end badlyAt the last FOMC meeting, by prematurely announcing the timeline and the specifics of an exit from QE, Bernanke might have lost control of rates and volatility. The current US economic growth is still feeble and hinges on housing, which would be slowed down by raising rates. Banks, while better capitalized than pre-crisis, are still not lending to most borrowers and would be dearly affected by too fast increases in rates. Moreover, European woes still threaten the stability of the international financial system and the recent rush to the exit might further exacerbate funding pressures for weak European banks. Finally, the US government (amongst others) debt load, while already unsustainable, would keep on climbing if rates were to increase only by 100bps.
The chaotic reaction by market participants and the corresponding increase in yields now risks destabilizing this very fragile equilibrium.   It is yet unclear whether or not the damage control from the other Fed Presidents will put a lid on yields and market volatility, or if the damage to the Fed’s (poorly executed) exit strategy is permanent.

haircut bail-inDid you actually believe that they were not going to use the precedent that they set in Cyprus?  On Thursday, EU finance ministers agreed to a shocking new plan that will make every bank account in Europe vulnerable to Cyprus-style bail-ins.  In other words, the wealth confiscation that we just witnessed in Cyprus will now be used as a template for future bank failures all over Europe.  That means that if you have a bank account in Europe, you could wake up some morning and every penny in that account over 100,000 euros could be gone.  That is exactly what happened in Cyprus, and now EU officials plan to do the same thing all over Europe.  For quite a while EU officials insisted that Cyprus was a “special case”, but now we see that was a lie.  International outrage over what happened in Cyprus has died down, and now they are pushing forward with what they probably had planned all along.  But why have they chosen this specific moment to implement such a plan?  Are they anticipating that we will see a wave of bank failures soon?  Do the banksters know something that they aren’t telling us?

chart of the dayAs today’s Chart of the Day (courtesy Bloomberg) demonstrates, on a year-over-year percentage change basis, gold bullion is currently exhibiting the strongest buy signal of the entire bull market, far surpassing the previous buy signals placed in 2005, 2007, and late 2008-early 2009.
Must See year-over-year percent change of gold bullion chart for the duration of the bull market is below:

paper goldWith gold down 40% on the year and on track to place the largest quarterly decline on record for the 2nd quarter, CNBC invited Peter Schiff on to its Hard Money show to ridicule the gold bug about the metal’s historic plunge.
With Schiff making the case that miners will begin shutting down operations and going out of business if the price of gold stays below $1200 long term, the fun begins at the 5:30 mark, when the CNBC host begins bashing blogs that believe in a conspiracy theory that the Fed is manipulating gold, and attempts to make the case that gold is crashing because “how about the fact that it’s darn easy to sell these days because it’s just a piece of paper and a computer transaction.
Jeffrey Christian couldn’t have said it better himself.
Full MUST WATCH piece with Peter Schiff and CNBC attempting to bash gold is below:

JP MorganWith gold breaking below $1200 , legendary gold trader Jim Sinclair has sent an email alert to subscribers advising PM investors that knowing the system is in collapse, he intends to buy gold withevery asset at my disposal today and tomorrow, and I suggest the stout of heart do the same.

Sinclair’s full alert is below:

Following this week’s stunning and repeated collapse in gold and mining equities, I had the chance to reconnect with legendary resource financier and investor, Rick Rule, Chairman of Sprott US Holdings.

Speaking toward what he’s seeing from the institutional investor community, Rick said, “This is the fourth time in my career that I’ve seen capitulation selling, and it get’s ugly and spasmodic…Last week I was on the East Coast of the United States visiting very large institutional investors, and the level of indecision I saw was absolutely classic of the period right before capitulation—and this week, right on schedule, we’re getting it. [It’s] truly ugly, but it’s the kind of cleansing the market needs.”

“I was talking with Eric (Sprott) this morning on the phone, and what he reinforced to me was that he built Sprott from a $10
million manager to a  $10 billion manager, by the aggressive deployment of capital at times like these. 
Eric has always said, ‘Don’t be afraid to be right’. That’s where we are right now…This is the time when the ’A’ players go to war.”

gold bull overSentiment is as bad as we have seen it in the gold market – worse than after the 30% fall in 2008.  However we remain confident that the recent price falls are just a mini bear market within a larger secular gold bull market that will propel prices much higher in the coming months and years.
The recent price falls were not a surprise.  When gold was near $1,900 we said that there was going to be a correction and that in a worst case scenario gold could replicate the 1970s bull market when gold fell nearly 50%.
It is always worth looking at gold’s last bull market in the 1970s when gold rose from $35/oz in 1971 to over $197/oz by January 1975.  In the next 21 months, gold fell in value by nearly 50% to $103/oz by late August 1976.  This led to many pronouncements that gold’s bull market was over and the bubble had burst.
In the next 40 months from August 1976 to January 1980, gold rose 8 fold from nearly $100/oz to $850/ozWe see think there is a real possibility of the same pattern playing out in the coming months.

lights outUnsustainable trends can survive much longer than most people anticipate, but they do end when their “time is up” – at the culmination of their time cycles. Examples of these trends include deficit spending, exponential debt increases, overpriced bond markets, and unbacked paper currencies, to name a few. For perspective on how and when these trends could change direction, we analyzed more than 20 different cycles. They nearly unanimously point to tectonic shifts in the months and years ahead. We have been warned!

At this point, we have enough confirmation to accept that the precious metals crash – starting in April of 2013 – was the first warning of what is coming globally.

Top trends forecaster Gerald Celente says NSA leaker Edward Snowden is a non-event. Celente charges, “What did Snowden say that we didn’t write about over a year ago.”
Celente says the real stories are the imploding economy and coming war. Another crash is coming, and Celente predicts, “It will be worse than the panic of ’08. It will be deeper. It will be more painful because they will not be able to pull off the stimulus game again.” Celente goes on to say, “We are going into the Greatest Depression, but they will try to boost it in some way, and that’s when gold and silver prices will skyrocket.” Celente also predicts war in the Middle East is a lock. Celente says, “When all else fails, they will take us to war. We are seeing war drums beating louder and louder throughout the Middle East as the Middle East is collapsing.” As far as a real recovery is concerned, Celente boldly states, “The business of America has become war, and as long as business is war, there is not going to be any recovery.” Join Greg Hunter as he goes One-on-One with Gerald Celente.

sinclair1This is a mirror of 2008, only the hidden catastrophe coming at us in the global financial system is going to be far worse than what hit in 2008.
It might help to put what’s going on right now into context.   The entire sector is in a massive price correction that is almost a mirror image of the one in 2008.  The percentage drops for gold, silver and the HUI top to bottom are almost identical to the percentage drop of each in 2008.

Whether or not this is the bottom is anyone’s best guess.  But when this sector turns around, all hell will break loose on the upside

COMEX defaultJim Rogers sat down with Tekoa Da Silver Wednesday out of Spain, discussing the smash in precious metals, Fed QE and taper, and the risk of an imminent global financial collapse.
On Gold: “ There are a lot of leveraged players who are now being forced to sell. Usually when you have this kind of forced liquidation, you’re getting closer to a bottom, maybe not the final bottom, but certainly close to a bottom. I even bought a little bit [today].
On QE: It’s going to end sometime in the next year, because this cannot go on—it’s too insane.”
On how to protect yourself from the financial collapse: The way to protect yourself is to own real assets…because that’s the only thing which will protect you as currencies debase.
Rogers’ full interview with Tekoa Da Silva is available below:

The day that silver traders have been waiting for has arrived.  On Wednesday, the price of silver dropped another 5 percent.  As I write this, it is sitting at $18.55 an ounce.  On Wednesday it hit a low that had not been seen in three years.  Overall, the price of silver has declined by 34 percent this quarterThat is the largest quarterly move in the price of silver in more than 30 years.  So what does all of this mean?  It means that we are looking at a historic buying opportunity for those that are interested in silver.  Yes, gold is undervalued right now as well, but it is absolutely ridiculous how low the price of silver is.  At the moment, the price of gold is about 66 times higher than the price of silver is.  But they come out of the ground at about a 9 to 1 ratio, and unlike gold, silver is used up in thousands of common consumer products.  Those that want to invest in silver should be shouting for joy that prices have fallen this low.
If you have been waiting and waiting and waiting to “load the boat”, your moment has arrived.

Physical demand remains robust internationally especially in China and India where premiums are moving higher again.  In China, physical demand remains robust and premiums remain at elevated levels near $35/oz. In India, premiums charged shot to $20 an ounce overnight from $8-$10 on Tuesday.
Gold buyers in India are concerned after the India Gems & Jewellery Trade Federation asked its 42,000 member companies to stop selling gold coins and bars from July 1. The Indian government is believed to have put pressure on the powerful trade group in order to curtail India’s massive demand for gold.

What does it look like when a 30 year bull market ends abruptly?  What happens when bond yields start doing things that they haven’t done in 50 years?
If your answer to those questions involves the word “slaughter”, you are probably on the right track.
Right now, bonds are being absolutely slaughtered, and this is only just the beginning. 

If you could get 70 percent of Americans addicted to your drugs and rake in $280 billion a year in the process, would you do it?  If you could make more money than you ever dreamed possible by turning the American people into the most doped up people in the history of the planet, would you do it?  In America today, the number of people hooked on legal drugs absolutely dwarfs the number of people hooked on illegal drugs.  And sadly, the number of people killed by legal drugs absolutely dwarfs the number of people killed by illegal drugs.  But most Americans assume that if a drug is “legal” that it must be safe.  After all, the big pharmaceutical companies and the federal government would never allow us to take anything that would hurt us, right?  Sadly, the truth is that they don’t really care about us.  They don’t really care that prescription painkillers are some of the most addictive drugs on the entire planet and that they kill more Americans each year than heroin and cocaine combined.  They don’t care that antidepressants are turning tens of millions of Americans into zombies and can significantly increase the chance of suicide.  All the big pharmaceutical companies really care about is making as much money as they possibly can.  The following are 20 signs that the pharmaceutical companies are running a $280 billion money making scam…

srs*Editor note: With silver plunging to an $18 handle and gold knocking on the door of $1200, we thought we would bring back SRSrocco’s satirical analysis of the metals’ outlook from here, as analysts attempt to out-do each other with bearish PM outlooks based on support levels.

Once $1,200 gets taken out… we drop below $1,000 rather quickly.  Once gold falls below $1,000 the next support level is at $250… the level gold started in 2000.
In silver, if all support gets taken out under $5… then we can see silver be given away for free.