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gold bottomOn the latest SD Weekly Metals & Markets Wrap The Doc & Eric Dubin discuss:

  • The Taper and MOPE manipulation undertaken to introduce it
  • Gold breaks below $1200, silver holds at $19- why The Doc believes the metals will bottom by 12/31
  • Bloomberg’s admission: London gold vaults drainedThe SD Weekly Metals & Markets Wrap with The Doc & Eric Dubin is below:

BernankeThe Fed showed through its FOMC statement Wednesday it has little control over events, something that should dawn on markets in the coming days.  The fed attempts to offset the deflationary implications of tapering by increasing its commitment to zero interest rate policy (ZIRP) and for longer. We are left wondering how long it will be before this contradiction is generally understood.
It is not just precious metals that are mispriced. Government bond yields, particularly for the weaker eurozone states do not reflect credit risk. Equity markets are priced on the back of ZIRP. Fixed assets, particularly housing and motor vehicles are being financed on the back of this unreality. The important point is not tapering, but that ZIRP continues indefinitely.

The unelected central planners at the Federal Reserve have decided that the time has come to slightly taper the amount of quantitative easing that it has been doing.  On Wednesday, the Fed announced that monthly purchases of U.S. Treasury bonds will be reduced from $45 billion to $40 billion, and monthly purchases of mortgage-backed securities will be reduced from $35 billion to $30 billion.  When this news came out, it sent shock-waves through financial markets all over the planet.  But the truth is that not that much has really changed.  The Federal Reserve will still be recklessly creating gigantic mountains of new money out of thin air and massively intervening in the financial marketplace.  It will just be slightly less than before.  However, this very well could represent a very important psychological turning point for investors.  It is a signal that “the party is starting to end” and that the great bull market of the past four years is drawing to a close.  So what is all of this going to mean for average Americans?  The following are 8 ways that “the taper” is going to affect you and your family…

Since the adoption of a private banking, money creation venture, the dollar has lost virtually its entire store of value. The currency has lost its universal acceptance, as multiple alternatives circulate to replace its reserve status.
This failure to maintain and preserve the integrity of the dollar is no accident. The actual purpose of the architects of the Federal Reserve System has never changed. Consolidate the control of money into a concealed cartel of banking houses that ultimately decide economic and political policy.
For the rest of Americans, the Federal Reserve conspiracy is an ongoing theft syndicate. It only takes the will to admit the undeniable. Without the courage to abolish this usury monster, the next century will witness the total destruction of the country.

  • freefallFed tapers QE to $75 billion/month beginning in Jan!
  • Bernanke threatens further tapering: `Fed is likely to further the reduction of asset purchases at each future meeting!’
  • As expected, gold & silver smashed on the release, already rebounding to pre-FOMC levels as a $10 billion taper appears to have been fully priced in
  • 10 year spiking towards 3%

Full December FOMC statement is below:

Fed monkeyAhead of the Fed’s December FOMC statement, The Interest Rate Observer’s Jim Grant was on CNBC today debating the effectiveness of the Fed & Bernanke’s QE policy with bankster apologist Steve LIESman.

The Fed has embarked on a dangerous course of monetary manipulation. You’ve said there is no inflation. How about on Wall St.? How about in stocks, bonds, art, Ferraris and farmland? The asset holding portion of the community thinks this is great. You think its great. It is NOT GREAT! The Fed can change how things look, it cannot change what things are!
Grant’s MUST WATCH schooling of Steve Liesman & the CNBC crew on the dangers of the Fed is below:

Source: Banzai7

Source: Banzai7

Taper or No Taper?  Will the cartel attempt to smash gold & silver below the June 28th lows of $1179 and $18?
SDLive debuts as an Open Interactive Thread for SD readers to discuss the day’s events, Bernanke’s last FOMC Press Conference, and the reaction of the markets.
The Doc, Eric Dubin, and AGXIIK will be covering the news and chatting live from 1:30-3pm EST!

Taper/No Taper Open Thread-your chance to interact directly with The Doc, Eric Dubin, & AGXIIK!
http://www.silverdoctors.com/live/

There is inevitable speculation that tapering might be announced at the FOMC meeting this Wednesday. It should be noted that this is Ben Bernanke’s swansong, and if tapering is to be announced he would probably go out with falling bond markets, falling equities and a soaring dollar, not to mention disruption of emerging market currencies such as the Indian rupee. For this reason perhaps opinion is odds-against tapering, but it doesn’t stop markets being nervous ahead of the event.

The Federal Reserve’s balance sheet is set to exceed a whopping $4 trillion today, prompting warnings its ultra loose monetary policies are inflating asset price bubbles and will lead to a devaluation of the dollar and significant inflation in the coming years.
The Fed’s assets rose to a record $3.99 trillion on December 11, up from $2.82 trillion in September 2012, when it embarked on a third round of bond buying. It’s balance sheet has ballooned by more than $3 trillion or 300% since September 2008 when it was at just $0.91 trillion.
The deterioration in the balance sheet of the Fed and most central banks in the world bodes well for gold prices in 2014.

fedA week from now, the Federal Reserve System will celebrate the 100th anniversary of its founding
We are reaping the noxious effects of a century of loose monetary policy, as our economy remains mired in mediocrity and utterly dependent on a stream of easy money from the central bank. A century ago, politicians failed to understand that the financial panics of the 19th century were caused by collusion between government and the banking sector. The government’s growing monopoly on money creation, high barriers to entry into banking to protect politically favored incumbents, and favored treatment for government debt combined to create a rickety, panic-prone banking system. Had legislators known then what we know now, we could hope that they never would have established the Federal Reserve System.
Today, however, we do know better. We know that the Federal Reserve continues to strengthen the collusion between banks and politicians. We know that the Fed’s inflationary monetary policy continues to reap profits for Wall Street while impoverishing Main Street. And we know that the current monetary regime is teetering on a precipice.
One hundred years is long enough. End the Fed.

Bernanke taper“The first panacea for a mismanaged nation is inflation of the currency: the second is war. Both bring temporary prosperity; both bring a permanent ruin. But both are the refuge of political and economic opportunists.”   – Ernest Hemingway

Continuing QE is aimed mainly at propping up the Mega-Banks, but also is destroying the US$ as the World’s Reserve Currency.

A “No Tapering This Month” Decision some week soon may well be the Catalyst which launches Gold and Silver up, finally, into their Great Rally. Be prepared.

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Greatest Juggling Act On Earth - WilliamBanzai7 In this week’s SD Weekly Metals & Markets The Doc & Eric Dubin discuss:

No taper next week, but expect jawboning and an attempt to smash gold & silver– will June’s lows hold?
– The Doc, Eric, & AGXIIK to host a live chat event @ The News Doctors Wednesday for the FOMC statement
– Precious metals trading this week- raid fails to break gold & silver below $1200 and $19
– The Doc’s report on retail physical trends as US Mint shuts down for 6 weeks
– The stock market and 2014- Why the Fed’s actions to attempt to taper QE in 2014 will precipitate a stock crash & the brown stuff exploding off the fan between late 2014 and 2016

The SD Weekly Metals & Markets Wrap is below:

falling-bearWhen QE1 ended there was a substantial stock market correction, and when QE2 ended there was a substantial stock market correction.  And if you will remember, the financial markets threw a massive hissy fit a few months ago when Federal Reserve Chairman Ben Bernanke suggested that the Fed may soon start tapering QE3.  Clearly Wall Street does not like it when their supply of monetary heroin is interrupted.  The Federal Reserve has tricked the American people into supporting quantitative easing by insisting that it is about “stimulating the economy”, but that has turned out to be a massive hoax.
So what is going to happen when the Fed starts pulling back the monetary crack and the bubble bursts?

FedRudolph von Havenstein was head of the German Central Bank during the infamous Weimar hyperinflation/currency collapse period (1921 – 1923).  As most of you know, every German who had their wealth denominated in German marks on the night of November 13, 1923 woke up the next day to discover that their paper wealth was worthless.  Gold, for all intents and purposes, went to infinity as measured in the German mark (gold began the Weimar Republic period at 170 marks and peaked at 87 trillion marks). 
I mention this as background because, despite the Fed’s lip service to the contrary about reducing QE (the “taper”), the Fed has no choice to not only continue printing money, but will soon be forced to increase its rate of printing.  Make no mistake, this is going to get crazy and they will probably eventually start buying assets other than Treasuries and mortgages, such as municipal bonds, pension liabilities and equities.

One of the frustrating elements for traders since the 2008 credit crisis slashed value is the way markets have traded and reacted to fundamental news. There were no trends, just a constant risk-on/risk-off world where opportunity gave way to fear and fear to opportunity, not so much based on the analysis of market fundamentals but on how the Federal Reserve and other central banks would manage the so-called “new normal.”

BernankeMONEY FOR NOTHING is a feature-length documentary about the Federal Reserve – made by a Team of AFI, Sundance, and Academy Award winners – that seeks to unveil America’s central bank and its impact on our economy and our society.
Current and former top economists, financial historians, and investors and traders provide unprecedented access and take viewers behind the curtain to debate the future of the world’s most powerful financial institution.
Digging beneath the surface of the 2008 crisis, Money For Nothing is the first film to ask why so many facets of our financial system seemed to self-destruct at the same time. For many economists and senior Fed officials, the answer is clear: the same Fed that put out 2008’s raging financial fire actually helped light the match years before.
As the global financial system continues to falter, the Federal Reserve finds itself at a crossroads. The choices it makes will greatly influence the kind of world our children and grandchildren inherit. How can the Federal Reserve steer our nation toward a more sustainable path? How can the American people – who the Fed was created to serve – influence an institution whose inner workings they may not understand?
The key tenet underlying Money For Nothing is the belief that a more fully and accurately informed public will promote greater accountability and more effective policies from our central bank – no matter the conclusions any individual draws from the film.

BernankeTwo days before the Janet Yellen confirmation hearings, Andrew Huszar, an ex-Fed official, publicly apologized to the American people for his role in QE. Mr. Huszar called QE “the greatest backdoor Wall Street bailout of all time.”
As recently as five years ago, it would have been unheard of for a Wall Street insider and former Fed official to speak so bluntly about how the Fed acts as a reverse Robin Hood. But a quick glance at the latest unemployment numbers shows that QE is not benefiting the average American. It is increasingly obvious that the Fed’s post-2008 policies of bailouts, money printing, and bond buying benefited the big banks and the politically-connected investment firms. QE is such a blatant example of crony capitalism that it makes Solyndra look like a shining example of a pure free market!

Bernanke-Dimon-Fed-TunnelZerohedge recently drew attention to the growing level of foreign bank cash deposits, tucked away at the bottom of the Fed’s H.8 statement.
Foreign banks’ cash balances have increased by $518.7bn since September 2012, accounting for almost all of the increase in these banks’ total assets in the H.8 table. The implication is that these cash balances are held as reserves on the Fed’s balance sheet, the counterpart of quantitative easing.
This naturally raises the reasonable question posed by Zerohedge as to why the Fed appears to be benefiting foreign banks with QE.
The answer is either these deposits have been transferred to them from US banks in the normal course of business or the Fed is prepared to provide liquidity to foreign banks: after all the US dollar is the reserve currency. And this liquidity is most needed by the weakest banks in the international banking system, many of which are in the euro-zone.

Bernanke QEFinancial analyst and trader Gregory Mannarino says, There will be no Fed taper . . . the Fed is the $85 billion a month gorilla in the room, and this will be increased sooner than later.”  Mannarino contends, “The Fed will not allow the dollar to be strong . . . They have no recourse.
There is no recovery here in the United States.  There is no economic recovery over in Europe.  The central banks are going to attempt to print more in greater amounts to keep this propped up.”   
Mannarino goes on to say, They’ve already lost control here.  We’re just watching a slow motion train wreck come apart.”  Mannarino steadfastly recommends putting some money in physical gold and silver.  To his critics, Mannarino says, I think people are missing the big picture . . .  keep dollar cost averaging until the cows come home   Obama Care will be “awful” for the economy, and Mannarino points out, This will be a wealth transfer.  It’s that simple.  They want young healthy people to subsidize the older sick ones.”  Mannarino goes on to predict, “This is going to kill jobs beyond a shadow of a doubt.  It is going to steal money that could be put into the economy.” 

Ron Paul goldPeter Schiff joined our friend Sean from the SGTReport over the weekend to discuss the Federal Reserve, the impending collapse of the United States, and all things Obamacare.
As for the Fed’s recent announcement that QE will continue unabated Peter says, “The Fed will keep blowing air into the bubble until it bursts and the only thing that will stop them is a currency crisis… The Fed has to maintain the illusion and the only way to do that is with the drug of QE.”
On Obamacare and government entitlements Peter says, “We once had a great free market economy that was the envy of the world. People were coming here from all over the world to participate in FREEDOM. We had limited government and maximum prosperity. Even though we had no government benefits at all, the poor people from all over the world wanted to come here. Why did so many poor people want to come to a country with no welfare benefits, no medicare and no food stamps? Because they knew that the best way to get out of poverty was the OPPORTUNITY to work in a FREE MARKET… We had a great country and we screwed it up.

  • Fed continues monthly asset purchases of $85 billion/month
  • ZIRP to continue as long as the unemployment rate remains above 6-1/2 percent
  • Fed stands ready to INCREASE or decrease QE
  • Gold and silver waterfall-smash in progress

Full FOMC statement is below: