gold bottomThe signs are good. With record short positions in gold and silver, hedge funds and algorithmic traders should be worried at the lack of price confirmation: gold is holding well above its bear-market lows and silver is refusing to weaken into new low ground.
The sudden increase in shorts in both metals amounted to a dramatic bear raid. With gold rising every day this week the squeeze is now on, suggesting in the absence of any new and material factor the current rally should have enough legs to take gold to the $1300 level. The situation in silver is likely to have a more dramatic outcome.

 

launch rocket verticalHistorically, a high open interest in silver is associated with short term market tops because the hedge funds have gotten negligently long silver futures and the market manipulating big banks have taken the other side with extreme-sized short positions.
This time around the situation is the exact the opposite.
The hedge funds are now historically short silver futures and the banks and silver producers (mining companies who hedge production using futures) are either net long silver or are sitting with historically low hedge positions.
Silver is now set up for a short squeeze of historic proportions. 

gold stormThe current crazy/frustrating/scary/pick-your-expletive level of instability in today’s market is actually GOOD news.
The disconnect between financial asset prices and fundamentals simply must — per the laws of Nature — resolve itself.
And given the interruption-free 45-degree ramp the markets have experienced since 2009, we can definitively say that we are closer to the coming correction than we have been at any time in the past half-decade .
The bullet has been dodged for five straight years — given the instability and the inevitability, how much longer can it be dodged?   Not for long, is our conclusion.  And given the uninterrupted rise to record highs, the potential energy stored in the system now should be much more kinetically destructive than it would have been had it happened sooner.
So, we are at a time in the markets when confidence is high that a big move will happen soon, and happen to the downside.

cliff fall coyoteThe middle class happily accepts high risk in return for temporary gains in the asset bubble of the day, guaranteeing a steady progression of losses.
There are now three asset bubbles to choose from: housing, stocks and bonds.
In each asset class, the majority is convinced that there can only be further gains from here. Risk is seen as low and complacency is high, the classic signs that the outsized gains have already been reaped and all that’s left in the tank to divvy up are the risks and losses.
No wonder the wealth of the middle class keeps declining: every temporary gain from joining the investing feeding frenzy sets up staggering losses when the bubble du jour pops and there’s nobody left to sell to.
Meanwhile, those who bought early have long since sold out and are now buying outlier assets that are viewed as “risky” by the majority who happily accept high risk in return for temporary gains in the asset bubble of the day, guaranteeing a steady progression of losses and an erosion of real wealth.

droneIt appears even the general public (sheeple) are beginning to wake up.  During the victory celebration for the Stanley Cup outside the Staples Center, the rowdy Californian crowd apparently took objection to the NSA’s observation of the event overhead via one of its 30,000 drones deployed in the US.
As the unbelievable footage below shows, the Kings fans explode into celebration as a lucky shot takes down the drone, which is subsequently demolished by the crowd.
Public sentiment is beginning to turn against the police state. 

33 cities in America have either banned or are considering banning feeding homeless people.
It’s so bad, that the UN singled out the U.S. in a report on human rights for our nation’s criminalization of the homeless.
Where’s George Clooney and the rest of the Hollywood faux human rights celebrities on this issue?
Crickets.

debt infographic

Source: Demonocracy

The numbers that you are about to see are likely to shock you.  They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine.
As you will see below, the total amount of debt in the world is now more than three times greater than global GDP.  In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt.
But even that number pales in comparison to the exposure that big global banks have to derivatives contracts.
It is hard to put into words how reckless they have been.  At the low end of the estimates, the total exposure that global banks have to derivatives contracts is 710 trillion dollars.  That is an amount of money that is almost unimaginable.
The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises. 
The following are 12 numbers about the global financial Ponzi scheme that should be burned into your brain…

fishWhen a few food pellets are randomly tossed into the tank at a fish hatchery, the first fish in the vicinity to respond to the splash get the pellets. In the stock market, the pellets are yield and alpha.
The fish milling around in the tank are highly attuned to the actions of their mates, and those nearest the first fish quickly follow them to the source of the food. This makes good sense, as the food (yield/alpha) might be plentiful and the second wave of fish would be well-rewarded for being second.
These fish attract the attention of virtually every other fish in the area, and within a few seconds the water where the few pellets landed is boiling with fish seeking pellets (yield/alpha).
This pattern can be repeated until one runs out of pellets: toss a few food pellets in a sparsely populated area of the tank, and watch how quickly the majority of the fish rush to the spot where the food has already been consumed.

Richard RockefellerFormer Chase Manhattan CEO David Rockefeller’s 65 year old son Richard Gilder Rockefeller, and the great grandson of John D. Rockefeller Sr. has died in a small plane crash outside of NYC at Westchester Country Airport.
Richard had reportedly celebrated his father’s 99th birthday with family Thursday night.
Details below: 

silver rallyThe silver COT data (yes, I know, manipulated…) is, as I read it, as bullish for silver as it was at the silver bottom last June. This suggests another good buy zone either just passed or will arrive very soon.
Many technical indicators for both silver and gold markets are deeply over-extended on the down-side and flashing “buy signals.”
Silver has dropped back to levels seen in 2008 and 2010, before the run-up in late 2010 – April 2011.
Is another big rally about to happen?

The government of Australia has seized a whopping 360 million dollars from bank accounts dormant for only 3 years!
And yes, this kind of thing is going on all over America as well.
Do you have a bank account that you don’t actively use or a safe deposit box that you have not checked on for a while? 
If so, you might want to see if the government has stolen your money. 

One of the most significant realizations to emerge since the Edward Snowden revelations, is the understanding that we need more secure tools for would be whistle-blowers to more easily provide sensitive information in a secure and anonymous manner.
As such, we have seen the deployment of encrypted drop boxes by several media outlets.  I highlighted one of these a little over a year ago called Strongbox, which was a project announced by the New Yorker and was what Aaron Swartz was working on just before his death.
Recently, the Washington Post and the Guardian have released something similar called SecureDrop. The Washington Post described it as such:
Users may have noticed a button on The Washington Post homepage called “SecureDrop.” The new feature enables confidential sources to contact The Post and share documents in an encrypted fashion. The Post launched this feature to offer even more security and anonymity to sources.
Naturally, this sort of potential transparency and ease of exposing corruption and criminality is not welcome within the halls of government.  As such, the reaction from Obama Administration lawyers is to issue subpoenas for information so that they can avoid cracking the encryption and the U.S. court system altogether.

poker big lossesIn the latest Keiser Report, Max Keiser and Stacy Herbert discuss chumming in financial markets being the rigging of prices and indexes, like Libor, forex and gold, which convinces people it is safe enough to get back into the markets.
The fraud is now so huge, Max says, that the ECB needs a bigger boat.
In the second half, Max interviews David Graeber, author of Debt: The First 5000 Years, about the scariest monsters being those that you turn into – like zombies or vampires – and that is what the modern economy has become as we are all forced to think and act like bankers.
David Graeber all suggests that BS jobs are the Sovietization of capitalism.

BernankeIn this excellent interview with Finance & Liberty, Rick Rule lays out how the end of the London fix in August is likely to affect the silver market, whether we just witnessed another bottom in the PM sector, why platinum and palladium are currently outperforming gold & silver, and why the Fed’s counterfeiting is bullish for gold
Rick Rule’s full interview is below: 

Untitled…Likely by smart money.
With hedge funds piling into the short side of gold and silver futures – and likely shorting and naked shorting junior mining shares aggressively – it “smells” like the smart money is starting to flow aggressively into the junior mining shares.
My colleagues and I have noticed over the last 10 or so trading days that more often than not, the leveraged mining stock trusts are trading higher in the last few minutes of trading on big volume spikes.
As you will see below, yesterday was a textbook example:

Some of us tried to warn that this would happen.  When you create incentives for people to come to the United States illegally, of course that is exactly what they are going to do. 
We have made legal immigration an absolute nightmare while keeping the backdoor wide open for gang members, drug dealers, serial criminals and welfare parasites.
We have created incentives for tens of millions of people to come storming into this country illegally, and in the end we are going to pay a great price for that.

panicIn an interview with CNBC, Goldman Sachs CEO Lloyd Blankfein advises the CNBC host that at some point, some event will happen that will reset portfolios.
Blankfein states that interest rates will rise, which will be a shock to the market, and states that  I have a lot of bad dreams at night, liquidity is one of them.
Lloyd Blankfein’s full interview with CNBC is below: 

bankstersWe used to need banks to keep track of who owned what.   Not any more.  Bitcoin and its rivals have proved that banks can be replaced with software and clever mathematics.
Until recently, we’ve needed central bodies – banks, stock markets, governments, police forces – to settle vital questions. Who owns this money? Who controls this company? Who has the right to vote in this election?
In short, Bitcoin could be the gateway to a coming digital anarchy – “a catalyst for change that creates a new and different world,” to quote Jeff Garzik, one of Bitcoin’s most prolific developers.
It’s already beginning

Putin ammo shortageThe Russians are actually making a move against the petrodollar.  It appears that they are quite serious about their de-dollarization strategy.  The largest natural gas producer on the planet, Gazprom, has signed agreements with some of their biggest customers to switch payments for natural gas from U.S. dollars to euros.
And Gazprom would have never done this without the full approval of the Russian government, because the Russian government holds a majority stake in Gazprom.  There hasn’t been a word about this from the big mainstream news networks in the United States, but this is HUGE.
What we are witnessing right now is just a turning point, and adds to the “perfect storm” that is starting to brew for the U.S. economy.
What you are about to read is absolutely stunning, and yet you have not heard about it from any major U.S. news source.   But what Gazprom is now doing has the potential to completely shake up the global financial landscape. 

U.S. President Barack Obama.(Reuters / Pascal Rossignol )

The Obama administration may be looking for an example (for gun control & confiscation) in Australia as the White House considers potential new firearm laws for the United States in the wake of the latest in a series of devastating school shootings.
US President Barack Obama cited gun rules in America’s down under ally during remarks that were broadcast on the web Tuesday afternoon only hours after a gunman entered a high school near Portland, Oregon and opened fire, killing a student.

“My biggest frustration so far is the fact that this society has not been willing to take some basic steps to keep guns out of the hands of people who can do just unbelievable damage. We’re the only developed country on earth where this happens.  And it happens now once a week.  And it’s a one-day story.  There’s no place else like this,” the president said.

WillieA processing plant is being formed, to rid the Saudis of USTreasury Bonds, and to rebuild their Gold reserves.
The Saudis  have announced a new sovereign wealth fund to be established, independent of their central bank, devoted to prudent investment.
Read Gold investment.
The indication is clear movement away from the USDollar and USTreasury Bond complex. The US-Saudi divorce is speeding away from the lawyer’s offices, and asset redistribution is the key word.
Abandonment of the Petro-Dollar involves the reversal of a generation in commitments.  It involves discharge of decades of accumulated rubbish US$-based debt paper.
We could have the first sighting of a BRICS Central bank outpost for processing USGovt debt securities, straight into Gold bullion.