Monday, December 31, 2012

Monetarians Vs Fiscalites

Ben Bernanke coined the term "Fiscal Cliff".  That is public knowledge now.  But how did he in charge of monetary policy have the fore sight to label the greatest debacle since the last debt ceiling increase before anybody else could?  Because he wanted a smoke screen for his horrible monetary policy.

He instituted QE4Ever right before this debate so that no one would discuss the continued propping of the monetary system.  Then he sat back like a bandit with the King's Ransom and let Congress throw banana peels at each other like a barrel of caged monkeys.

Either way it is cut both groups (the Monetarians and the Fiscalites - those in charge of such policies) are using fallacious terms to engineer debate, but the more dangerous one is the current monetary policy.  The fiscal policy can be justified but the monetary policy is built on absolute lies.

Should we increase revenue?  Cut spending?  I wouldn't say I know what to do, but I do know the current monetary policy will wreck the economy.  The Fed heads know this and that is why their think tank coined the term a year ago.  Now that all eyes are on the Fiscal Cliff they can sit back in their counting houses and flip their monies.

Thursday, December 20, 2012

End of the Year Action

Recent market action is a harbinger for wicked things to come.  The selloff in precious metals comes on the heel of higher rates and that on the back of QE4Ever.  You wouldn't think this makes sense but as Bernanke follows the Art of War he wants to do the exact opposite of what everyone expects.  Iniatially anyway.

The fact that the Fed will now monetize $85 billion bonds per month will wreck the same havoc as all the other programs before it, but we are reaching end stages and so this time it will be much more evident.  But so it is not evident right away the Working Groups behind the scenes will hold up the levy until the MSM circles onto another dying carcass.  For if the public was made awware that Bernanke's monetary experiment would end the financial system as we know it there would be panic, and the last thing the experiment wants is panic.

So on light trading precious metals may continue to fall.  The worst is likely over but who knows.  The debt debacle will continue until late January at which point either the system continues on the highly leveraged and inflationary path it is on or it all comes crashing down.

Any way this is cut bullion will be the safest road.  Now is as good as any time to buy, for in the months to come, the prices will get higher.

Wednesday, November 28, 2012

The Never Ending Inflation

Inflation compounds on itself like a bad story.  The opening is bad, the plot points are lackluster, it drivels along, and then at the end the whole story is in shambles.  This is exactly how inflation will read on the pages of history.

The Federal Reserve was a bad idea.  It was ill conceived to believe that a private cartel of bankers could every have the States best interest at hand.  It was ill conceived to think that having a domestic fiat note would work and it was moronic to use fiat as an international standard that replaced money.  This because not only would inflation wreck havoc on the cost of assets but because there would be a turning point when fiat goes up in smoke.

It could be that the point is looming near, or maybe it will be a year before fiat goes up in smoke.  Either way, having a standard backed by nothing other than the promise to pay means there will be an end, and like a bad movie, people will want their money back.

Wednesday, November 14, 2012

The Great Wash

FInance has been a clusterfuck for a long time now.  Every year an investment that was a great idea is suddenly the worst and vice versa.  We had the dotcom bubble, then everyone decided to flip houses, and huge sums of money were lost.  Now Americans are scared to make any investment.  They are scared of inflation but don't want to buy stocks because of yearly budget crisis.  They are scared of taxes and so after dividend paying stocks being the go to investment of the last year they are being sold but municipal bonds are in a bubble so don't buy those.  Bonds are in a bubble so don't buy those either.  Dollars aren't earning any interest at the bank so don't put your money there.  Basically there is nothing for people to invest in anymore.

At least that is what the MSM would have you believe.  The pundits and media have scared people because the system was created out of lies and sold to the highest bidders and the cat has been let out of the bag.  But the one thing that is a good investment falls on deaf ears because of conditioning rhetoric.

Precious metals are discussed frequently on this blog so I will assume the reader understands the benefits.  Instead I will use the rhetoric the MSM does.  They don't pay interest, they just sit there and aren't productive, and they are volatile.  Of course these are only some of the reasons to buy.  Buy at an affordable price or make monthly purchases, there is no counter party risk, and what is interest other than a syphoning of funds.

The Central Bank policies and MSM have destroyed investments in a great wash of the last several decades and now Americans run around scared as cats losing their wealth behind every bush.  The great wash will continue and soon the cats will either be broke or finally stop listening to the bells and whistles and make a good investment into real money.

Wednesday, October 24, 2012

The Looming Shortages

One of the only things I have walked away from the study of economics with is the law of supply and demand.  It may not be as cut and dry as the books teach, but the over all theory works to find an equalibrium concerning price.

This summer we have seen some very important goods fall prey to shortages of supply.  The first was corn and other food staples.  Because of this many farmers slaughtered their animals because feed was high priced.  So soon we will see shortages of meat.

Another supply concern is that of precious metals.  Platinum miners went on strike in South Africa and were followed by gold and silver miners.  This will create a supply crunch down the road.

As for precious metals, investment demand has been quelled by paper products.  This will not help industrial demand.  If there is ever industrial shortages the price will rise.  This is one reason rising investment demand may help create price appreciation - it could squeeze industrial demand.

Food products are not so easily created.  People can eat less meat if the price rises too high, but since everyone eats the inflation will be obvious to the status quo.  Precious metals can rise and not everyone cares.  Many people think gold is a barbarious relic; they don't understand that it is being used to shore up Central Bank balance sheets across the world.  They don't understand that in every cell phone there is fifty cents worth of silver.  They don't understand there is platinum in every catalytic converter.  They don't understand that gold is in every computer's mother board.

With rising costs due to monetary policy, with rising costs due to peak resources, a major supply crunch will throw a wrench into the system.  I expect the above two examples (meat and metals) to do just that next year.

Sunday, October 21, 2012

Precious Metals, Asian Trading, and the Election

While precious metals have moved lower over the last couple of weeks, the dollar has not budged.  Since last summer there has been a disconnect in the long trend, the long trend which had the dollar move inversely to all assets.  First the dollar strengthened, stocks fell, but gold moved up - this was the case last August.  Then the dollar stayed flat while gold fell and stocks moved up.  Now we are in another round of capitulation where the dollar stays flat while assets move lower.  The message to take away from this is that another major move is at hand.  Capitulation of a trend always results with such.

What will the next move bring?  Nothing is certain so let's analyize what has happened in the past to best understand the future.

One of the greatest moves of capitulation, and something still fresh in my memory, was the huge drop in silver in the Spring of '11.  Let us not forget when the move happened - it happened in overnight trading.  Asia was the live market when it happened.  This means one of two things:  Either China and other Asian States took it down, or JPM and Co. have great access to those markets.  This means that we should not trust Asia to support the Precious Metal market.  They are supporting the Status Quo just as much as any of them.

Now let's move to the current happenings - the election.  One of two things are happening here:  Either the Blue Team and the Red Team have agreed on terms for oil, gold, and stocks, or there is no more either/or  and there is now a Purple Team who have an exact idea of what will happen.  Although oil and gold is high, it could have gone higher by now if the Fed had juiced the flow of funds.  This would have had stocks higher and pensions and IRAs/401ks with them.  I think that people closing in on retirement are blind to what rising gold implies (the death of fiat instruments) and higher stocks would have trumped higher oil prices.  I think that higher asset prices would have been in Obama's favor for this reason.  The fact that they didn't move higher and that corporations are reporting poor earnings shows that the CEO class is pro GOP.  Yet economics (Neo-Keynesian theory) have set the table for the Democrat party.

If Romney wins he says he will label China a currency manipulator from Day One.  This has heavy implications because the world will know how weak Romney is from the get go.  If he doesn't give China this label he is a Flip-Flopper of epic proportions, but if he does then he is willing to sacrifice the dollar for the favor of the Corporate Class.  I say this because if China strengthens the Yuan it will take the dollar down by 20% over night, and will then force a run on the dollar that would equal another 20%.  This would see stocks rise, albeit equal to the dollar's drop in nominal terms, but basically if you are like most people and don't have your life savings in stock you will be broke.  Wages will not rise proportionally either.  Hard assets will also rise, and who can buy gold for $3k?  Not many people.

The fate of the dollar has an enevitable one, but with Obama it will happen more slowly.  I am not saying one choice is better than the other, but I want to make this observation so we know what will happen when the election happens.  I think that until the election the game will be on pause.  Sometime after  the election, maybe in November, maybe December, but by January, the fate of America and the dollar with it will come to pass.  The Fall of the dollar will last for a few months, upon which time it will die and a New World  of old will emerge.

Wednesday, October 10, 2012

The 9th

We are now about to witness the first pitch of the top of the ninth.  The Fed will issue its MBS buying for the month tomorrow (the eighth business day of the month) and serve up half a trillion dollars out of thin air.  These dollars will be used to front USTs to the PDs and fractionally reserve assetsso to keep the system leveraged.  What we have seen since the QEX announcement has been a rearrangement of chairs on the Titanic - it's all going down man.

It starts tomorrow and the top half will last until about January 20th.  During this time the system will be releveraged by about 10:1 from where it is now.  After that and until about March 30th the system will be releveraged again 10:1.  The leverage from where we are now will be 100:1.

I think that everyone who reads this blog already knows what is about to happen (all FX is about to get thrown in the furnace of the Central Banks).  I think by January 20th anyone paying an ounce of attention will notice that the fiat system is slipping into oblivion (they will notice because of higher gold prices).  I think by March 30th everyone will notice (due to significantly higher gas prices).

I am looking at the DXY retesting 81.5 next week and then moving sharpley lower after the Fed not only buys more MBS but loans against them and expands their balance sheet.  I think this will cause gold to move higher.  It will take silver with it.  Oil will move too as it is a part of the complex but it will lag if only by inches. 

Tuesday, September 25, 2012


We have a new said program.  Not only did we know it was coming we knew it was never ending.  I had long dubbed this one "QEX" because it is the tenth round of easing since the Fall of '08 but little did I know the X would stand for infinity.

I read the white paper that details the program from the NYFRB and I found it to be vague.  I did take some tid bits from it however.

The majority of the buying will be on the eighth business day of the month, but MBS buying will continue until the end of the month.  The $40B monthly program is also only targetting that stated amount.  They will buy more all the way until the end of the month if needed.

The unsaid part is even more scary.  Since the Fed is like any other bank they will be able to fractionally reserve their assets and rehypothicate them at will.  This means the new program will total over half a trillion dollars per month of unsterilized dollars.  Combine this with the OT2 program which is sterilized and we get another half trillion dollar program.  This means that the Fed balance sheet will expand to at least $1T per month.  Yes, that's right - per month.

By my best guess the new program will begin on October 10th.  I expect it to blow asset prices out of the water from the get go, so the window to buy precious metals and get your house in order is closing.

I will also add my bugout bags were completed a couple weeks ago when I bought a ceramic water filter hand pump.  I have food, PM, friends and family and a way to get water.  I think that this financial and economic system will last only months from here.  Please make sure you have everything you need now.

I will point out that after the dust settles the world will be better off without the current financial system.  It will be harder for Americans, because oil will not be as easily procured due to the loss of a world reserve currency, but I think it will make us appreciate life that much more.  People will have to make their own clothes, garden, etc, but I think that work is good and it will bring us closer to the earth.  I think that we will keep the power plants on, even if they run at a lower capacity.  I do not see us going head first into a Mad Max scenario.  But I do think there could be weeks if not months of confusion which is why it is important to have that amount of food and water and barter and money.

Wednesday, September 12, 2012

QE Whatever

Are the markets expecting another round of quantitative easing?  Or are they just experiencing the massive devaluation of the fiat currencies of the world?  Either way prices have risen dramatically in the last couple months.  Oil is up and precious metals have made a move we have been expecting for a couple months. 

Tomorrow Bernanke will open his mouth.  No one knows what he will say.  He has been leaning towards announcing further easing of monetary policy but who knows if tomorrow will be the day it is announced.  We should note that policy is currently easy as POMO operations and Operation Twist 2 continue.  This is keeping their low interest policy in line.  This is important so the UST can continue to pay the interest on the debt.  When rates rise then the UST is bankrupt and the Fiat Ponzi, on the back of the dollar, ends.

I wrote awhile ago that precious metals would begin to move up in July.  They did.  Now they are back in the middle of the long term range.  This is a great time for them to consolidate.  1740 has held for a few days now and is poised for another move higher.  I think we will see $1900 in the next month.  Silver is also in the middle of its range and I think we will see $40 by the end of the month.

The future will see both metals double after that.  The whole financial and economic structure is completely unstable.  Fiat currencie has over saturated finance.  The bond market is subject to collapse due to artificial demand from the Fed.  These two sectors are killing each other:  the Fed prints dollars to buy bonds but the bonds lose value due to the ever inflating dollar.  This is creating a dissenence not ever seen before in finance.

Whatever happens tomorrow will not matter in the long run.  In the end gold and silver is money and the Fiat Ponzi will fail.

Saturday, September 1, 2012

Bank Policy Tools

Anyone surprised when the Fed does not announce "QE3" and stocks don't sell off is a fool.  This is, and has always been, a centrally planned market.  The Fall of '08 was planned, as the PWG likely shorted stocks on their way down.  The rise of prices was planned, as is dictate by Neo-Keynesian economics (to lower the value of currencie to "support" prices) to get out of a recession/depression.  And now there is no going back.  If stocks fall, if there is another crash in equity, then it will be shown that the Fed failed, that the governments of the world failed.  Maybe this is what the policy makers want.  Maybe they want their New World to feature no governments and no Central Banks, but I think we are still a couple years out from that if that is the end.

Until then the policy makers can do whatever they want to meet demands.  The Fed is still printing money.  They never have stopped since their inception.  The UST issues debt and the Fed prints dollars.  They can continue to purchase bonds without QE.  They can loan dollars by fractionally reserving them and they do not need to tell anyone.  These policy tools will keep the status quo in line for awhile.

The only thing the Fed can not do is print gold, and because they use it as a reserve on their balance sheet (they base loans off of gold) that means that they will use it to balance out their liabilities.  This means gold will have to go up.

So now we see the dollar's value must go down (to increase exports and "support" asset prices) and to do so gold will rise.  The Fed does not need to issue another QE for now as they continue POMO and OT2.  They will also loan gold out which at first will quell demand and add supply, but in the long run they will be loaning gold out at 100 to 1 and when they reign in the loans gold will spike huge.  These policy tools will only last so long, but they will mitigate the economic problems the Fed sees for a few more months.

Thursday, August 16, 2012

Rising Rates

Rates will rise.  This is a given.  Rates could fall further in the near future (the long bond, if not already negative, could be negative in real terms even by the Fed's guage if rates continue down), but Bernanke says they will rise sometime in 2014 (how about that for telegraphing?).  So what happens when rates rise?

First let's address who owns the debt.  Central banks own most of it, and then investors own the rest.  The investors are everyone from millionaires to 401k holders.  They have been passed the debt from institutions, who also own some debt for their own purposes (JPM's prop desk, for example).  So this debt has traveled the financial world to encompus many owners.

Where finance is concerned there are two distinct scenarios which can engulf the landscape and they are inflation and deflation.  So far we have seen inflation in such hard assets as gold and oil.  Deflation has been unrelenting concerning housing and wage increases.  Debt finds an interesting place between the two because in this environment (and we could debate if we are currently in an inflationary or deflationary one) rates have fallen while the bond prices have increased.  This should be signaling deflation, but prices of goods continue to rise, confusing the issue.

When rates rise the value of bonds will drop.  This will crush the bond trade.  Sure, many people hold bonds until their maturity, but bond traders don't.  These traders will be passing hot potatoes as they fall in value, and the value will be dropping quickly.  For every 1% that the rate of the ten year goes up, the value will drop 14%.  This is a huge loss for bond holders.

That is what will happen to the bonds, but what will happen to the holders?  Pensions and 401ks will drop in value and people will lose the value of their savings.  For the Central Banks their balance sheets will be blown out.  These banks are holding these bonds and will need a counter balance for the banks to stay at par.  So an asset will rise in the bonds place.  What will it be?

The banks could fractionally reserve their assets.  This means they would loan them.  They could loan dollars and other currencie, or they could rehypothecate gold, and other reserves.  Any of these options would be highly inflationary.

Finally, if rates rise investment will run from bonds which will force the Central Banks and their proxie holders to buy more and this will force them to compound loans to make up for the losses.  We can conclude that when rates rise we will enter a very inflationary environment until rates rise to a point higher than the inflation rate.  Bernanke says it will wait until 2014 to start the rise in rates.  How far they will have to rise to cap inflation from getting out of hand has not been discussed.  Let's see if deflation is strong enough to keep the inflation damn from breaking until then.

Monday, August 13, 2012

The Furnace

There is a basement in hell which keeps the status quo going.  It is comprised of dorito eating demons who are in charge of such various things as maintaining as many eyeballs on televisions sets as possible, shoveling as much fiat currency in hell's main furnace as possible, and there is a special room for the Artist (Formally Known as Prince) to write as many pop songs as possible.  It is by making sure the masses ignore the "monie" printing that the demons fulfill their objectives of continuing the paradigm of hell across the land.

State of mind is as important as IQ, and so the culture washes the brains of the masses with garbage repeatedly.  This is the ultimate distraction.  All the while it has created "sciences", equally justifiable to the brainless masses, to exhibet the "truths".  These truths consist of such filth as the "rational consumer theory" and "fiat monie principle".  So while all eyes are on pop culture, the demons use their lies to set up the biggest con known to history.

Lies create lies, for he who gets away with a lie will live to tell another.  There is no stopping the system of lies now, for the lies have come this far, and there has always been a timetable for an end of the Fiat Ponzi (devised near the furnace in hell by JP Morgan and JD Rockefeller).  When was it originally thought to end?  2012?  2020?  We have numbers now to determine such a time, and considering every resource from iron to oil appears to have peaked we can conclude that it will be a short order until prices of real goods sky rocket.  This while people are told they will act rationally in good times, and do the same in bad.  This while the masses base the wealth aggregate on how much debt is accumulated.  This while people turn their brains to mush for an average of eight hours per day.

So while the world turns the demons shovel fiat currencie into the furnace in hell to power the system, and we are told this is what will keep the earth turning, not knowing that it is not earth that is propped up by the demons efforts, but hell itself.

Wednesday, August 1, 2012

The Insiders

The FOMC minutes came and went and surprise surprise, they read with no new measures.  The committee sees the recovery on track, albeit it taking hold slowly.  They have the tools ready if needed.  But now is not the time.  So was it surprising when, with 3 minutes to go in yesterday's trading, a contract of ES futures sold for $4.2B?  Was it surprising that Bill Gross said "stocks were dead".  Was it surprising that algos went haywire with selling this morning?  Not when insider trading is the norm, and anyone on the inside uses their connections to the Fed to trade according to plan.

I have long said the Fed's dual mandate is actually i) to confuse the "rational" consumer and ii) to maintain the status quo.  Sure, I also say that the system is based on a metric, the dollar, with no value, and that it will ultimately collapse in the face of truth, facts, and reality, but that does not mean that the status quo can be maintained for awhile longer.  Remember, the system can stay irrational longer than you can stay solvent.

One of the main reasons that is the case is because if you have a financial adviser then that person is likely not on the inside, or if you are a do-it-yourselfer, you are not on the inside.  Even the inside boys struggle.  Sure they can make a glove save and trade ahead of the Fed, but that won't mean great returns when there really is no investment in the "lost decade" (this is what financiers are calling it) that is making people well off (except for PMs).  So Buffet and Gross, with their stocks and bonds, yield 3% annually and their clients maintain a semblence of their lifestyle.

Years from now it will be seen that inflation persisted, and that the real rate of return on must investments was negative, maybe flat at best.  It will be realized that holding fiat in a bank lost 5-7% yearly.  It will be known that the trends of higher prices continued even though every financial blogger hung on the Fed's words and thought deflation was underway.   The reason for this is that even though QE 3 hasn't happened, ZIRP stays, the UST issues unreal debt loads, and the Fed continues to clear through POMO while they flip USTs from PDs T+1.  This is all inflationary, and more than anything, not issuing QE 3, by allowing the rumor before the news, is holding back a tidal wave of inflationary pressure.

Like the tides of the oceans, the Fed let's finance wash in and out of QE expectations.  I think if the Fed just came out and said no QE ever again it would be more inflationary than waiting for QE 3.  The reason is, if people did not think the Fed would ease, they would chase yield, and assets would be leveraged.  Instead financiers sit on their hands and then when nothing happens, well, it is expected soon.  This holding pattern keeps the status quo in line by keeping expectations fixated on QE like a deer in the headlights and it freezes the inflation that is constantly building in the system because of the debt that is doing the same.

The Insiders know this and they also know when to make a trade and how to make a trade.  They trade the rumor and then trade the news, and thus wash enough of a return to keep the system from falling apart.  By working with the Fed they maintain their system of power.  This system won't last indefinately, but it will go on as long as it has to.

Monday, July 30, 2012

The Philosophy of Economics

Paradigms usually change before people realize they have.  Those who can see a trend are usually thought of as gurus for this reason.  They are the people warning of a bad winter.  They are the ones who know what will happen next, and how to prepare.

When it comes to economics, nothing has changed for decades.  Economics has become a science taught at Universities that use textbooks of the policy makers.  People pay a lot of money to learn what is thought of as an infallable study.  Finance has used this study to base business on.  The concepts have been discussed at length here, such as fiat currency, the rational consumer, and others.  SOme of these theories are accurate enough to use in simplistic terms, such as supply demand, but any thoery is just that:  a thought, an idea.  There really is nothing concrete about economics.

I like to think of economics as a study of philosophy.  Something that has a lot of merit, worth, and use, but is not and can never be nailed down.  It can be proven given certain paradigms, but when the paradigm changes, the study should change with it.  With philosophy, we have grown from not needing to use god as giving the laws to understanding the philosophy of science.  It isn't that god may or may not exist, but with science we can deduce certain rationale.  We can do this by the philosophy of logic as well.

Yet with all of the great ideas of recent study in philosophy, the likelyhood that these ideas will too change is great.  As a culture we are always learning, and thus we must not constrain ourselves inside old paradigms.

Neo-Keynesian economics constrains us.  And it the dialectic should not put up the Austrian School as an absolute, or else we are caught in the Hegelian dialectic (another philosophy proven to have holes).  But what we need to do is understand that times have changed, and we need to use new theories, or old ones we are not currently using, to make sure a paradigm shift does not catch us off guard.

My worry is that this is happening now.  The economy, and finance with it, has changed drastically in the last 40 years.  Wee have moved off a gold standard to creating an insurmountable debt that will never be paid in full, and the answer is too continue down this path like it is the only way.  We must stand back so as to see the forest through the trees because the forest may be much larger and complex than we thought.

Or maybe the forest is a simple forest.  One where we could create orchards and use the rivers and lakes to create a utopia.  WHo knws?  But we should not focus on absolutes, for the forest, as nature, will continue to change, and we should change with it and not against it.

Tuesday, July 24, 2012

Dr Bernanke and Mr Chairman

The crux of the economy lies on the fundamental theories of economics:  the rational consumer theory that declares all consumers rational and that the consumer will save money during good times and spend during bad, the debt/fiat money theory that the metric of the dollar is sound, and other such theories.  Finance uses these theories to run money, so it is important for economics to use theories that are susceptible to the financiers wishes.  It was of course bankers, and not economists, who created the Federal Reserve system when a group met at Jekyll Island.  Basically the "science" of economics is a bastard child of finance, and has no more to do with science than baseball.

When Dr Ben Bernanke, a highly esteemed professor of economics, became the Fed Chairman, he did so knowing full well he was about to become the world's most powerful banker.  About 7 years later he relishes in the role.  He understands the banking system like Dimon and Blankfein do, and as an economist second.  He wants to bail out the banks.  He wants to keep the racket going.  He wants to make money.

Whatever good intentions exist in the "science" of economics are done away with once bankers and corporate financiers get ahold of the metrics.  What policy has helped unemployment?  There hasn't been one.  The only policies used have kept the Fed's proxy banks afloat so to keep the status quo in line.

Many PhDs in economics are useful patsies.  There are math problems that can show demand and price constraints, and "look we can do this and that" and then they go home for coffee and collect their paychecks.  Bernanke may have been like this before he was Fed Chair, but once he tasted the power of the bank, he accepted his role and now funnels trillions of dollars to the banks and wipes his hands clean of any other work.  Call it economics, call it finance, but more than anything, it is a control system that keep the finance class high on the hog at the expense of everyone else.

His mandates are much different than what is told.  The first is to confuse the "rational" consumer.  Remember, the market will stay irrational longer than you can stay solvent.  Look at the gold miners.  How can they be going down still while the bullion has been rising?  It is not rational.  How can stocks be up?  Bernanke is using the dollar to buy into stocks.  An economist would have lowered the value of the dollar to increase exports.  Bernanke the banker is spending his dollars buying corporate stock.

As scary as economics is, considering it is used as a science but is more of a philosophy, the banking system is worse.  The banking system uses economics to get what it wants, and it wants total control of the monetary system.  Bernanke has switched from being Dr Bernanke to Mr Chairman, and as a banker, the world's most powerful, he will bring in the system of total banking control.

Saturday, July 21, 2012

The Set Up: Corporate Vs. Federate

Whether the economic and thusly the financial system were set up to fail at this point could be a moot topic; the fact is both will fail.  The triggering event could also be discribed as irrelevent, as almost anything could destroy these fragile systems.  Yet to know where we are going, we should look to the past.

The people that set up the system, that payed for it and paved its way, were corporate types.  They were men who wanted to shield their business with corporate personhood.  They had an agenda, and their agenda was to create a system which they would have complete control over.  Every beginning has an end, and so these men likely knew they would need a plan on how to move into their final system.

So what will the trigger point, the Black Swan, be?  Could it be a war in the Middle East?  Could it be a war in the Far East?  Could it be the Libor Scandel?  If anything, all of these problems could break at once, setting in motion the destruction of the economic and financial paradigm that has existed since around the Civil War, when corporations were thought to have equal rights as men do, because the system is built on faulty logic at best, as it is also built on lies and deceit.

There are likely two factions of what some call the power elite, some call the Illuminatti.  There is one faction who wants a Federated Government controlled system.  The other side of the coin wants a corporate controlled system.  So far these two systems have shared power and have done it well according to the New World Order agenda.  But I think that both control systems imagine a New World Order where only one reigns supreme.

We have witnessed a failure of the "government" by way of the Federal Reserve system, but how many people think that this is the truth?  Universities are still teaching Keynesian economics and the Fed Chairman is still seen as saving the economy.  It is the Private Banking Houses that have been taking the blame.  The fact is, both act in cordination.  So is the Central Bank system setting up the Private Banking Houses to be the scapegoats for the coming economic collapse?  Or will the Central Banks be seen as using policy that lacks logic and have the paradigm of economics change to favor capitalism when the corporate banks are ready to rise?

The paradigm shift could go either way.  The faction of corporatists would likely want to see a world where corporations run everything from the money supply to the White House, and I mean they will overtly.  For example, imagine a Presidential election between Phil Knight and Donald Trump, where Nike and Trump Enterprises sponsor the races.  No more Blue Team and Red Team, just corporations running the governments.  Imagine bing paid in stock, where if you so choose you can cash out the stock for credits to use day to day.  The M.O would be to let the corporations take over the operations of the governments because the governments failed at providing, and also because we need the corporations.  We need Nikes on our feet and oil provided by Exxon in our gas tanks.

On the other side we may see the Federal Government Nationalize the corporations.  JPM would become a Federal Bank in a system still controlled, but even more so, by the Federal Reserve system.  There would still be backdoor politics done by the corporate empires but it would be done even more so than today.  If the current system is shadowy, the following policy would be dark as night.

I think that either of these systems is what has been constantly referred to as the "New World Order" by the power structure.  Yet I don't think even they have known which way the cards would lie.  But as everything seems to be speeding up, I think the lines are being drawn for this New World Order, and I won't be surprised if we now see some events that follow the Libor Scandel that put this NWO in place.

The Libor Scandel is interesting because many sources report that Libor has been fudged for decades.  So why now?  Could this be the Black Swan that takes down the financial system, setting up the New Worder Order of finance and economics?

Thursday, July 12, 2012

The Collapse

You will see the collapse happen.  People you know who you wouldn't think will say to you, "It is happening, isn't it?"  It will be a visable collapse, like watching a tsunami.  We won't wake up one morning and be living in some Mad Max world.  No, it will happen gradually, and you will watch it happen.

It could only take days, maybe weeks, maybe months.  Most will stare, like deers in headlights, as they have throughout this whole shitwshow, and as it gets worse they will watch, like watching a car crash.  Like watching an oncoming train.  They will not move out of the way.  They will watch.

Everything breaks.  Computers, cars, the body, everything.  Nothing is perfect.  With that we know that there will be times that the death of a thing is not noticable.  Yet there are moments at the end of a life where you can see the end ahead.  There will be a time when everyone will see the collapse as it happens.

You and I have been watching it for awhile.  We have taken action.  We have become skilled in certain ways, stocked up on food and water, and accumulated sound money.  We will continue doing this while the economy, built on hopes, dreams, and lies collapses in front of everyone.  Not everyone will be ready.

But there will be room for most.  People will need to watch the children, and so we will have the elfer people do that.  We will need people to work manual labor, the Drs will have a place, security will be important, cooking, and cleaning, and so on.  Society will be very familiar, for most everything will be the same.  We will even need entertainment.

What will change is the banking system and asset prices.  Some prices are currently too high, and some too low.  Prices will find a better equilibrium due to a real supply and demand, not fixed by Central Banks and their proxy banking houses.  This will all be for the better, so it is important that those of us who are prepared now patiently get ready for roles of leaders, however small, when the change comes.

Wednesday, July 4, 2012

July 13th Silver Bomb

The Buy Silver Movement was an idea in the same general time as the wheel.  When man began to understand the way things worked, industry, time, etc, he took these ideas and ran with them.  So now we continue running.  Now we make the move that will keep our wealth with the people.  That is why I am calling to buy silver on July 13th.

It is to put wealth in the pocket of the people who understand what money is.  It is to destabolize the fiat ponzi.  It is to take down those who short the metal naked.  It is for any reason to thwart the financial system that strangles true investment.

Silver demand has never been higher when it comes to the supply levels, and silver is the weak link in the financial system.  Silver, just like gold, is money, yet Central Banks do not use it as collateral.  Bullion banks do, but they short it too.  Industry has created a massive demand for silver, and at a time when above ground supply has been diminished.  Silver trades with oil on a 1:1 basis, so an investment in silver is like an investment in oil, and since oil is the lifeblood of the economy, buying silver can buy a new heart.

All the while fiat currency depreciates to inflation.  This raises all asset prices.  So considering supply/demand and the true metric of money, which assets will benefit the most?  Silver will, especially considering the room for growth.

There is no counter party risk for precious metal.  It is a perfect investment.  This, and if we the people can take control of the money supply then we will no longer rely on the government to tell us what to do.  We will take back our right to develope our society.  We will take back our right to make the laws.

On July 13th we will demonstrate our thoughts and feelings.  We will make concrete action towards a better tomorrow, by understanding today.  Please join me, and buy silver!

Sunday, July 1, 2012

The Defacto Gold Standard

Gold is money.  It is that simple.  Other assets that trade could be considered, at best, currency.  The difference between money and currency is that money must store its value.  This intrinsically.  Nothing but precious metal does this.

Water, oil, and other goods are important assets, and they can trade as currency, but even they lose their intrinsic nature over time.  We can consider these things currency, but how fair of a currency are they?  Water and oil is heavy, and not easily transportable.  Gold can be carried in your pocket.  This is why gold trumps other valuable resources as a currency.

When it comes to trading for goods such as animals then we get into the basic Island Economy.  Just because you take a pig to market does not mean anyone will want it.  Let us run through a simple exercise:  you bring a cow and I bring a pig to a market.  You want a pig but I want a goat.  So now you must trade your cow for a goat.  Let's say you leave and go to another market, and do find a goat to trade your cow for, but by the time you come back to me I have already found a goat for my pig.  This is the time value of money, which is why it is important to find a fair medium of exchange.

Is paper money really more convenient than precious metal?  Why not carry a few silver dimes in your pocket for your meals of the day?  Why not trade silver rounds for cars and gold rounds for houses?  Why rely on banks who loan your wealth out against their practices when you could buy a safe and keep your wealth at home?  If we did then we would probably have a better relationship with our neighborhoods.  Instead of not knowing anyone on the street we would be forced to meet our neighbors and find ways to get to know each other.  This in the same way that if our "living standard" went down we would not watch as much TV, and we would not drive two blocks to get food.  We would be more physically and mentally active.

Paper money has not only stripped us of our wealth but of our sanity as well.  We no longer have a sense of community.  We no longer have a tribal sense to us.  We have no sense of urgency.  We think everything relies on the State - the money, the jobs, the opportunity.  Not only is it a shame we live this way, but it is not true.

The fact is, we are still on a gold standard.  The Federal Reserve issues the dollar, as all Central Banks issue paper currency, and they all hold thousands of tonnes of gold they keep on their balance sheets as reserves to balance their debt liabilities.  Gold backs the debt of the banks, and thus their paper currency.  This is the biggest secret ever, as no one now thinks gold is money.  It is, and the books of the Central Banks prove it.

Friday, June 29, 2012

Gold Certificates

The European Banking Saga has to do with two things that are very interconnected.  Those two things are - 1) The sovereignty of the States and 2) the gold reserves of the States.  These two are connected because the gold is the money supply, and without it, the States would be broke and at the will of any bank that has gold. 

This is not necessarily true.  Money is not needed to achieve given rights and abilities.  There is likely a parallel universe where no one cares about gold and silver and everyone works for the benefit of society.  But here, now, money is important to the people of earth.  We spend 40, maybe 50 hours a week at jobs doing things to create enough wealth to meet our goals.  It may seem silly from afar, but this is what we do.

The wealth that people have is often stored in a cashe.  Most people have chosen to keep their hoard in the form of stock cerificates, bonds, and cash.  People also enjoy having deeds on structured land.  Not many people own gold anymore, but there is one entity that does - the Central Banks.

It is the greatest misnomer in finance and economics right now:  that we are no longer on a gold standard.  The Central Banks of the world use gold as collateral for their loans; the use it to balance their liabilities by spinning it from a reserve to an asset.  Gold very much backs the financial system, thus why it increases in price while fiat is printed.

The gold is held as a certificate at the Central Banks, essentially on loan from their Treasuries, who have the gold held at Forts like the Citedel and Knox.  The custodians have not been audited for decades, by the way.  The certificates may one day leave the hands of the Central Banks, but for now, the Banks act as the owner of the reserves.

Europe's case is similar, as to join the Euro reserves were pledged as collateral.  As the banking crisis worsens, it is my thought that the European Central Bank is asking for more and more gold in exchange for all of these bailouts.  This way they have something to balance their books. 

One must ask, 'Is this crisis purposeful?'  Was this crisis started with intent?  This could be the case.  It may be that The Central Banks, hoping to create a New World Order, have suckered in the States of the world to give up their gold.  If the States give up their gold they have given up their money supply.  If they have done this, the States have ultimately given up their power to govern themselves as sovereigns, because they will become reliant on the Central Banks for all things 'money'.

Wednesday, June 27, 2012

Helicopter Ben

Stories are allegories. The purpose is to paint a picture; to give a narrative; to show someone what happened or what will happen through a lens that can be understood by each person. This is an artful way of making a point. In Ben Bernanke's case, when it comes to the policy he sets, he does just that.

Around a decade ago, Bernanke gave his now infamous "Helicopter Speech" where he alluded to throwing money from helicopters. What everyone has recognized is that he is throu¥wing money. What many have missed is the fact that he said he would do it from helicopters. Why not a plane? Why did he choose a helicopter?

The monied elite have certain codes they use. They think it gives them power. They think it gives them power to tell the world their plans because if the people of the world allow it then the people are not to blame; just as the case of a vampire being asked in, if you hear what their plan is, and you do not challenge it, you have allowed it, and the blame rests on you for being complacent.

The word helicopter was used because Bernanke insinuated that he would keep the economy in a holding pattern while the plans were laid. Like a helicopter, stocks, bonds, and fiat would hover at certain prices, elevated high enough to keep the status quo, but not too low to crash. He would stay in this holding pattern where he would throw his dollars around. This is the code that he gave you, and this is what he is doing.

Bernanke is making his helicopter hover by issuing just enough debt, and although oil and precious metals and some commodities have risen, pensions and other programs have risen too because he has kept stocks up. Bonds are not returning much but because they are going for a premium it is keeping the market liquid. Since fiat is valued against other fiat it is hard to tell that all fiat has been losing value, which is why pricing it in gold is inportant. Yet since most do not price it in gold and price it in Euros or other fiat, the dollar also remains high.

It may seem perplexing that the dollar has kept value through a time of massive debt, but the price (P*) is measured by the supply multiplied by the volacity. The price would fall if both the supply and the volacity were high, but since corporations, such as private and Central Banks have been sitting on cash, the dollars are not moving. This is why the dollars price (P*) has remained elevated, and also how Bernanke is able to remained hovered above the world, spilling more and more cash from above - because the percieved price of the dollar is held constant due to his alchemist powers of creating money and keeping prices high.

Tuesday, June 26, 2012

Here Comes July

Is the whole system going to collapse next month into a pile of burning rubble?  Probably not.  But July  has some very scary problems to deal with, and if there is one thing the politicians can't do it is solve problems.

Europe will have the largest debt roll of the year, and this being a year of massive debt, it is likely their largest ever.  The US is headed for another debt debacle, what pundits are calling the Fiscal Cliff.  On top of these problems the "First World" will dig their hole deeper by flexing on Iran and cutting their oil supply.  All Sovereign Nation-States are broke because they were taken over by Central Banks in the name of the science of economics which dictates to spend fiat cash at the behest of growth.  The growth was always unsustainable because resources are finite and the price rises when supply drops.  The cliff is different from any fiscal cliff, but it is a cliff none the less.

In the face of the turmoil lies precious metal.  Banks hold gold to balance their books.  Silver, which has similar properties to gold, is an industrial juggernaut.  Same with platinum.  These minerals define money, and the banking class understand this.  They will likely be the only asset to benefit from here on out.  This is all why I think there is a big price swing to the upside for PMs in July.  Look for gold to move back to 1800 by the end of the month.  The move will not stop there, and likely continue from here on out, as there are no solutions other than to let that which lies in bank vaults all over the world revalue to stop what indeed would be a massive impolsion of the financial system.

Monday, June 11, 2012

A Long June

I have written a long April, A long May, and now this; there will not be another in the series.  Even if July begins and it looks to me July will not see the break I have anticipated since late March, I will not undo the triliogy.  There are a few reasons why I have written that the break will happen in July.

The first is the European debt roll in July.  I haven't seen the numbers lately, but I know that almost all major European States have to roll an amazing large amount of debt next month.  I think it is almost all of them; there may be one that doesn't. 

The debt roll is the largest ever for the span of one month for Europe.  The next issue is the chart, which is something that guys like Turd Ferguson have been made famous for.  So if you want this guy's opinion (me), then look at the chart, and tell me we are not poised for a breakout in July.

Part of me wants to post charts where I draw lines through them, but another wants you to draw your own lines, while I tell you what I see.  This is what I have done on this blog for over a year, and this is what I will continue to do.  So, look at a chart of gold over the last year.  Look for the inverse head and shoulders formation it has made.  Consider that the left shoulder can run longer (time) and lower (price).  I will remind you we saw, or are in, the shadow, and tell me that we will not see a breakout soon.  July?  August?  Fine - time is hard to figure, but knowing the European debt roll is the largest ever in July, I think next month will be the month that precious metals explode, and that we likely see the largest move in all markets ever.

One more thing, since I am learned when it comes to the occult.  The Bohemians, those that meet in the redwood grove in Northern California during July, have a line from their ceremony "The Cremation of Care" the refer to their place as being, "Safe in their grove".  This could seem mundane, as they are in nature, away from the hustle and bustle of daily life, yet I think there is something else meant.  As I do believe there is a plan from the 'elite', the self named 'Illuminatti', I think that they will be in their sacred place when the shit hits the fan.  I have said that I think there could be another year before the Fiat Ponzi crashes, but as things are speeing up, it could be this July that we see a collapse of finance.

Sunday, June 10, 2012

For a Few Trillion More

"So what?  If rates raise then the deficit will increase $100B....  A few trillion dollars here, a few trillion there, so what?"

The above is two direct quotes combined.  He made the statement after he was asked what happens after rates rise.  This is a great example of economics today.  So what if we owe a few trillion dollars more in the future?  So what if the price of gold goes up.  So what?

This is indicative of  an economist.  In fact I had the same conversation with an economic professor 2 years ago.  I was discussing monetry policy as dictated by her, and by Keynes, and every economic professor who taught at the University.  I said gold would go up if we issued debt at no interest.  She said, "So what?"  I said that gold directly trading in a 1:1 ratio with oil, because oil trades with other resources inverse the dollar.  She said, "So what?" I said that high oil prices decrease GDP and that it would increase the price fo food, further decreasing GDP.  She sat stone cold for one minute and I am not exagerating.  She sat there for one minute.  Finally she said she didn't know how to respond.

So we know that these economists, these Drs. of science, haven't thought it all the way through.  The are not away of the consequences.  This is because there has never been a time when American could not repay its debt.  In 1970 it got close, but because Nixon closed the gold window, the debt could be repaid in fiat.

Yet now it is a different time.  One where GDP is edging closer to 0%.  This will be a turning point, and no amount of fiat can save it.

Saturday, June 2, 2012

The Silver Movement

It began because I had just read The Wizard of Oz and realized the allegories:  The Green Hot air balloon was the dollar, and how the Central Bnks will inflate away their problems; the path of gold was walked on silver slippers.  And that was it.  I realized that the wizards were going to fly away by their fiat greenback, while the people, if they thought to, could walk the yellow brick road in silver slippers and make it home.

That was February of '10 that I began to write 'Buy Silver'.  And the exact reason was that I thought if the system would fail like I thought, then gold may be confiscated, but not silver, and silver defines the term 'money' just as gold, therefore we the people would be best off buying silver.  This is exactly what Gerald Celente has said he is doing as of a few months ago.

Then I began to learn about finance and how the exchanges work.  I was reading Zero Hedge and listening to Max Keiser everyday.  As a silver bull, I already knew that by buying it we could take back the money supply, but then I learned about naked shorts, and shorting in general; then I learned that JPM was naked short silver.  I had already learned about supply and demand as a student at a major university studying economics, and knew how the price action moved.  That was when I came up with the 'Buy Silver - Crash JPM' Movement.

Buying silver puts sound money in the peoples pockets; score one for the people.  Then because JPM and other Major Banking Houses are short silver, and naked, then they would need to come up with the collateral if their shorts were blown out; they would need to deliver the bullion.  So if there was no bullion to deliver, it would put a squeeze on the price like none other.

At the same time, industrial demand is high, and supply may be falling.  Everything is in favor for a squeeze on price.  This is why it is very possible that if we move on the bullion we could squeeze JPM out of their short positions, and thus crash their balance sheet.  Yet it doesn't end there, it only begins.

In November of '10 Keiser decided to use the Buy Silver Movement.  Interviewed on the Alex Jones Show he admitted he had heard about the Movement from Mike Krieger who said it had been started 'On Zero Hedge'.  Keiser may have had his ego put in a boot since then though, as he often refers to it as 'his idea'.  His idea is simplistic though, as the movement never ended with just crashing JPM.  No, it ended with crashing the dollar, and I will now explain the final way that buying silver would end the Fiat Ponzi as we know it.

Everyone knows the dollar is the reserve currency, and that it is also known as the petrodollar as it trades in an inverse relationship with oil (as it trades for oil), which is known as the lifeblood of the economy.  Oil trades at a one to one relationship with silver; the prices move together on a long term chart. Historically the ratio it trades at is 3:1 for an ounce to a barrel.  So now we have established the Aristolian logic that the dollar trades inversely with silver.  Therefore, if the price of silver rises, then the dollar falls.

This fall of the dollar would destabolize the Military Industrial Complex, because the MIC does not have anything that backs it besides the dollar.  It has technolgy, but that technology needs upkeep.  It has personel, but that takes wages.  It needs oil, and the US government does not have enough oil to provide transport and the military it currently has.  It relies on the reserve currency status.

If the dollar failed, it would end the fascist United States government.  And, and at the same time, the people of the world would have put something of value in their pocket:  MONEY.  Silver is money because the definition of money, besides being fungible and a medium of exchange, is that it must maintain its value.  Value as in price can fluctuate, but value in terms of its intrinsic value means it keeps its complexity.  Precious metal has a half life of 500,000 years.  It has the longest half life of anything.  Then we can discusss finite supply, and its technological value, but this does not make it money.  It is money because it keeps its molecular structure.

This crashing of the Banking Houses, and of the dollar and thus the Military Industrial Complex, and putting money in the pocket of the people, is the movement.  Some of this was lost along the way.  It will be important for us, those that understand the movement, to put it back in perspective, so we can have our movement realized, so we can take our money back, and thus take our rights back.

Monday, May 28, 2012

Down Goes Europe!

Europe is and has been in political turmoil for years following their Euro Zone experiment where they combined currency though they still had different ways and means to make money.  Some States rely on tourism, others production; whereas these different systems worked in times of surplus, now that money is stagnant problems have risen.  Led by housing bubbles and unemployment in a socialist system, the Euro Zone appears to be collapsing.

When I think of Europe my first thought is that the US Government is in a similar situation, and the only difference is that Europe is managing multiple societies, whereas America is managing different cultures.  This is a big difference, and it is ill thought that the States of Europe could find harmony in monetary and fiscal policy, but EUrope does have some great advantages to its Western Power counterpart.  First, it is connected by land to the greatest oil producers in the world:  the Mid East and Russia.  This is a great advantage.  Second, it's popluation does not have the reliance on oil that America does due to its infrastructure.  Also it has not the complacency of having the reserve currency; America has been spoiled with such.

Yet their situation is dire:  the banks are undercapitalized, unemployment is high, and they have many promises to pay that are unsustainable; but isn't this just like America?  This conjures up the Sun Tzu quote, "When you are weak appear strong, and when strong appear weak."  Is it that Europe is taking the heat off of America, because when America collapses under its debt burden it will be the end of the Fiat Ponzi, and the Euro Fiasco can prolong the inevitable?  As Europe and America are joined at the hip, I do believe that the reason Europe's problems have been stretched out is to keep the eye off of America.

This is why the problem, reaction, solution has gone into overdrive, with Germany bluffing and bluffing again that they will not pay the next bailout, though they always do.  Same with Greece accepting the bailouts.  There will reach a point of no return; in fact we are past that point, but the result will be just as bad for America as for Europe, and the collapses will be simultanious, as FX swaps will have little meaning when one country collapses.  Will the DXY go up as the Euro goes down?  Will Bernanke cut the value of the dollar by fractionally reserving it to stem the tide, only to increase the price of all assets?  Are there any real solutions?  Considering the debt burden of all Nation-States, and considering they are using fiat to denominate said debt, there is no real solution.  So down goes EUrope, and with it, the Keynesian Experiment.

Thursday, May 24, 2012

The ECB Gold

It took gold to become a member of the Euro Zone, and that gold was held at the member bank, the ECB.  A member of the ECB uses the euro.  Once a State defaults on their debt obligations, they will likely not use the euro any longer, and as likely, not get their gold back.  Therefore, the last State in the ECB gets all of the gold.

This may be the reason for the EuroZone.  It may have been invented to sucker in all the States only to have them default due to, basically, sub prime lending.  It is well known that Greece and other member States should not have been approved for admittence.  This would make sense now that we have outlined that Europe's gold will be owned by the strongest member.

Many have long fought for gold.  Was the EZ set up as a way to steal all of the gold in a legally binding way?  I think so.

Sunday, May 20, 2012

Kicking the Can

Judging by the laissez-faire nature of the Heads of State at the G-8 meeting yesterday, the only plan they have ever had, kicking the can, is going to continue.  It appears Merkle understands that deflation is not in the cards for any of the Central Banks, and that her political posturing has been mere rhetoric to appear to Germans as at least trying not to spend their future on Greece and other insolvent Euro States.  Hollande, a long time French political insider, will change the European course of austerity.  This is their hope of keeping all States inside the Eurozone not before another State, like America or Japan, go bankrupt, which is a suicide pact of epic proportions.  Since the Keynsian policy model is doomed to fail, because debt does not equal growth, and it sure doesn't equal money, well spent or otherwise, there will be failures, but for now, the long term policy of can kicking continues.

Yet there are no alternative choices when it comes to economics.  It is a study deemed a 'science', and there is no aggressive movement to change it, Ron Paul excluded.  And since the media did everything in its power to defame Paul, the status quo has not changed much.  The hope is that it has changed enough, and that when the can kicking can not go any further, those that hold a different theory than printing trillions upon trillions of fiat currency to throw at the banking system will be asked to step down, and new theories will form to create a discussion outside of this Hegelian dialectic that has formed over the last hundred years.

Now that the Heads of State appear to agree to print ad infinum, the Central Banks have the green light to do so.  This should all but put a lid on the dollar's price appreciation, and a floor under equity.  If this does not happen, then pensions turn negative.  Also, since it is not just a battle of the euro vs the dollar (although it may appear that way for everyone watching), and a battle between all Central Banks, oil and precious metals will find great support at these ranges; so great that we may never see them lower.  In fact, if the photo ops from the G-8 are as they appear - a unity of fiscal and economic policy - then we may see oil and precious metals move higher soon, and quickly.

One thing that was mentioned at the G-8 was releasing oil reserves.  This is a manic decision.  The thought is because the Iran Sanctions are about to be fully levied.  The problem is that these reserves will run out, which means the price in the long term will rise.  Last time it took only a few weeks for the price to rise back up.  Is flushing the holdings of our most important resource worth a few weeks of cheap oil?  Not at all, but these policy heads are just that stupid to try.

Thursday, May 10, 2012

Economics Hangs in the Balance

If JPM does indeed get their balance sheet blown out, and the recovery never truely takes hold, it will put pressure on the "science" of economics because it will show that the policy that was used was not sound.  If it was not sound, then economics is not a science.  If economics is not a science, then the whole structure of finance will need to be reorginized.  This will cause great instability, and societies around the world will have to change to fit into the picture of a new economic landscape where true economics reigns supreme.  The difference between current policy and sound policy has many variables, some of which are - How do we determine value?  And what characteristics embody the consumers?

Economic policy dictates that when times are good it is prudent to save, and when times are bad then wealth must be created and spent.  The problem with this is that the consumer is not rational (despite the science's theory) and the consumer often spends most during good times, leaving their wallets empty when a depression arrives.

The next factor is that even if the consumer were rational, the crux of the system is based on an instrument of finance that holds no intrinsic value.  This instrument is the dollar, and it can be printed and loaned out from a promise to pay into an infinite amount.  Since the entire system uses this tool to implement value, value is actually lost before it is ever understood.  This creates a great amount of chaos and if, or rather, when, people come to terms that using fiat currency to trade is different from using it to store value, then real wealth will be demanded with sudden force.  If someone wants to use paper money that is backed with another item that is one thing, but when one hoardes it as if it has value, it is merely done with poor understanding of the thought investment.

And with these fundamental problems also comes the fact that those in charge of making finance work are crooks and inept at making investments proper.  The Central Banks can not really bail them out, because the Central Banks do not create wealth themselves, but just percieved wealth in the form of fiat currency (nevermind the Central Banks are crooks themselves, because they knowingly create and pop bubbles).  There will soon be a moment when actual goods can not trade for fiat currency; this will be when supply is constrained and demand moves higher.  Because the Major Banking Houses continue to falter, we may be fast approaching this moment when the Fiat Ponzi collapses.

The Fall of JPM

Oops.  JPM's prop desk has a realized reported $2B loss.  Oops.  They will now need to shore up their book and remain a buyer of UST debt at the same time, or else they will no longer be able to get the cash swap from the Fed to buy Europan debt.

First they will need to liquidate assets.  How will they do this?  Will they loan dollars?  Sell equity?  Bonds?  Their position is surely leveraged too, and by some estamates the hole will be $20B.

So on the Fiat Ponzi crumbles, and given not only the size of JPM, but the institutional role it plays to mind the gaps, this could trigger the event that will usher out the Fiat Ponzi system.  Anyway it goes; it could be a sharp sell off in equity, and bond bubble collapse due to a lack of demand, or a collapse of fiat due to an increase in leverage to maintain price stability; anything is possible, and because we have never had a stable system, and the backbone is based on a metric (the dollar) which has no real value, I would say that whatever happens is going to be something that most people have never dreamed of.

Today, it has begun.

Wednesday, May 2, 2012

Mining Stocks

The drop in price of precious metal mining shares has been one of the most interesting happenings in the markets over the last few years.  Not only has precious metal bullion found a comfortable support level, but these miners are providing an important resource for industry, if it is financial by gold or silver by technology.  So how has price dropped so?

I have no answer, but I can stipulate; dropping the price of miners can cause a panic that could lead to a mitigation in the price of bullion due to investor sentiment but also by forcing them to sell more product than wanted to keep their balance sheets even.  Yet it could also create oppurtunity for those miners who manage their positions, because if they can find support, buyers could come in and invest, and they could also hold back product and cause a supply crunch.

Who is shorting?  It is likely that it is institutional investors.  Looking at stocks, the PM miners and financials are down in lockstep.  It is likely that the proxie Banking Houses are doing the bidding and bleeding their books to mitigate the prices of the gold sector, because if miners stay down sentiment may be kept from buying bullion, and vice versa.

It has been a hard year for miners, but those that managed themselves best should see great upside if bullion prices start to rise soon.  The move up in bullion could not only move the mining sector dramatically, but could lead to even more bullion investing.  If one moves, the other should respond.  The two investments, bullion and shares, could build on each other to create the next leg up for the gold sector.

Friday, April 27, 2012

The Shadow

Gold and silver have formed a perfect inverse head and shoulders.  There is only one  move left to complete the move, and that is the shadow, meaning the last down move.  This move happens because there is downside pressure built, and the bears want one last raid.  After this, when support holds, it proves the support level, and forces the pressure off.  Then the rise starts.  We are moments away from this now.

US GDP missed today but the market was up.  What gives?  Well, the policy makers don't want the US data blamed for sinking stocks, so next week look for weakness in Europe to be blamed for a falling euro, rising dollar, and down stocks.  At the same time gold bears will be yelling at the top of their lungs that gold is not a safe trade while it's price falls.  Same ol' same ol'.

I see gold and silver breaking down next week.  I see gold touching $1610 and silver flirting with $28.  This will move the dollar up slightly, and the DXY should touch 81.  Stocks will slide, and I see DJ touching 12,800.  The down move in precious metals should last about one week.

Support should hold at the above levels for many reasons:  First and foremost fiat is the weakest link because there is so much of it in supply plus the demand is not strong when real inflation is high and investors demand growth or yield and thus will not breakout; this gives all assets a cushion, especially real goods like PMs.  Second, there is massive support for PMs at these prices.  Not only will buyers like me go and move my savings from cash to silver, but there will be institutional buyers doing it as well.  Third, supply is decreasing.  Industry demands silver, miners are producing less than in the past, and there is not much currently above ground.  Finally, the actual price of precious metal is much lower than it should be due to naked short positions by JPM and others, and JPM will be forced to lift these positions due to the above reasons, and they never like to get blown out.

I do not use this blog as a political platform because I assume if you are reading this you know who I am and what I think, but I will say this:  Now will be a great time to buy, and removing every once from the market will put pressure on JPM to stop shorting silver.  So not only will we benefit from the purchase, we will continue to destabolize the Fiat Ponzi system.  I had not bought silver since Christmas and I have built a cash position, but I bought this week, and I am looking at buying for the next 3-6 weeks.  If the price goes to $28, I will go all in.  If it doesn't I will dollar cost average until early June.  Either way, the technicals and fundamentals say this is a great time to buy, and may be the last time to buy at these price levels ever.

Wednesday, April 25, 2012

My Coin Dealer

Today I visited my local coin dealer.  He is Russian and grew up in Russia while it was communist, and has family who buried gold while waiting for the system to collapse.  Funny thing, his grandfather who buried the gold died before the collapse and didn't tell anyone where he buried it, so his family has dug up their backyard but still have not found it.  His time frame for the collapse of the economy is that it will happen in 2015, because, "That is how long it took Russia".  It may not be perfect logic, but if history is any indicator....

He also likes to chart.  An interesting fact about him is that he closed his MF Global account days before its bankrupcy.  I know because I was at his shop the day before MF declared, and he told me he had already closed his account and had the funds wired.  He is very savvy, and my conversations with him are very interesting.  I am going to brief today's.

We went over charts, and he and I both agree gold and silver are forming inverse head and shoulder formations.  He thinks that the shadow, the final down move of the shoulder before the upmove, will touch $27.  I think it will be about $28, but potato potato.  Gold he sees moving below $1600 on the final break, and I think it will be a hair above.  Once again, very similar support.  You know what I think as far as the next few months, so let me write what he told me.  He says that once gold and silver finish their formations, the break will be quick to the upside.  His thesis is that silver will break $33 with ease and will not stop until about $37-$38.  This is interesting because I broke May and June into this one move, so he is more bullish than I.

Long term he thinks silver will get to $42 before the election and will get to $48 in nine months.  He thinks gold will be at $1850 before the election and by February it will be around $2000.  I am more bullish long term, where I see gold at $2200 and silver at $49 before the election.  I think that the next couple months will be mitigated, and that long term there are so many problems that any slight up move in gold and silver will set a fire and the move will build on itself over time.

The most interesting part of the coversation was about the Comex.  He says that if silver goes lower than $22, then there will be so many buyers in size that the Comex will default.  He made a point to say they have only 30 million ounces many times throughout the conversation.  He also said that the Comex could default at higher prices if anyone decided to move in.  But he also noted that Comex likes to pay people in cash when they ask for delivery.  He said this will continue.  He also mentioned that Chavez had only received his first delivery from JPM, and still awaits the rest of the shipments.

Finally, the most notable thing I took away was that production had peaked already.  He said it peaked years ago, around 2009.  I have long said that silver's price, and in fact the whole economic system, is waiting for silver to peak production.  I guess that may have happened already, so as for now, paper, which as he pointed out is leveraged 100:1, is doing a great job suppressing the price.

Also to note, he does not like platinum, and he did not have much to say about it.  What he said was it has never been considered money, so if people do move into silver and gold because of their history as money, platinum will be ignored.  He said that platinum is merely industrial.  I do not fully agree with his prediction, although his take on its history is accurate.  Platinum was shaved off and thrown away in the same way natural gas was torched when crude was produced, only until recently.  But platinum meets the definition of money in my book, so I think it will move with its sisters gold and silver price wise.

Monday, April 23, 2012

Only $430 Billion?

In a world where a group of Nation-States combine bailouts and only come up with $430 billion, there is a risk that the can kicking is nearing an endpoint.  From a $800b TARP, a $800b STIMULUS, massive QE's and LTRO's (especially considering asset prices have nearly doubled since the Fall of '08), a $430b package is quite unimpressive, so what is the motive for even acting like this amount will mitagate the flow of funds and flow of credit risk?

It is either that the Central Banks think that the crisis is over, and they are merely shoring up their ship, or that the boat has hit an iceberg, and the $430b will give them enough time to make it to a life raft while the rest of the ship's crew listen to the band play.  I think it is the latter, because with days like today, where Europe equity is down 3% across the board, and where Asia and the US markets fell, there is no way people can believe all is well.  Afterall, Bernanke and Hu have both said the recovery is weak at best.

What will the $430b do?  Well, judging from recent history, it can give the system pause for a month, maybe two.  What then?  More bailouts will be needed, likely from the Fed, since most other CBs have done their fair share of late.  This will lead to more inflation of the asset prices for necessary goods like foodstuffs, oil and metals (especially PMs, because the CBs will continue to leverage them).The housing market will provide a cushion for hyperinflation, as houses continue to deflate.  But after this $430b the system will need a large cannon if the can should continue to be kicked, an amount of $1T due to Europe's coming massive July debtroll; this should be in late June, early July, and do not be surprised if it sets fiat on fire.

A Long May

I had an article in the start of this month titled, "A Long April" in respect to precious metal prices not surging even though the world's Central Banks continue to keep rates low, and currencie flying out of the presses.  One thing about watching trends is that it is important to readjust one's views as to where the trend is going in the future.  Since that is the case, I am going to readjust my projections for May and June, and I am going to really slow the roll of precious metals, until a big move up, which I now see happening in July.

In "A Long April" I thought gold would get to $1735 by the end of the month and silver would be at $35.  Not only do I not think these two will get there in May, it will take June to reach these numbers.  May should finish at $1680, and silver at $33.  I think this because I see stocks having a bad May, and I don't think there will be much investment made into anything; I think all markets will stay in somewhet of a holding pattern as I think that trading is pretty much dead.  I don't think people will move to cash in this environment, as people want something for their investment, but I do think stocks will move down (DJ to 12,225), so maybe cash drips into bonds.

During May, I think JPM et al will continue to suppress the metals.  The PTB have a fresh $430B thanks to LaGarde to maintain "stability", yet this really isn't much,and should only kick the can about two months.  It appears that suppressing PMs is one of the most important things for the PTB.  Maybe because they want to shake out the weak hands so they can accumulate as much as possible.  Maybe there are other reasons.  Who knows what is in the minds of these mad men.

As for July, I think we break this range we have been trapped in for nearly a year, but we will have to see when we get there.  I still see all CBs printing, but even if they don't gold is the best hedge, for if rates rise, what will be the best investment?  Not bonds; why hold cash?  Stocks?  Gold is going to continue to be the best investment for the foreseeable future, as it has for the last decade.

Saturday, April 14, 2012

The Fed's Loans

This week was a very telling week, literally.  Bernanke gave two press conferences where he discussed the Federal Reserve's ability to make loans.  The first time he mentioned it he cited a rule in the Fed Charter, 13-3 I think I heard, that allows the Fed to make loans to sovereign states without Congressional approval, even considering the new regulations of the Dodd-Frank Act and the Volker Rule.  The other speech he made various points that if there is any more systemic risk, the Fed can make loans to mitigate the problems.  This is telling because we know they Fed makes loans to States such as Libya and corporations such as Caterpillar, but from what he said this week we should expect more of it.

What does the Fed loan?  They make currencie swaps, and this loan gives them a 1:1 loan with interest.  This cash is loaned from their reserves, but cash is not the only reserves the Fed has.  In congressional testimony a month ago Bernanke was asked if he owns gold.  After acting like he did not know we remarked that he did have gold, on reserve, in the form of "gold certificates", on loan from the Treasurie.  This gold is loaned, and will be loaned.  When it is loaned the currencie that comes from the loan can be fractionally reserved, and the loan is magnified.  This and gold not only maintains value, its price apreciates compared to fiat (which is depreciating ad infenum due to inflation).  This is why gold is still the crux of the financial system:  it is the loan of first recourse, it is the proprietray trade for banks, central and private, because it has a maximum leverage.

Demand is high for these loans, too, as other Central Banks want to and are trying to  hedge and diversify from dollars.  The loan makes sense for the PBoC and other CBs because they buy the loan at $1650 (if the loan was made today) and the hope is that when the loan comes due the price is higher, and the PBoC will get paid that amount.  This interestingly makes gold manipulation very profitable of the Fed's side.

If the Fed has a large amount of gold loans coming due, they can orchestrate bearish news on the economy, and have their proxie banking houses (JPM et al) flush the precious metal complex at the same time, making the Fed have to pay the loanee a lower amount than the loan was made for.  Add on a premium and interest, and the Fed's gold loans can turn a hefty profit.

Wednesday, April 11, 2012

Gold's Ominous Move

Yesterday was a special day.  Yesterday we once again saw a glimpse into the inside of the financial system, where current economic policy is dying a slow death, where people such as Ben Bernanke catch their books on fire after dragging them through the gates of Hell.

In the midst if this recent downturn we once again see a flat dollar - the dollar, the reserve currencie, the end all liquidity crutch of the Fiat Ponzi - we saw the continuation of a bond market propped up by the Fed buying Treasurie debt from Private Dealers (in the form of another multi billion dollar auction), and we saw stocks lose their luster around the world.  Yet the kicker was that gold's price shut up like water from a whale's spout in the middle of it all, just as it did right before the US had its debt downgraded last summer.  Right before a grand equity collapse; gold seems strong once again.

If gold relishes in these moments, what is the true safe haven play?  What does really store wealth?  These questions are easily answered when considering golds half life of hundreds of thousands of years, as well as its price action during recent times of financial turmoil, as well as during the last decade in general, due to supply constraints.

Gold is the safe haven for cash to move now, and it stands along side only the other precious metals silver and platinum.  This because these three items define the term monie, and it is money that is needed in this time of economic uncertainty.

Monday, April 9, 2012

Production and Demand

The Trinity complex (PMs) move together in the long run, yet in the short term they don't move in lockstep.  Recent trends have shown platinum to be the more bullish of the three.  I do think platinum will be above $2000 next year, as it has a beta more similar to silver's, higher than gold, yet is more rare than silver and already past its peak of production (it peaked in 2009).

Silver has yet to peak its production, and it could be a few years until it does so, but from what we have seen from past production peaks, the peak happens suddenly and swiftly.  Once silver does peak its production, it will be the the last of the PM complex to do so, also joining oil and steel.  Silver's production peak is very important, for then no PM will come cheaply.

Supply is a very important piece of finance, especially as demand increases.  A rise in demand, which there is for PM not only to store wealth but also industrially, will increase price.  If supply can rise with demand, then price keeps equilibrium, but if supply stays flat or decreases, then the equilibrium moves to find a rise in price.

Since PM, other metals, and oil have seen a rise in price due to the value of fiat alone, their demand has increased, and this has led to supply being mitigated.  Now with oil higher in price, drillers are going after oil that is not just low hanging fruit, and this is the same for everything.  The supply increase will only last so long, and it will increase the sharpness of the downturn.  So when the downturn does happen, it will happen quickly and sharply.

Wednesday, April 4, 2012

A Long April

I have been writing that precious metals will have a long April.  Well, it has started that way.  First, I will give new end of the month targets:  Gold at $1735 and silver at $35.  Those are big moves percentage wise, but the volatility has been and will be big both ways.

The volatility makes the upside more bullish, because it shows the desperation of the "M"oney "M"asters and also their desperation shows the important role PMs play in the system, but the move will not happen all at once.  It will be a volatile month with big upside and downside moves.  We have seen the moves start.  The reason there will be a cap on price appreciation is because Europe is under pressure.  Monetary policy does not have the affect it once did, and the Trinity will be suppressed at all costs so the secret is not know to the world until the Fiat Ponzi crumbles.  The secret is that precious metal is monie, and nothing else is.

The Fed will let markets pull back to scare people into accepting more debt, if that debt is outright QE, or debt swaps and FX swaps.  I think the market will drop to DJ 12650 by late April, and Bernanke will usher the next round in then.  By that time, Europe will give up all its recent gains and the world economy will be in jeopardy of falling into depression again, like it had ever been saved.

I think PMs take off this summer due to the continuation of lax monetary policy, but I think this will be a long month.  Big moves usually have opposing big moves ahead of them.  This happens so the market can get the best price available.  When I write the "market" I mean "m"arket "m"akers, because there is no market, and hasn't been one in a long time.

Tuesday, April 3, 2012

March Fed Minutes

The Fed minutes from the last meeting were released today, and there was little surprise in the text.  However the market "reacted", or that is what people are led to believe.  The market was sold off, but was the minutes release only a front for the selloff?  And what are the implications?

First, technically there is usually a break before a large move.  Precious metals were moving up, the dollar was moving down, but the trends reversed dramatically.  Does this mean that there will be a trend reversal, or is this a break that is a last move before the recent trend continues?

As PMs have been in a ten year upward trend, and the dollar has been losing to inflation for its whole existence, I do not see a trend reversal.  The breakdown today allows the market to use this break and reinvest.  What I mean is, right now, the dollar can be used to buy precious metals.  And this is what will be done sooner than later.

The readjustment will be slow.  I think PMs will experience a long April.  I do see the PM complex moving up, gold finishing the month off at $1750 and silver at $36.

In conclusion, the market did not react to the Fed minutes the way people think.  The minutes were not news; everyone knew that the minutes did not implement another new QE.  What happened was that all trends are in line, nothing happened, but the market players wanted to refresh their positions.

Wednesday, March 28, 2012

The Next QE

Bernanke can decrease the value of the dollar by manipulating the "money" supply (I like to think he controls the "currency" supply, as fiat is not money).  The value of the dollar is figured by this equation:  mv=pq (the amount of money in circulation x the velocity of the money = the price level associated with transactions x an index of the real value of final expenditures).  This is simply explained as a way for Bernanke to raise or lower the value of the dollar.  Let's examine why he would do so.

The main reason to lower the value of the dollar is to increase exports.  When export prices are lowered it increases productivity.  If productivity is increased, then profitability is too.  I will point out that the chief export of the US is debt here, and also that NAFTA and GATA have done away with industry in America.  So Bernanke is exporting debt, and basically, debt alone.

If this sounds crazy, well, this is Keynesian economics.  You can read it in University textbooks written by Bernanke for upper-class economic undergraduates.  You can hear Bernanke discuss it in his speeches.  These are the facts.

America, and the world with it considering America has been the leading economy for decades and decades, is at a tipping point.  I won't list what is wrong economically here to save space, and I already think you know all the talking points (besides, I am sure I will touch on them later in this blog, if I haven't already), but there are many many topics to discuss.  Finance has gone berzerker, and raised the stock indices high.  Bonds remain high, yet the basket of currency that defines these prices has maintained some stability (compared to what the future holds), all while debt and more debt piles high on the backs of the Nation-States, and municipalities across the globe.  A major break in the economy is coming, this much is obvious.

When?  No one can guess.  Yet we can guess as to what solutions will be offered up to appease the Fiat Ponzi.  The question is not only when, but how?  Will the QE be sterilized or unsterilized?  Will Congress be involved?  How much currency will need to be printed by all Central Banks?

These have often been discussed, yet there is one solution that can be offered by Keynesianism that is not often discussed:  the value of fiat can literally be cut in half.  It has been done before, by FDR as his first Presidential mandate.  He did this by revaluing gold compared to the dollar.  It happened over the course of a week.  As history repeats, we can guess this will happen again.

And happen again it has, albeit slowly.  The question now is, will it ever be done suddenly?  It would be shocking at this point, as Obama and his minions have declared a recovery.  Would it be a False Flag?  A war?  The student debt bubble?  What could create such a policy move?  My guess is as good as yours, but it is a possibility, and day by day, it becomes a greater one.  So when will it happen?

One thing I try to make sure I understand is the modus operandi of the minions involved in the Global Cabal.  Bernanke gets a lot of just deserved heat from me, but he is just a minion in the large scheme of things.  In an interview last night, he said he may not continue as Chairman under a different POTUS.  If this is true, he may now kick the economic can until the election to see what happens.  If this is true, then he will only do what he needs to to prop up the system.  He will not want to use the bazooka that would be cutting the value of the dollar in half if it will be painted as poor policy.  So he may sterilize his policy for the rest of his tenure.

One last thought, what if he had a blood pact to cut the value of the dollar, and now he reneges?  Well, it may be off with his head.  Obama is in a similar predicament with his policy, thus why I think we are at a turning point.  This turning point though may not end with policy moves, but with people being moved from their posts.  Bernanke may retire sooner than expected if he does not follow orders from the oilgarchs, and the same is with all of the minions of the New World Order.

Monday, March 26, 2012

Operation Bernanke

Bernanke was on the news flapping his beard today that his laser guided policy tools are still sharp.  He has done his best to confuse the rational consumer until now, and he will continue until the end of the Fiat Ponzi.

His credibility lies in the fact that for hundreds of years people have believed anything out of major Universities.  Education can provide a mind with fuel for fire, but it can also subvert thinking.  Economics, which is taught as a science due to its use of math, is a study that is more a theory, but Bernanke has those who are learned at his disposal and makes the believing suspend their curiosity.  He has done this because America has had it easy for so long.

How could America's economy collapse?  The Fed has done a job for one hundred years, and it hasn't collapsed yet, so how could it?  Well, logical fallacies aside, it is being set up to fail, so that those in power can take the crumbs and make a cake.

So Bernanke will continue QE, as will all CBs, and on the system goes...until it doesn't. 

Friday, March 16, 2012

The Bohemians

As we approach Spring, I can not but think forward to the summer; a time to relax and reap the benefits of a hard labour.  Summer is such because nature lets us have it easy; we can't help but to bask in the limelight.  So it is for all of nature.

Don't think the Illuminati won't recognize this.  In terms of psychology, they are masters at understanding basic behavior.  Yes, there are those of us who bend the trend, but even we fall into a group set, and all are easily manipulated in some way.  The sun, the skin, the bounty - it is a part of the warmth that bestows its generosity come high time.  So it is.

Many moons ago a group of artists, calling themselves Bohemians after the renaissance of Bohemia awhile before, gathered in the redwoods of Northern California.  They were artisans - painters, writers, actors, and all.  They spend every summer from the turn of the 20th century on for a decade in those woods enjoying the great forest.  But somewhere along, they asked for funding for their exploration; they wanted more - cabins, stages, etc.  The funders, monied men from San Fransisco, came and enjoyed themselves.  How could you not; the artists available featured  such people as Jack London.  It was a creme de la creme of finance and art.

Yet this is when the camp was bastardized.  How could it not be?  The monied men began to bring their friends, promising more monie along the way, and some of the artists became their toys.  Some left the camp never to return, one of whom was London.  But in the end, the monied men took over the camp, and the rest is history.

Now these men, who still call themselves Bohemians, bask in the moonlight, worshipping nature in a way only they know.  They pray to owls not in love, but by knowledge of power.  Power in how the planets, and all of nature, move.  So this summer, while they are in their encampment, after Davos and Bilderburg, they will be, as they say, quote, "Safe in Bohemia".  Think about that now, and keep in mind that oil is running up highs in the midst of  the Greatest Depression.