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Wednesday April 23rd 2014

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Tuesday afternoon, and the world is agog of Apple’s blowout earnings.  Good for them, it’s nice to see an American company doing so well, not via government (i.e. taxpayer) largesse but old fashioned ingenuity and business savvy.  My first “desk job” involved word processing with an Apple Macintosh circa 1990, when it was struggling to survive in the computer business.  Apple’s desktop business never became the powerhouse Steve Jobs envisioned, but my god what he’s done with gadgets such as the iPod, iPad, and iPhone.  He and Bill Gates are two of the smartest men America has ever produced, and I wish the best of luck to Apple for decades to come.

Of course, I don’t own Apple, or any other stock in the entire market.  My last non-Precious Metal stock was sold in April 2000, and my last mining stock last summer.  You see, in a 100% rigged market, buying OR selling short is hazardous to your financial health, particularly when TPTB have no interest in helping you become wealthy.  True, they support the Dow Jones Industrial Average and other stocks deemed important to “national security” – such as TBTF banks – but everything else is fair game, the domain of criminal HFT algorithms.  At times, TPTB attack the stock market if it’s deemed politically expedient, particularly as an excuse to OVERTLY announce new stimulus programs.  As Bill Murphy says, “Market action makes commentary,” and if the PPT takes the Dow down a few hundred points, it knows the puppet media will rush out the “deflationary collapse” headlines so useful in supporting new MONEY PRINTING initiatives.

Of course, that is the opposite of the PPT’s current plan, to NEVER let the Dow meaningfully decline – EVER.  This (Tuesday) morning at the gym, Dow Futures were down 50 points, but miraculously never dropped further despite abject failure of the comical “Greek debt negotiations,” as well news that the IMF significantly reduced its 2012 growth estimate (growth, yeah right!), warning a “severe recession” could ensue if the EU doesn’t act to resolve its debt crisis.

IMF Cuts Global Forecast, Sees European Recession, Warns Of 4% Economic Crunch If No Euroarea Action

I don’t know about you, but that sounds darn gold positive/stock market negative to me, identical to the headlines yielding such market activity last summer.  Essentially, a plea by the IMF for the ECB to PRINT MONEY, and do it NOW, plus a “worst-case scenario” threat of another global financial crisis.  European stock markets were down roughly 1.5% when this emerged, but somehow righted themselves by day’s end.  The Dow, of course, was rescued within minutes of the open to set the tone, with no volatility for the remainder of the day.

The dollar barely budged, and base metals had extremely strong days, such as zinc (+5%), lead (+3%), and nickel (+2%).  Per the charts below, all four spiked up at the COMEX open, with nary a blip downward all day, while Zero Hedge maintained its streak of stupidity by flashing out its moronic “risk off” headline.

I don’t think there’s a more idiotic term in modern markets than “risk off,” which gets thrown out every time the Dow falls 30 points or copper a few pennies, even more so because traditional safe havens like PHYSICAL gold and silver have been the ultimate “risk off” securities for the past 5,000 years, not to mention in early 2009 and mid-2011 amidst dramatic market turmoil.  Even more idiotic is not following up such knee-jerk drivel-spewing with commentary wondering why, in a “risk off” environment, global stock markets ended the day barely lower, base metals higher, the Euro unchanged, and Precious Metals significantly lower.

Not only lower, but via the EXACT SAME PATTERNS as we see every day, be it an up or a down day.  All day long the Dow / Gold x 2 ALGORITHM was on, never allowing gold to meaningfully rise during PPT-inspired Dow goosings.  Conversely, it was smacked down each and every time it attempted to rise, per the ridiculous – and common – jagged pattern in the green line below.  Quite a coincidence that “risk on” commenced at EXACTLY 3:00 PM EST for gold, with yet another mini-WATERFALL DECLINE at EXACTLY the COMEX open at 8:20 AM EST, followed by a third at EXACTLY 12:00 PM EST when it had the gall to try and rise.  Come to think of it, EXACTLY like yesterday’s COMEX trading pattern, and hundreds of other days over the past decade.  The similarity of the red and green lines below is all the evidence you need to see – but not enough for “Tyler Durden” to spend material time on.

And don’t forget the abysmal mining shares, down another 2%, not including another horrific performance from Pan American Silver (PAAS), under relentless attack from Cartel naked shorts to continue the façade that ALL mining share news is horrific.  Miss earnings by a penny, make an acquisition, see a 5% cost increase, etc. – you name it, and your stock will plummet 20%.  Hardly the PROTECTION against imminent hyperinflation one is looking for.  Mining share earnings and resource/reserve multiples have been CONTRACTING since 2007, and until the Cartel is BROKEN I see ZERO chance of this loss-inducing trend abating.

Other than the aforementioned dire IMF economic warning, which in today’s “LOCKDOWN” market environment is no longer newsworthy, just more of the same from both sides of the pond.  There is simply no way of describing Europe other than bankrupt basket case, with perhaps a dozen nations committing ongoing political and economic suicide each day.

Whether it’s Spain begging for more bailout funds (geez, take a look what an unadulterated unemployment chart looks like)…

Desperate Spain Wants European Rescue Fund To Be “The Bigger The Better”

Standard & Poor’s warning of an imminent Greek default…

S&P Warning Of Imminent Greek Default Again – Zero Hedge

The realization that Portugal is next on “financial death watch”…

Portugal Reenters Bailout Radar As Traders Realize Greek “Rescue” Model Is Not Feasible Here

Or Italian police breaking into S&P’s offices last week, and Fitch’s today…

Italy Police Busts Fitch Milan Office

…the end result is the same.  Capital is FLEEING the PIIGS (and will soon be fleeing “bigger fish” such as France, Germany, and the UK…

 

…and the only way to prevent immediate default, and subsequently collapse of the Euro currency, is massive MONEY PRINTING.  TPTB will continue down this course, i.e. “QE to Infinity” as they have no choice, but given the DIMINISHING RETURNS of new debt, the ultimate HYPERINFLATIONARY result is set in stone.

 

 

Here in the States, the situation is no different, other than that our “world reserve currency” enables us to paper over our problems more so than other nations.  That said, this privilege has been catastrophically abused, to the point that America has more sovereign debt than all of Europe combined – and that’s just the “on balance sheet” amount, ignoring $5 TRILLION owed by “off balance sheet” entities such as Fannie Mae and Freddie Mac, plus $100+ TRILLION of “unfunded liabilities.”  Not to mention, the potentially TRILLIONS of bank losses to be transferred to TAXPAYERS in Obama’s abominable “mortgage settlement plan,” to be unveiled shortly.

Obama to Use Pension Funds of Ordinary Americans to Pay for Bank Mortgage “Settlement”

Then again, holes in the dollar’s armor are rapidly widening, as non-dollar currency settlement agreements have been signed by nearly all major Eastern powers in recent months, such as China, India, and Japan.  Even more ominous is this hot-off-the-press announcement that Iran is now accepting GOLD from India in exchange for crude oil, a practice which five years from now may be more common that oil for petrodollars.

Gold for Oil: India and Iran Ditch Dollar – Report

This news is HISTORIC, as it once again re-establishes GOLD as the international currency it has been since the earliest human civilizations.  I cannot overemphasize the importance of this development, which could commence a “chain reaction” of similar REAL MONEY contracts in a very short period of time.  In essence, it represents the “beginning of the end” of dollar, and “middle of the end” of the petrodollar.  I could go on for some time of its importance, but instead will let my good friend Bill Holter do the talking for me…

To all;  “India trades Gold for oil with Iran”, this news came out yesterday with little fanfare and even less response from the markets.  This is really BIG news!  India is  entering into an area that has been absolutely taboo since the 1947 Bretton Woods conference.  It has been “expressly forbidden” to conduct trade amongst nations using Gold as the medium for settlement.  Now, India is skirting the plans and wishes (demands) of the U.S. that the world embargo Iranian oil.  Not only that, as a side irritation to the U.S., our “ally” Turkey, is facilitating trade with Iran through their banking system.  Oh yes, lest we forget, Russia and China have set up trade deals amongst themselves AND with other trading partners where the Dollar will not be used.  It is this “settlement of trade” function that has been a source of huge Dollar demand during our entire lifetimes that is now being threatened.

Please keep in mind that this lower demand for Dollars is coming at a time where the Fed has, is and must in the future, create more Dollar supply (creating debt) than any time in the past.  In my opinion, the ultimate “pushing on a string” will result and Dollar supply will dwarf demand.  This will result in hyperinflation and it will be as we thought all along, a currency event.  Can we go through a period where the Dollar gets squeezed higher because of temporary demand to repay international Dollar denominated debt?  Can we see foreign currencies “drop” faster than the Dollar because foreign currencies are largely backed and reserved with Dollars?  Yes we can, but in the end, where does real and sustainable demand come from if the Dollar is not used to settle trade?

The answer to this question?  It doesn’t in any real form.  I can envision the absolutely comical situation where the Fed “prints” Dollars to “buy” Dollars on the open market (don’t laugh, this has and probably is already happening).  As the current Dollar/debt system is an outright Ponzi scheme, anything and everything will be done to prolong it.  BLS statistics and government statistics are “made up” to the absurd all the time, what would stop the Fed from “fudging” money supply numbers?  We know now of $16 Trillion worth of international loans back in 2008-2009 that we knew nothing of then so…we should faithfully believe they would not do it again?  The Fed has been strenuously avoiding audit and simply says “trust us”.  Well, we did that…for too long and look where we are now.

Do you see what I am getting at here?  This is crunch time big time!  Just as we are NEED extra demand for Dollars, the opposite is happening.  Just as “they” are running out of paper tricks and physical supply to depress Gold prices, demand is ramping up!  Mind you, this ultimately HAD to happen sooner or later,  international traders are taking matters into their own hands and Gold is finally being re-monetized.  My guess is that we will hear of a few more “Dollar-less” deals announced and then we will get the Big One.  That being some currency or currency block that backs their paper with Gold on a ratio.  Some sort of linking or (God forbid according to Bernanke and Geithner) “peg” to Gold is announced by a renegade government.  Even 2 years ago this sort of “tin foil hat” thought was laughed at, soon it will be reality.

Anything, any policy and any type of volatility can commence from here.  Do not be surprised by anything on a daily or very short term basis as we are in the desperation phase and any type of leverage or risks will be undertaken by the official sector to retain power (control).  It will not stand and Mother Nature’s real and true money, Gold, will be the last man standing!  Please, do not “get out of position” for any reason!  Regards,  Bill H.

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Today’s RANT topic is going back to basics.

My job is to alert you of the REAL state of the economy, the so-called “shadow world” where TRUTH exists for the few that dare to enter, but my passion is empowering people to PROTECT THEMSELVES.  As David Schectman noted in yesterday’s blog, he views me as a whistleblower against the establishment, particularly the Wall Street crime syndicate that enslaved me between 1989 and 2005.

I may be “young” in absolute terms, but at 41 have seen all sides of the financial world, as a compliance officer, bond broker, buy-side trader and analyst, sell-side analyst, and investor relations officer and consultant.  I earned my Chartered Financial Analyst, or CFA, in 1998, and for those doubting my “credentials,” here is a list of the firms I worked for, or interned with, during my 15-year Wall Street career.

 

Firm Position
Paine Webber College Intern
Shearson Lehman Brothers College Intern
Merrill Lynch, Pierce, Fenner & Smith College Intern
A.G. Edwards & Sons College Intern
Prudential Securities College Intern
S.G. Warburg & Co. Compliance Officer
Cantor Fitzgerald Bond Broker
Kensington Partners Buy-Side Analyst/Trader
(Capital One) Southcoast Capital Sell-Side Analyst
Salomon Smith Barney Sell-Side Analyst

 

Of course, that’s just career number one, as since leaving Salomon Smith Barney in 2005 I have worked exclusively within the mining industry.  I spent four years as an Investor Relations officer for junior mining companies, and one with Torrey Hills Capital, the largest U.S.-based Investor Relations consultant to junior miners, all while writing “RANTING ANDY” blogs and acting as, for all intents and purposes, an unpaid principal of GATA, the Gold Anti-Trust Action Committee.  While working with myriad mining companies – at least 30 by my count – I also gained intimate knowledgeable of Canadian investment banks, which diligently work to destroy their clients the way U.S. investment banks destroy the nation at large, and the global financial system for that matter.  For those seeking to impugn my “street creds,” I welcome you to contact anyone I’ve worked for.

Why am I writing this, you might ask?  NOT to brag, and frankly I’m not sure there is much to brag about, except that I worked my arse off for two decades, observing a lifetime’s worth of unethical industry practices along the way.  In other words, my “whistleblower” persona – RANTING ANDY – was borne mostly of NURTURE, and hopefully a bit of NATURE as well.

Most communications with readers are positive, but occasionally I am criticized, and take each message seriously.  Some criticisms relate to my opinions, some my writing style, and some my contentious attitude toward the mainstream.  As much as I would like it to be the case, I will never be able to appease everyone, but I like to think I am an amiable chap, and that such sentiment is reflected in my RANTS.  However, beauty is in the eye of the beholder, so some will always believe otherwise.  All I ask is to be shown the same RESPECT I extend to you, unless you are evil bankers and politicians seeking to harm or discredit me.  If that is the case, I will continue to demonstrate the same level of RESPECT you have shown me – NONE!

I am very open-minded socially, viewing the entire world as a meritocracy.  First impressions mean a lot, but the entirety of one’s work means more, and sometimes – though rarely – first impressions are wrong.  I cannot promise you will like – or even agree with – my work, but that each of you will be treated with RESPECT if such sentiment is reciprocal.  It matters not your age, business credentials, or social background.  Heck, it doesn’t matter if you are friend, neighbor, colleague, or even FAMILY, so long as you RESPECT my right to an opinion, which I provide, by the way, free of charge.

My overarching view is we are all born equal, uniformly deserving of RESPECT and DIGNITY, and for as long as I live, and write, I will follow that credo.  For those seeking to discredit, slander, or shed my reputation in a negative light, good luck.  I write for Miles Franklin because its principals share the same “mission statement” about life, and if there’s one thing I hope to be remembered for when I die, it will be the RESPECT I have shown the world, and all individuals around me.

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