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PaperBug Fight In The Gold Jail

Stewart Thomson
Feb 23, 2010

1. There's a new competition underway in the gold community. The Gman worshippers and the toilet paper currency worshippers, having failed totally to make you any money in gold, or money in anything for that matter, have now decided to remake their own story of the 1929 boom and bust era, and use it to see if you're ready, willing, and able to report to the Constitution with your chainsaw, to help them carve up what's left of it.

2. Their kindergarten analysis is that the depression was actually caused by the Gold Standard. Here's a wake-up-call for these failed traders: The boom in 1929 was caused by low interest rates, extreme leverage (90% on NYSE stock trades), and the banksters pumping the media non-stop that we were in a new era. The banksters sold massive amounts of stock to an already all-in public.

3. Then they hiked rates and took an axe to leverage. The market tanked because there was nobody left to buy. The public went into savings mode, bill paying mode. The banksters knew that's how they would respond after watching their investments get smashed. The public began demanding gold from the Gman instead of dollars.

4. The Gman, whose hallmark points include being a liar, a deadbeat, and a mass murderer that makes the worst serial killers look like Saints, reneged on his word, and not only refused to continue to sell gold to those who wanted it, but then actually reversed the situation, so rather than being “as good as gold”, the dollar became “as worthless as we want it to be, and you the public gets to pay for all the damage we do to it.” The Gman banned the public from owning gold as currency. He could have paid the public at the revalued rate, or even a part of it, but no, he decided that only the banksters and the Gman would benefit from the multi-national rip off.

5. Once all the gold was handed in, the public was helpless. The banksters owned equities and commodities, and the public owned cash, but not much cash. I want you to think very carefully about the power of the printing press, because once you are all in cash, all you have, your financial soul as it were, is 100% in the hands of the Gman. He is sole judge and jury of your financial fate. I cannot overemphasize that point. Do NOT take it lightly. After the 1929 “gimme all your stock at 10 to 30 cents on the dollar” play, to seal the deal, the banksters ordered the Gman to devalue the dollar against gold with the public then all-in on dollars. That final action effectively impoverished the public whose main investment decision at that point was whether to take white or brown bread after standing in the bread line for hours.

6. The deflationist micro minds in the gold community, essentially gold bears functioning wearing gold bull masks, continue to confuse Freedom with Money, and they continue to think that entire companies aren't built by the founders and the workers, but rather by the macro actions of Ben Bernanke and the other Constitution Destroyers. The question is, when your last freedom is handed over to the banksters and the Gman with that last promise of money in your pocket, what are the odds of you winning that lotto, after all the other tickets the Gman sold you failed to win you anything except another string tied to you by the bankster puppeteers? Those laughing at Ron Paul about what he is trying to do for your freedom, not your money, on their best day, are disgusting maggots.

7. The reality is that investors had plenty of opportunity to sell in 1929. Instead, sadly and stupidly, they bought. The other fact is that the banksters were simply better traders. Professional traders. They sold strength while public price-chased a pipedream and then busted out. All the way to the bread line. Anyone who had a regular job and sold out in 1928 into strength, had plenty of money to weather the depression.

8. I don't need any Gman to get me thru a depression, and I certainly don't need him telling me I need to trade another freedom for his roll of toilet paper bird in the bush, money he's promising me from his Good Ship “This Time Is Different, I promise!”.

9. Fast Forward. To Today. This is another 1929. When the banksters had the public all-in into the stk mkt 1999, buying as they sold, they hiked rates. Down went the stock mkt. Enter junk bonds and real estate. The public started another price chase in both those assets, financed and leveraged to the max, courtesy of the banksters of course. When there are no more buyers, guess where a market goes? Answer: Down.

10. Enter Quantitative Easing. If a market has no more buyers and the fundamental situation appears negative, odds are high that market will fall in price over time. When an entity buys its own bonds, price is supported. In the case of a corporation buying its own stock, the amount of money available to do that is limited by revenues and available credit.

11. In the case of the government, the Gman, there is no limit to the amount of its own bonds it can buy. The Electronic Printing Press makes what Jim Sinclair terms “Quantitative Easing to Infinity” possible.

12. I don't think most of you in the gold community took last week's inflation numbers very seriously. The battle against deflation led by Ben Bernanke is not over. Those numbers were horrific. Horrifically low. While pumping Bloomberg with news that “the crisis is over, we fixed it!”, the reality is that Ben Bernanke is likely horrified. Mr. Macro, who my subscriber King Kong calls one of the top economists in New York, told me yesterday that he is looking for Dr. Bernanke (aka Dr. Pinocchio) to launch a major ramp UP of QE, Quantitative Easing.

13. Quantitative Easing in plain English is the buying of assets by the Central Bank. The story they tell you is that their QE actions puts cash into the financial system, which the banks can then lend out and/or business can use to expand. Here's a reality check: Business is hoarding cash and/or using it to buy other companies. Not to expand internally. The banks are also hoarding cash. They aren't interested in making loans and companies aren't interested in getting loans. The companies that want loans are deadbeats on the verge of going off the board. The banks aren't idiots; they aren't giving the deadbeats any money. None.

14. My view is that the next phase of Quantitative Easing is going to involve some bankster controlled Gman entity buying the asset that is: Gold. A ramp-up of the T-bond QE program means the US dollar comes under pressure, perhaps extreme pressure, on the sell side.

15. The key point is that in the end, QE is all about revaluing OTC derivatives against the dollar. Not about kick-starting the economy, although that, hopefully, is a secondary goal of these scum bags. Buying gold is a cheaper means of devaluing the dollar, as opposed to buying a zillion worthless assets like Fannie Mae's OTC derivatives, and far cheaper than buying trillions in T-bonds.

16. Putting cash into the economy via QE is not having any practical effect on the Gman's massive debts. Increasing taxes won't produce anything but a token increase in revenues; any serious raise in taxes would further reduce total Gman revenues, not increase them. The “solution” is not to kick-start the economy. That's not going to raise the kind of money needed to pay off the banksters for their OTC Derivatives wins. Only a mangled dollar will serve as a grand “solution”. Of course, the minor detail that a minor “side effect” of the dollar devaluation medicine is the total impoverishment of the public is about as worrisome as a fly to the banksters and the Gman. The Gman burns his creditors, and he'll boast to the taxpayer how great that is, but it is the taxpayer who is the creditor, and he's very close to getting seriously stiffed on what he's owed.

17. Preparations are underway now for the great gold revaluation. Since the goal is to revalue the banksters' gold, not yours, the first step is to work to “educate you” about the folly of owning gold here and now. It is ironic that the banksters work so hard to convince the public that the world's lowest risk investment is actually one of the highest risk investments, while buying nearly every ounce sold by the public and the funds at the same time! The only thing more bizarre than their actions, is the fact that they are 99% successful at it!

18. They are the world's most patient investors. The banksters have so much patience they make Warren Buffett look like a day flipper, thinking in terms of decades and centuries, not just years. The average Joe Blow doesn't have that kind of patience. He bought the “gold to $10,000 in 30 seconds!” story, which is a story that could happen, but when it didn't happen on his schedule, Joe Blow sprinted down to his golf ball advisor screaming, “all I know is you told me to buy stocks in 1997 after I threw all my 7% T-bonds in the garbage because that wasn't good enough for me, and now after I blew up in high tech stocks I'm underwater on these junior golds I bought into the tops of May 2006 and Feb 2008. Liquidate everything and put me in cash now!” Don't follow Joe Blow, because I'm afraid the end of that trail is, like 1929, the Bread Line.

19. A number of well-intentioned writers have tried to excuse the buyers of the 1.4 quadrillion in OTC derivatives (half of which is now hidden from your view, via mark to Pinocchio model accounting) from responsibility for their actions. The reality is that when you are a team of public certified accountants, lawyers and MBA's handling an entire city's monies, claims that you were duped into 30 to 1 leveraged investments with zero liquidity, are just plain rubbish. The buyers knew exactly what they were buying and every single risk involved, and they bought for one reason. Greed. “Greed doesn't just financially harm you, greed kills you. Eat like a bird in terms of taking profit, or you'll look like an elephant sitting on the toilet in terms of booking losses.” –Gold Lion of Lebanon discussing the gold mkt with me, Feb 18, 2010.

20. Sadly, an $85 up-blast in the price of gold, from 1045 to 1130, has seen few in the gold trading community buying into the 1045 “it's all over” lows, and even fewer booking any profit into the 1130 highs. The bears are even more pathetic, having gone short into 1045 after gold fell $180, getting stopped out multiple times in a cornucopia of loss-booking, lying about it, all the while drawing their fantasy targets at gold $700 to scare you out of your gold, gold that is being bought by the banksters on any and all weakness.

21. Anything is possible. In the market. This morning gold broke the 3 week up trend-line from 1045. Silver is holding but the short term situation looks grim at best. How much money is an $85 an ounce move in the price of gold bullion? There are 2 ways of looking at it. First, $85 is an amount that is as much as the entire price of gold bullion was just a few decades ago. The 2nd is the same thing, but with the additional thought that such a move now being less than 10% of gold's total price today, is an indication of just how horrifically the banksters have mauled the US dollar. They have mauled it to the point that 3 weeks worth of movement in the price of gold today, is an amount that is 4 times the entire dollar price of gold in 1929. That's how devalued the dollar is right now, and it is on the verge of being devalued more, much more.

22. I mentioned above that the short term technical situation looks grim for gold and silver. You want to buy anything that looks grim, provided the price weakness is there. I don't sell trend-line breakdowns, I buy them. Oil has risen $11 from the lows under $70, to about $81. That is a 16% power move, and it has to be sold. Here's a look at the oil chart Daily Oil Chart. Notice the short term stochastics reaching towards the “ceiling” and some of the other oscillators beginning to roll over. Most importantly, notice the horizontal resistance in the 82 area. Some technicians will label the current rally as the right shoulder of a head and shoulders top, with a neckline at the 70 marker. I'll address that in a second.

23. The stock market is a key “gold relative” and while the stk mkt looks way higher longer term, the short term situation is a little creaky. Dow Daily Chart. Many Elliott Wave students believe the stock mkt rally from Dow 6500 is over, and the Dow, commodities, and gold/silver will now fall away into a deflationary abyss.

24. It's very important to keep in mind the fact that the central banksters can actually read a chart. Dr. Pinocchio is fully aware that the crisis is a battle against deflation, not a battle against inflation. I know it comes as a big surprise to the gold bears, the deflationist economists, and the stk mkt per ma bears, but the banksters are actually understand money fairly well, which is why the poorest lead banksters are billionaires, and the richest are trillionaires. When you own an electronic printing press with the power to print unlimited quantities of the world's reserve currency, and you look at charts –and inflation numbers- that indicate the possibility that deflation is accelerating, what would be your response if you had a mandate to fight deflation at all costs? Answer: asset prices must rise. How do they rise? The simplest way is to buy them hard after getting the weakest players to bet big on the dollar with leverage. I believe a massive dollar long squeeze is being prepared, one that will shock the fundsters with it's intensity. Where the dollar bugs are making their critical error is their focus on the USDX, the dollar index. The Euro is the main component of that index. The bugs think they are winning, and they are, but only against the Euro. All paperbugs will be destroyed by the Gold Wrecking Ball. It's like a bunch of USD paperbug prisoners bragging how they beat up another Eurobug prisoner. In the end, they're all still in the jail. The Gold jail, and none of the paperbugs are getting out for many many years. The question is:

Are You Prepared?


Feb 23, 2010
Stewart Thomson
Graceland Updates
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Stewart Thomson is no longer an investment advisor. The information provided by Stewart and Graceland Updates is for general information purposes only. Before taking any action on any investment, it is imperative that you consult with multiple properly licensed, experienced and qualifed investment advisors and get numerous opinions before taking any action. Your minimum risk on any investment in the world is 100% loss of all your money. You may be taking or preparing to take leveraged positions in investments and not know it, exposing yourself to unlimited risks. This is highly concerning if you are an investor in any derivatives products. There is an approx $700 trillion OTC Derivatives Iceberg with a tiny portion written off officially. The bottom line:

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