Monday, April 1, 2013


We know the Fed is purchasing toxic debt from the Major Banking Houses but we don't know what these banking houses are doing with the cash.  Not exactly, anyway.  They are probably doing lots of creative things with it, such as bathing in it, spending it on hookers and blow, and building paper houses.  Financially they are creating operational desks outside of their main paramet6ers so to trade without the scary eyes of the Frank-Dodd and Volcker rules watching them - Goldman Sachs announced an LLC today that does just that.  Now what exactly are they investing in?

Everything and everything.  They have OTC investments and derivative investments in dark pools.  They are buying CDSs and leveraging banking deposits.  They are toying with everything imaginable, all with cash they recieced from the Federal Reserve Bank, a private for profit bank that is under charter from the UST to "maintain the stability of the financial markets".  The markets have the appearance of being stable, so say the MSM, but is that the case?

The way the markets are being held up is by massive positions on both sides of the shorts and longs.  Imagine the Great Wall of China, but instead of its actual size, imagine it being wider than it is long.  That is what the money changers have done - they have put a massive amount of cash on both the longs and shorts to hold a price in place.

This is not only excessive but dangerous, and the slightest imbalance could bring any one option down.  It is likely that it could be the dollar, since that is the largest market.  Or it could be the UST market, as it is the biggest bond market.  It could even be a small market such as silver, since not only does silver correlate directly with oil and thus the dollar but the amount of silver traded everyday equals the total mining done in a whole year.

So the markets are highly unstable and only kept a float by massive amounts of cash long and short.  The game will end when an investment, like silver, shows that it can not be papered over.  I think silver is the best case to do this because there is such strong demand industrially and for personal invesment for the phyiscial bullion.  Other front runners include oil.  When one of these investments shows the paper price does not equal the real price based on supply/demand, the house of paper will fall and leave the whole system looking like a naked emporer.

Monday, March 18, 2013

Bank Runs Cometh

This week will be looked back by history as one that stood still; while the establishment licked its chops at stealing savings deposits outright - without the guise of a trading error such as MF Global/JPM - Americans lauded it would never happen here.  Anyone in their right mind has now begun to pull ALL of their savings from their bank and diversified at least half of their savings into precious metal.  Of course, Americans are not in their right minds, and presumably neither are most Europeans.

One question that comes to mind is:  What were the Global Bankers thinking trying to blatantly steal around $8B from depositors in Cyprus?  In the aggregate this is chump change and I would have a hard time believing that this would go unnoticed by even a small percentage of the Western populations.  That is why I think more than trying to rattle Russian Oilgarchs, or steal a small amount of money, this move was put forth so people would do exactly what is rational - this was done to cause bank runs.

The bet is that people in Greece, Spain, Italy, and other States on the brink of absolute economic disaster will run their cash out of the banks and cause bank failures across the continent.  The reason is the establishment wants to blame those people and institute a cashless society so that bank runs can not happen.  Then, when enough fiat has been takne out to leave the bank loans unfunded, the value of the fiat will go "poof" and everyone will need the government/banks to create a new system.  This one will be cashless, so the people, who will be painted as "foolish" for crashing the banking system, will not crash the system again.

The only solution is for people to exchange the fiat for real money - precious metal - so that when the banks collapse and the currency loses value there will be enough people who can trade without the banks dictating the credit system.

I think it will be slow to start, but by the end of the Spring there will be enough whispers about bank failures and depositor "taxes" that a great amount of cash will be held outside of banks.  Once again, the reaction by the establishment will be a cashless society; John Pierpont Morgan created the Federal Reserve to solve the problem of a bank run in the 20th Century and now a cashless society will solve today's bank run.  This has been the plan all along, and now we have seen how it will be implemented and who will be blamed.

Thursday, March 7, 2013

Are We Wrong?

It is an important question for us to ask:  Are we currently wrong about the direction of the economy and finance?  We must ask ourselves this question so we can learn if we, those who have chastised the fiat ponzi of finance and the psuedo-science of economics, can figure out if we are right and if so how right we are.

Let's start off the the precious metals sector:  This is a sector of investment that has been relegated to such catigorizations as - for doom and gloomers and a fear trade, speculation (whatever the hell that means but probably as a reference from the media about day traders), and other such things like "stupid", for it just sits there and has no growth potential like a company, and it does not pay a dividend.

These are of course the tactics of the banking owned and operated media to give the exact opposite take on the metals themselves.  First, they are productive, as precious metals are the underlying fundamental technology behind all technology.  There is no computer without PM used as a conductor, there are no solar panels without silver, there are no catalytic converters without platinum; there are no bombs for the military - even thought we could do without that, the US run world economy couldn't.

Second, the fact that it does not grow as a company means it also does not shrink like one - not having counter party risk may be the most important reason for owning PM; not having dividends paid out is fine when you are not worried about your investment going under.

Is it the fear trade?  Why not the smart trade?  Why don't people think it is smart to own what was used for thousands of years as money?

Who cares what the traders do in the pits?  Most of what they do is upon command from the very banks that have crashed the economy over and over and over and over and over again.

Stocks are at all time nominal highs priced by the dollar, King of all Fiat.  Bonds are priced at all time highs, pegged by all Central Banks buying them en masse.  Does this mean anything to me?  The wealth created by the rise of nomianly priced equity has been equal to the inflation of the denominated currency.  Bonds are artificially high, and if there is one word that comes to mind when something is priced high it is "bubble" - and bonds make up the greater of finance when compared to equity:  If bonds collapse all hell breaks lose.  People will want to go to cash but inflation will steal a consistent return from their pocket.  People may want to go to stock but pick a stock, I dare you; tell me which company will do well in such an environment.

That leaves us with commodities, but how will you invest in them?  The futures market?  How do we know that futures are trading accurately?  Trust the CME?  Sure, that sounds smart.  If we ever wanted to take delivery we would lug around a barrel of oil?  Ten thousand barrels of oil?  Sounds crazy.  Trading futures is especially mad if the dollar and other fiat continues to break down, because those currencies are how you will take payment.

I have been saying for years equity would rise.  I wrote an article years ago how we would skip through DJ 13k (I was way ahead of course) but I stuck by it.  Now I am wondering how much higher we can go; specifically, can equity go higher without a significant breakout in gold?  Without a significant breakdown in FX?  Without a significant breakdown in bonds?  Or all of the above.

We are at an inflection point, and how interesting that my last call at LH's Market Watch on PM was for gold and silver to break out in April and May (read the last article).  Get ready boys and girls....the mountain is about to turn into a volcano. 

Monday, February 18, 2013

What If?

I know one of the questions everyone has is, 'What if the central planners had never stepped in with easy monetary policy?  What if we had never had any of the QE programs by the Fed and Treasury?'  I want to try to address these questions and also give me guess at to what prices would have looked like.

The first thing we hear is that if these programs had never been created and implemented then the 'recession' would have been much worse, but considering that it has been a depression (given real UE and real GDP numbers), is it true?

We need to start a long time ago however.  So long ago that we really can't guess what the price action would be now.  If we start with the fact that the bank runs in the beginning of the 20th Century were manifested by John Pierpont Morgan, that the First World War was created by European Aristocrats, and the Great Depression was instituted by Wall Street, then we can see where this is all headed.  We can't accurately find P* (price) becuase it has been so distorted over the years.

Yet let's continue the historics so we can see how much manipulation has occurred.  After the Great Depression FDR devalued the dollar in terms of gold (I am also going to stay away from social programs), then WWII started - another war that was created by the financial system.  Then the Military Industrial Complex got in full swing and has had war after war since, costing tax payers trillions of dollars for slightly better technology at the expense of a lot of bloodshed.

The 70's saw the MIC lose a big war with the Fall of Saigon, and before that the US was already going bankrupt and had to pull back the gold standard from the international market.  Then we get into the coked up Wall Street of the 80's and all of the shady deals that happened then, ending with the collapse in '87.  The 90's had the LTCM scandal, NAFTA (which shifted industry across the ocean), the end of Glass-Steagall, and the dot-com bubble (and many small wars).  Then we get false pretenses for wars after 9/11, a housing bubble, and another stock market collapse.  So really, more lies and scandal by the Fed and UST were just the norm come '08.

It will be impossible to discover accurate P* (price) given all of their previous losses.  Price discovery uses standards and metrics that monetary policy has blasted into sand over the century.  If we had not had all of that lying and cheating then maybe an ounce of gold would be worth what it was in 1912 and we would still be purchasing dinner with our metal change.  But the fact is our currency's purchasing power has been inflated away and we now spend $100/month on internet.  We spend $5 for a beer.  We spend $5 for a gallon of gas.

So what if there had been a collapse of finance in '08 - however orchestrated by ineptitude and malfeasance - and proper measures had been made?  First let's assume control right at the top of the market:  I am not sure but I would assume that the banksters shorted the markets on the way down, even the PPT and other government working groups (they are concerned with only making money anyway).  So if we had it proper, we would have let the big banks go out, and other banks that were not in trouble could have bought their holdings on the cheap.  It is possible that community groups could have bought mortgages cheaply and people who had never been entraupanuers who had savings  became the new banking industry.

Yes prices would have fallen, but we see now that there is a 1:1 ratio on goods to services.  So houses would have been cheaper, but oil would have been too.  Therefore the pensions would have been lower but we would be buying the same amount of goods.  The only reason higher prices are wanted is because corporations wanted their stock prices higher.  The average person on the street would have been better off.

Unemployment is a hard one to figure out.  A lot of work had already been outsourced.  Maybe there would have been a return to community though.  Maybe those corporations that needed high equity prices would have gone under and local companies would have hired those out of work.  Basically all we did was keep the crappy system together at the benefit of the rich.  DJ 5000, oil at $50/b, gold at $1k, it doesn't sound bad to me.

Thursday, February 14, 2013

Recent Technicals and Future Prognostications

I was asked how I feel about platinum right now and I decided to write a post on the technical behavior of precious metals, and touch on platinum too.

To start, gold and silver have been money for thousands of years, yet platinum has not always been seen that way.  Platinum was shaved off of silver like natural gas was flared from oil wells.  It has only been recently that platinum has been used in bullion coins.

I've always been very bullish on platinum because it is in such short supply.  The interesting thing about platinum is that it is not talked about as a monetary investment in broad terms.  So if there ever is a turn in investment and people move cash towards platinum it could be wildly bullish.

I looked at some short term charts today:  gold looks under bought, silver looks like it is in the middle of its recent range, and platinum looks over bought.  My coin dealer says silver and gold should follow platinum higher.

I think, looking at just the charts, silver could consolidate until May (although trading is becoming very volatile, signaling a coming breakout), gold looks like it should break out in April.  Platinum looks like it has already broken out.  I like to think of the complex as trading together but they don't move in tandem.  Look at how silver broke out in the spring of '11 and gold followed in the end of the summer.  Platinum spiked before the Fall of '08 much more than the others.

Looking ahead I will put it this way -  I think silver will trade 15:1 vs gold, I think that platinum will likely have a greater premium in the future due to its small supply, and I see gold moving to about $10k to $20k once rates top out.  I see rates having to get to 15% to kill the inflation that is and will be in the market.  This is a long term outlook mind you.

I think that the next leg for precious metals will rise a little faster than the second leg up.  I think gold will get between $4k to $5k during that time.  I think the Central Banks can print to buy bonds for about another year or so.  There will be a turning point where there is massive inflation in the system.  When it is undeniable rates will have to rise.

Then once rates rise I think gold will go parabolic.  This is when we see $10k to $20k.  I also think that the DJ will be 1:1 with gold during that time, and I think fiat currency will be burned into ash.  Then the system will have to be revalued, backed with gold, or all governments fail and people get to create a new political system.  I am hoping for the latter, thus why I will wish that all the good people of this blog buy silver and tell their friends this cause.

Of course there is also the kicker - when oil production plateaus it will spike price and kill the fiat currencies.  The EIA says it will happen in 2015, but they are as accurate at predicting oil production as the BLS is at predicting unemployment.  So I think it will be before then.  When this happens it will be perfect cover to raise rates.  The last thing the oilgarchy wants is anyone knowing that oil is finite and that we have no current technology to replace it EROEI wise.

Wednesday, February 13, 2013

No Good News

Most media outlets and all the political puppets have ignored a negative 4th quarter GDP print and also the fact that jobless claims have stayed near the long running highs.  2012 GDP came in at a paltry 1.5%.  This is at the most hinting at recession.

Yet when did the recession end?  When the Fed began pumping trillions of dollars into the finance sector?  The news cycle is blatently ignoring flashing lights.

So the economy has spun out of control once again, stocks are at highs once again, and everything is fine.  Sound familiar?  It should.  When things are at their worst everything is spun.

I imagine February should see things brew up and a collapse of sorts should come in March.  I don't know if bonds will begin to sell off in earnest, causing rates to rise while stocks....fall?  Maybe stocks rise nominally to inflation since the Fed will continue their large purchase operations.

I do know one thing - precious metals are about to begin their third leg up.  The move should begin in between March and May.  From the charts it looks like silver could trade flat until May but gold looks like it should ramp up before then.  I don't know where the top will be but I do know the next plateau will be at $3k.  We will get there and then maybe something will be done about the Fiat Ponzi the Fed is running.  Maybe not.  Maybe at that point the establishment tries something else stupid.  Who knows.

**Please note, this post was written a couple weeks ago but went to "Drafts" instead of on the board**

How? Buy Silver!

How is it that stocks can rise to all time highs and gold and silver trade flat?  How can miners continue to fall?  The banksters are tricky, but they are not clever.  The only way that this can be done is by supressing the paper price of bullion while leveraging equity.  This will not end well for a financial system that has been broken for decades.

It may be that the only thing that can stop the Fiat Ponzi dead in its tracks is a spike in oil prices due to falling production.  It is possible that a squeeze on silver production can happen, but that depends on how much bullion the banks are willing to let go.  As far as I can tell the bullion bank coffers are emptying at an alarming rate.  Maybe COMEX does default.

As far as gold I think that all Nation-States are in on the malarkey.  The bullion is passing West to East so the East will keep playing the game.  The West will be depleted and America and Europe will finally be conquered by the establishment, an establishment consisting of British Royals, European Royals, and other blue blood factions on the Eastern Seaboard.  They have plans to remain above the water.  How they plan on doing that I haven't a clue.

Other than waiting for peak oil production to hit (which is like waiting for paint to dry) our other option is to take enough silver off of the market so that there is an investment/industrial squeeze.  I know that everyone that reads here understands this and likely discusses it with friends.  It is important to keep doing so.  Remember that each person is different and they should be treated so.

There are many tools to use when trying to get someone to invest in silver:  Do they wish to make money?  Silver looks to have great upside due to industrial use in technology and investment demand.  Do they want to end the Fed?  Taking back the silver supply will destroy the dollar because the dollar and silver trade inversely.  Supply/Demand dictate higher prices, and money will be made, and if enough people do this we will take back our freedom from the totalitarian establishment.

Saturday, January 19, 2013

Silver Shortages

There are reports of silver shortages this week.  The first and most important is that the US Mint will not be shipping Eagles next week, this after record buying in 2012 and 2011.  The US Mint should be the most powerful mint in the world and for them to cut shipments, even for a week, is a harbinger of things to come.

The next report is that industrial silver is seeing a shortage.  This was the goal of the "Buy Silver" movement and if we achieve our goal then we could see a crisis occur in the Fiat Ponzi that will be unprecedented.

In some order we don't know  i) shorts will get stopped out, exacerbating the up move and rendering the derivative part of the suppression scheme useless  ii) the COMEX, which has been defaulting on delivery for years, will default even more so, sending paper to buyers who seek physical  iii)  the dollar will falter as the reserve currency, rendering the MIC complex marooned and the debt worthless  iv) industrial supplies will have problems until miners unshelf some reserves.

Yet at what price will miners, who have already seen production plateau, release reserves?

We need to look at the last big more for silver, the move from $20 to $50, to know what the next big move holds.  While price is rising miners will hold their breath hoping to sell the top.  So if we start the move here, at $30, we should see a top of $75 looking just right for those hoping to take profit in silver.

Putting a time frame on this move is difficult, but once again history will be our guide.  It took silver about 6 months to move from $20 to $50.  This next big move should fall in a similar line.

Prognosticating is all fun and games, but remember that silver will be rising in part due to weakening fiat.  This means will and other commodities will be rising.  This will be a very exciting but also frightening time.  Having silver will help one preserve one's wealth, but in the coming months there will be other things more important to get in order.

For topically relevant reading from this blogroll see -

"The Looming Shortages", October 24th, 2012:

Saturday, January 12, 2013

Currency Devaluation

The Yen is down, Japanese stocks are up.  The dollar is down, US stocks are up.  But in the case of the dollar Vs US stocks over the last two days the dollar did not give up its gains to the stocks.  The dollar was down (via the DXY) 2% over the last two days and stocks managed a paltry move.  It is dangerous when currency is falling and nothing else earns any payment.

Precious metals saw a nice gain on Thursday but came back to earth Friday.  Bonds haven't had a big move in weeks.  Oil sloshed around while the currencies devalued but had front run it anyway.  So in the last few days the world saw its currency devalue with nothing evening out the loss.  This is the most dangerous thing that can happen.

Yet this is what I have been expecting.  Many of us have.  We don't buy silver and gold to become rich, we own it to maintain our purchasing power.  In the long run I believe that is what will happen, and that is why PMs will likely make a nice big move coming up, probably leading up to the debt ceiling debate.

But the currency devaluation of late should make everyone panic.  It is sad that it is not.  People using dollars to store their wealth lost 2% of their purchasing power in 2 days.  We don't need to pity them, for they shouldn't have much faith in the dollar anyway, but the fact is people are scared to invest in stocks and I don't blame them.  They don't know the alternative though - wealth should be stored in things with intrinsic value, namely gold and silver.

Saturday, January 5, 2013

Physical Buying will Prevail

No matter what spin or manipulation the financiers, mediamen, and economists give, in the end there will be no way to stop a sharp price rise in physical bullion.  It has taken awhile and it could take longer and it may take until there is litterally a shortage of bullion for purchase.  That is the long term scenario though, as it is also possible that one of the Central Banks runs out of ammo, switches to back their currency with gold, and the shorts get squeezed out epically.

It is a David vs Goliath battle.  On one side are the people that buy physical bullion.  These people are rarely even millionaires which makes the buying small in comparison to what the paper pushers (banks, HFs) can do.  On the other side is anyone buying miners, ETFs, and other paper vihecles, people shorting the vehicles (JPM or individual day traders), and also people who believe paper is money.

The last group is important to dissect because if people stopped using dollars to buy milk and cookies and we used silver we would crash the system in a day, but this would mean a paradigm change and the status quo is not ready for that and will likely clutch their milk bottles until a new system has formed.  People who own the paper metals and short the metals and other vehicles are just chasing paper and do not realize their is a better system.  This is why it is likely that the only way the system will change is if enough people take enough bullion off the market and create an actual physical squeeze.

There is also a chance that the Central Banks go careening over an edge of monetary policy that no one knew was there, but since all Central Banks are cordinating with each other it is likely that they will not lose their nerve and will keep printing.  If one Bank did jump from the dollar to gold the system would change on a dime but I don't think that will happen.  That is why it is important for us to continue to spread the word and do our part and buy silver.

It may seem like a tall task to take on - the fight for our ability to use real money - but it is ours to keep.  We have the wind at our back considering we our taking a finite resource from a group that prints their resource - the dollar - out of thin air.  But it seems daunting when it takes years and years of high unemployment and other troubling economic news to wade through.  We keep fighting though, as it is not only our nature, it is our destiny.