HarveyOrgan1

Gold & silver were whacked by the cartel in the access market today as Janet Yellen and the Fed announced QE will end at the end of the month. 
Expect gold and silver to be under the weather for the remainder of the week.
Let’s head immediately to see the major data points for today:

Source: Banzai7

What we saw in 2008 was a massive containment. The mainstream was taken by surprise. I remember watching it all finally unfold, thinking that this was it. Playing out exactly as expected.
The most obvious bubble, housing, was imploding. But something happened that felt strange. The real punishment.
The event that should have ended housing as a financial asset never came.
In the process they have reduced the standard of living for 90% of Americans.
Fed policy tools guarantee that everyone is so inured to their system that when they implode the whole thing to rubble next, no one will have any choice but to be under their centralized world total control system.

Or so THEY think anyway.

panic

Something nasty is going on behind the scenes in the financial system that is not yet apparent.
Treasury futures opened in the early evening and the 10-yr traded down to 2.25%
.
Something has the market incredibly spooked and I find it interesting that the U.S. Treasury Secretary and the UK’s equivalent will be running a big bank fail simulation test next week.
The movement in 10-yr Treasury yields AND the blatant smashing of the gold price since mid-July is exactly what occurred in 2008 before Lehman collapsed.

Is another TBTF mega bank on the brink of insolvency??

Jim Grant

I think this is a time where people will look back on us and see it as a period of practically central bank worship.
The central bankers – Draghi, Yellen, Bernanke – have become almost celebrities in America.  People have invested unreasonable hopes in what these central banks can know, and what they can do.   I think that, sooner or later, the investing public will become disillusioned of these ideas….
I dare say that stock prices will not continue to rise uninterrupted at the same pace.  That’s not a very interesting prediction, but the stock market is certainly a cyclical thing.  I think it’s fair to observe that today’s ultra-low interest rates flatter stock market valuations.  Stock prices are partly valued based on a discounted flow of dividend income.  To the extent that the discount rate you use to value that stream of dividend income, which depends on interest rates, is artificially low,stock prices are artificially high.
I think that the burden of proof is on anyone who would assert that we are in a new age of persistently and steadily rising stock prices.

fed

The collapse of the Soviet Union should have been a lesson. The world should have learned that central planning cannot work, even in something simple like food or iron production. The USSR was plagued with shortages of everything.
America today does not have central planning of simple things like food. Farmers make the allocation decisions for corn, and ranchers determine the size of their herd for the most part.
We have central planning of the most complex thing of all, credit. Credit affects everything else including corn and beef.
It’s not only unstable, but it is moving inexorably towards collapse.   This disaster is way beyond the pay grades of the economists who would be our economic dictators, like Ben Bernanke and Janet Yellen.
The Fed is naught but a whole pile of perceptions.
One way or the other, we are going to rediscover the use of gold as money. When that happens, the perceptions that prop up the Fed will be dispelled.   Strip those away, and there is no case for the Fed to exist at all.

fed goldman

For years, many people have suspected that the New York Fed is more or less controlled by the “too big to fail” banks.  Well, we now have smoking gun evidence that this is indeed the case…

swan end

Precious metal investors have long been second-guessing themselves, due to false alarms. Many, many false alarms.  They are, quite honestly, shell-shocked.  Even the mention of the next “event”, now simply makes them angry, both at those telling them about the importance of the events, and at themselves for “believing this stuff in the first place”.
They feel jaded.  They feel foolish.  They feel betrayed.
While I totally understand and empathize with those feelings, they’re forgetting to set that anger in the rightful place: right at the feet of the board of directors of the Federal Reserve.  They are failing to channel and harness that anger and outrage, and use it for something positive, like stacking.
The thought never occurs to many of them, that if they simply put even a little bit more into gold or silver at 30% and 65% discounts, respectively (from their highs 3 years ago), that their investment cost in those metals would take a dramatic plunge.  They fail to see that they could become much stronger hands than they are now.  None of that matters to them anymore, they’re tired of “being played”, by their emotions, and by “shysters”.
In fact, for many of them, stacking is now the last thing on their minds.  Many are now simply waiting for the next miraculous rally, so that they can mercifully dump those positions at the prices they bought them at.  Many will sadly do this too, just as the Bird lands, and the Great Flood washes everything else away.
The Black Swan is real, and it is coming, just don’t bother looking for it.

gold vault

On November 30th, voters in Switzerland will head to the polls to vote in a referendum on gold.
On the ballot is a measure to prohibit the Swiss National Bank (SNB) from further gold sales, to repatriate Swiss-owned gold to Switzerland, and to mandate that gold make up at least 20 percent of the SNB’s assets.
Arising from popular sentiment similar to movements in the United States, Germany, and the Netherlands, this referendum is an attempt to bring more oversight and accountability to the SNB, Switzerland’s central bank.
Will the Swiss throw a wrench into Western Central Banks’ plans by voting to get their gold back??

yellen
  • Yellen lays out Federal Reserve’s plans to “normalize” monetary policy
  • Fed to officially DC QE at next meeting if economic outlook holds
  • “Normalization” will not necessarily occur immediately 
  • Fed will use an overnight repo facility as needed during normalization process
  • Fed may raise interest rates as early as 2015
  • Committee is prepared to adjust its approach if necessary (translation- we’re going to try to pull the punchbowl, but we’ll eventually bring back MOAR QE )
  • Gold & silver smash commences on que as gold sent down a mineshaft below support at $1230

Full FOMC statement is below: 

gold bull

The average gold bear already looks a bit like the wolf character from the fairy tale, “The Three Little Pigs”.
The wolf repeatedly blows hot bearish analysis air at the gold brick house, and the house just stands there, immovable.

I’ve predicted that Queen Bankster Janet” will begin raising rates by mid-year of 2015, and that’s bullish for gold.
Here’s why: 

panic crash

The Federal Reserve’s third quantitative-easing campaign is on track to wind down in late October.  At that point the Fed will likely stop printing new money to buy bonds, a sea-change shift with ominous implications for the stock markets.  Their entire surreal levitation during QE3 mirrored the huge growth in the Fed’s balance sheet from QE3’s bond monetizations.  When they cease, another major selloff is likely.
Prudent investors and speculators today don’t have to guess about what the end of QE3 means for the lofty Fed-inflated US stock markets.  We have the precedent of the ends of QE1 and QE2.  This next chart looks at the flagship S&P 500 stock index superimposed over the Fed’s balance sheet.
And out of all the many thousands of charts I’ve created over the years, this probably tops the heap as the scariest.

Fed

The CEO of RBC Wealth Management – the biggest financial institution in Canada recently stated on Bloomberg that “Canada is what Switzerland was 20 years ago, and the banks in Canada are what Swiss banks were 20 years ago.”. Now, anytime we see central bankers slapping each other on the back, we’re going to be skeptical.  As it turns out, Banque du Canada is actually the most pitifully capitalized central bank in the western world.  They’re in such bad shape they actually make the Fed look healthy.
Hong Kong’s Monetary Authority Exchange Fund is a good example of a strong balance sheet; their latest figures as of 30 June show a whopping capital reserve equal to nearly 22% of total assets. This is a massive margin of safety for the central bank. The US Federal Reserve, on the other hand, shows a capital reserve of just 1.27%.
And Canada?  A tiny 0.47%… as in less than one half of one percent.  This isn’t safety and stability. It’s a rounding error.

gold market tipping

The United States, and every country, is subject to a monetary authority and legal tender laws. Here in the U.S. we have the Federal Reserve, a central bank that plans money and credit. The Fed thought they had perfected their planning (but of course it cannot be perfected). They thought they had ended the boom and bust cycle, and brought us into a brave new era, their so-called great moderation that ended in 2008.   All they really did was manage the banking system to the brink of insolvency.
Although there are other factors that contribute to this dismal reality including minimum wage and labor law, taxes, environmentalism, subsidies for crony companies, and regulations, the artificially enhanced credit gradient deserves the lion’s share of the blame: