interesting, even explosive. Watch the battle for bank regulatory reform, which is nothing but a power grab by the same guilty parties who perpetrated the bond fraud and urged the lax bank system oversight. Watch the vapid baseless inept running commentary from the USFed on solutions and the current national condition, along with the plans for an Exit Strategy. This same august clown crew offered continuous blessing of the housing & mortgage bubbles as legitimate, misjudged the bank loss magnitude, and did not even anticipate a recession.

The battle is on against a permanent stranglehold of the US financial ministries and function, for syndicate control versus some semblance of populist control. Watch the battle for disclosure of the TARP funds and the USFed balance sheet. This is actually a legal crowbar to reveal syndicate activity, which in all likelihood includes money laundering of narcotic funds. Word came a year ago to my desk that disbursal of TARP funds involved significant foreign extortion to avoid legal prosecution of bond fraud, replete with murder threats of Wall Street executives.

THE HAT TRICK LETTER PROFITS IN THE CURRENT CRISIS.

From subscribers and readers:

At least 30 recently on correct forecasts such as the Lehman Brothers failure, numerous nationalization deals such as for Fannie Mae, grand Mortgage Rescue, and General Motors.

“You freakin rock! I just wanted to say how much I love your newsletter. I have subscribed to Russell, Faber, Minyanville, Richebacher, Mauldin, and a few others, and yours is by far my all time favorite! You should have taken over for the Richebacher Letter as you take his analysis just a bit further and with more of an edge.” -   (DavidL in Michigan)

“I used to read your public articles, and listen to you, but never realized until I joined what extra and detailed analysis you give to subscription clients. You always seem to be far ahead of everyone else. It is useful to ‘see’ what is happening, and you do this far better than the economists! I can think of many areas in life now where the best exponent is somebody not trained academically in that area.” -    (JamesA in England)

“A few years ago, I was amazed at some of the stuff you were writing. Over time your calls have proved to be correct, on the money and frighteningly true. The information you report is provocative and prime time that we are not getting in the news. I was shocked when I read that the banks were going to fail in one of your prescient newsletters.” -    (DorisR in Pennsylvania)

“You seem to have it nailed. I used to think you were paranoid. Now I think you are psychic!” -  (ShawnU in Ontario)

“Your unmatched ability to find and unmask a string of significant nuggets, and to wrap them into a meaningful mosaic of the treachery-*****-stupidity which comprise our current financial system, make yours the most informative and valuable of investment letters. You have refined the ‘bits-and-pieces’ approach into an awesome intellectual tool.” -    (RobertN in Texas)

by Jim Willie CB
Editor of the “HAT TRICK LETTER”
Home: Golden Jackass website
Subscribe: Hat Trick Letter

Use the above link to subscribe to the paid research reports, which include coverage of several smallcap companies positioned to rise during the ongoing panicky attempt to sustain an unsustainable system burdened by numerous imbalances aggravated by global village forces. An historically unprecedented mess has been created by compromised central bankers and inept economic advisors, whose interference has irreversibly altered and damaged the world financial system, urgently pushed after the removed anchor of money to gold. Analysis features Gold, Crude Oil, USDollar, Treasury bonds, and inter-market dynamics with the US Economy and US Federal Reserve monetary policy.

Jim Willie CB is a statistical analyst in marketing research and retail forecasting. He holds a PhD in Statistics. His career has stretched over 25 years. He aspires to thrive in the financial editor world, unencumbered by the limitations of economic credentials. Visit his free website to find articles from topflight authors at www.GoldenJackass.com . For personal questions about subscriptions, contact him at JimWillieCB@aol.com

Jim Willie CB Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife