PaperBug Fight In The Gold
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
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
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
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There is an approx $700 trillion OTC Derivatives Iceberg with
a tiny portion written off officially. The bottom line: