If I need to SHOCK you into attention, I will.
Given that I know gold is going, MUCH, MUCH higher, it doesn’t matter what number I put in the title. At current prices, PHYSICAL precious metals are the bargain of a lifetime, far more so than when gold was $250/ounce a decade ago, and silver just $4/ounce. The explosion of global MONEY PRINTING since 2000 will be remembered as the most insane financial experiment of all time, which unfortunately is just getting started. That $100,000/ounce gold projection is NOT a joke, as you will see at the end of this RANT.
Before I get started, I want to darken the mood a bit, as the world is a bit too giddy about the hype of the abbreviation du jour, the LTRO funding facility that emerged out of Central Bank ether to yet again enslave – er, save Europe with another massive dose of crack – er, free bank loans.
I see no difference between the LTRO bailout and the November 30th Fed “swap facility,” only this time the ECB, which just two weeks ago said it wouldn’t print money, is the bank showering the world with paper. THAT’S how bad things are, and wouldn’t you know it, the LTRO emerged, yet again, just as Bank of America was about to break down through $5.00/share, creating a landslide of margin-based selling that could have kick-started the END GAME. Not to mention, right before the New Year, to ensure TBTF firms aren’t scrutinized for awarding gargantuan, taxpayer-funded bonuses to executives before the system collapses in the first half of 2012.
In my view, this ominous, apocalyptic cloud formation is more appropriate to the current financial situation than the horns and whistles of this morning’s BLATANT bank bailout, and accompanying stock market orgy, which will likely have the same decreasing HALF-LIFE of all previous salvation attempts.
Irrespective of the LTRO hype, which I’ll discuss further in a bit, yesterday was, yet again, more about MARKET MANIPULATION than anything else. To start, once again we likely would have seen major equity declines if not for the LTRO buzz, although it turns out the LTRO was announced several weeks ago. In other words, what was the difference between Monday’s market rout, pushing Bank of America into the 4s and many other bank stocks toward 52-week lows, and Tuesday’s market bonanza?
The answer, of course, is a GLOBALLY coordinated PPT effort, likely as GARGANTUAN as the actual LTRO itself!
So keep that in mind when you read my gold price calculations at the end of this RANT, which exclude the COVERT money printing that never sees the light of day. But then again, last time I looked the “President’s Working Group on Financial Markets” was anything but covert, and…what’s this…Taiwan stocks surged this morning due to a government pledge to buy stocks with its “National Financial Stabilization Fund?”
Sounds a lot like the PPT, doesn’t it, i.e. the “Bernanke Put.” Or as they call it in Japan, the “Shirakawa Put.” Hmm, a “1% rule,” I wonder where I’ve seen that before…
Not only was yesterday’s year-end Wall Street bonus rally a sham, based on NOTHING but a flood of OVERTLY printed money, but the PPT was still required to save the day, just as it was the day after the Fed “swap facility” was announced, as well as all other “emergency liquidity injections” this Fall, many of which I’ve forgotten already due to their sheer volume. The PPT’s actions have become so all-encompassing, I lose track of the older ones, just as is the case with Cartel attacks on PMs over the past decade.
As you can see below, Bank of America didn’t respond too well to the market goosing, rising a whopping $0.18 to $5.17 on a day when the Dow rocketed higher by 3% and most bank stocks soared. Twice the stock was rescued from a decline toward $5.00/share, once at the open, and once at 2:15 PM EST when it sagged to just $5.10/share with the Dow up more than 300 points. Not good, and FAR WORSE than the mini-surge to $5.45 it received the day of the Fed “swap facility” three weeks ago, topping out days later at $5.95 before plunging to $4.92 on Monday. Keep your eyes peeled on THE MOST IMPORTANT STOCK IN THE WORLD, destined for bankruptcy or nationalization in 2012.
As for the Dow itself, it demonstrated the same, manipulative propping yesterday, a day when by all accounts it should not have required it, as a major PPT mantra is to make sure the Dow SOARS during major, OVERT liquidity operations like yesterday’s LTRO propping, with nary a minor decline. Each time the Dow tried to fall a few points, it immediately shot back up, particularly when BAC stock weakened a few pennies. Notice the opening print at the KEY ROUND NUMBER of 12,000, supported all day in the name of fooling the mainstream media and the handful of remaining, non-HFT computer market participants.
I now count ELEVEN separate PPT operations to support the Dow since the “debt ceiling debacle” tanked it in August, as the KEY ROUND NUMBER 12,000 is vociferously defended with UNLIMITED money printing and COVERT futures buying. Talk about painting the tape, as it plots each morning how to push the 200 DMA above 12,000 to try and inspire more “black box” HFT buy programs to kick in.
Conversely, of course, the PM markets were forcefully capped all day long, with gold rising a whopping 1.5% while other commodities SOARED, such as crude oil by 3.5%, which does not have “1% and 2% rules” related to its upward movements. Notice the typical rise all night until it is CAPPED for the day in the early COMEX hours, with the high trade of the day at….whattya know…the “cap of last resort” time at EXACTLY 12:00 PM EST. In other words, on a day when the primary story was a massive MONEY PRINTING operation, gold rose 1.5% while the Dow rose 3.0%.
Think about it, gold was ATTACKED starting on December 8th, just minutes after it surged past $1,750 following the ECB rate cut, coincident with the following headline hitting the tape…
-MARKET SOURCES REPORT BIS, BOE & FEDERAL RESERVE WERE SELLING GOLD AFTER IT POPPED TO SESSION HIGH
Such incredible timing for a statement later retracted with nary a headline by Germany’s MNI news service, just as gold was blocked from rising above the KEY ROUND NUMBER $1,750/oz for the 22nd TIME in one week. And with such detail, citing the BIS/BOE/Fed “troika” that was primarily responsible for gold’s “Brown Bottom” in 2000. The puppet media didn’t even see this headline, instead attributing gold’s plummet, which of course happened at EXACTLY the 8:20 AM COMEX open, as “deflation fears.” Meanwhile, just two weeks later, and with Bank of America and several other key financial stocks trading at multi-year lows, the Dow is essentially the SAME price as it was then, while gold is down $115, or 7%, and silver $2.75/oz, or 9%, and the most economically sensitive commodities, crude oil and copper, down just 2% and 5%, respectively. THAT, my friends, is Cartel Suppression 101!
To drive this point home, let’s go back to the announcement of the Federal Reserve emergency “swap facility” on November 30th. BAC closed on November 29th at $5.08/share, and in after-hours trading fell to $5.00/share after it was downgraded by Standard & Poor’s. Meanwhile, the Dow closed that day at 11,555, having sunk below 12,000 two weeks earlier, looking extremely heavy.
Voila! On the morning of November 30th, the “swap facility” was announced, BAC rose to $5.44/share, and the Dow, miraculously, jumped 4.2% to 12,045, yet again pushed above the KEY ROUND NUMBER of 12,000 by the PPT. And mind you, I didn’t remember this level of telling detail, only that the Dow outperformed gold yet again during an important MONEY PRINTING, PROPAGANDA moment. And let’s see what gold did that day…
Boy, am I good or WHAT? Early surge on the COMEX, and immediately CAPPED at the KEY ROUND NUMBER of $1,750/ounce, not to mention at EXACTLY 10:00 AM EST, at EXACTLY the daily 2% upside cap that has held on 99% of all COMEX trading days over the now 12-year gold bull market! To put it into perspective, below I posted yesterday’s COMEX-only chart for you to see how similarly capped gold was during BOTH important MONEY PRINTING, PROPAGANDA moments.
Not to mention, as I write this morning we have already had our first DAILY WATERFALL decline, at the odd Cartel hour of 5:30 AM EST when gold threatened to go parabolic. Not a single market so much as budged while gold plunged nearly $20 in $15 minutes…
…except, of course, SILVER, which gosh darn it was repelled for the second straight day when it attempted to retake the very KEY ROUND NUMBER of $30.00/ounce. Nah, no manipulation here…