- Friday’s non-farm payroll data – and the paper bullion smash
- The Doc recaps wholesale physical market trends as seen by SD Bullion and the massive demand surge as silver broke below $22 Friday
- Cartel finally busts $22 silver; cartel may attempt to smash gold & silver below April lows of $1320 & $20 overnight Sun and into Monday as Chinese financial markets will be closed Monday through Wednesday
- India freaks-out – but gold quotas on imports & tax hikes will fail
- France attempting to block postal shipments of bullion & cash
- Are capital controls coming to a neighborhood near you?
While preparing for this week’s show I’m left with a new-found appreciation for what it must be like writing classic science fiction. The Twilight Zone pales in comparison to what passes for object reality these days. Another non-farm payrolls, another precious metals smash. In a world gone mad, sometimes all you can do is just laugh (Scream? Cry?).
If we had real leaders and not criminals like Bernanke running around like obedient towel boys for the financial oligarchy, perhaps there would be hope. But no, these market distortions are going to end badly and the oligarchs no longer understand what’s in their best interests. They’re more interested in a smash and grab before attempting to abandon ship.
Let’s take a quick look at some key market action. With MOPE in high gear on this Non-Farm Payroll release Friday, “someone” trashed gold on significant volume just before the NFP release. We’ve seen this movie before. Check out this chart published at ZeroHedge today:
Meanwhile, the Dow bounced off its 50-day moving average late in the day Thursday – quite an amazing turnaround, actually. But then, Uncle Ben has equity investors’ backs, right? The bounce primed today’s speculative frenzy, with the Dow leaping 207.5 points or 1.38%.
Wall Street’s explanation? The NFP release exceeded expectations, and equity investors celebrated. But wait, we’re told gold fell because fears of the Fed’s eventual “tapering” given a pick-up in the labor market. Contradiction? Oh, never mind.
While we’re on the subject of the Dow and equities in general, it’s worth reiterating a point we’ve made from time to time that much of the daily volume we see is nothing more than high frequency trading and bots in general. Click here and look at this 13-year chart of the Dow. Volume is now pathetically low. Is it any wonder that we periodically have flash crashes? Computer-driven trading makes up the vast majority of equity market volume today.
Turning our attention to the credit market, all is not well in bond land. US 10-year bond yields leaped a sizable 4.33% higher today. As we pointed out last week, the Fed is starting to lose control of the long-duration end of the bond market and that may very well prove to the undoing of all of these manipulations.
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At this point, let’s cut the crap and state point blank what needs to happen. The Fed and Treasury need to revalue gold to $50,000 overnight – or some other seriously high price. This would devalue all debt against gold rather than the idiocy of trying to devalue paper fiat of various nationalities against each other so as to “soft default” on debt while attempting to high the decline in fiat purchasing power.
There can be no doubt that those at the top know the end game must be revaluation to gold. It’s not like this is some secret. The policy wonk intellectuals that serve the interests of the powers that be openly talk about devaluation against gold as part of the process of moving to a more sane monetary system and global exchange trade system. But the bottom-line is that the oligarchs are too chickenshit to take this step for the time being for fear of setting off a massive implosion in the interest rate swap portion of the grossly bloated derivatives market. That outcome is a very realistic probability, and it would create a deflation crash many times larger than the Great Depression. But the crash outcome is also a very realistic probability if “we” continue to “extend and pretend” and continue on with market and economic data manipulation as public policy.
Western policy makers continue the dog and pony show, lying about nearly EVERYTHING while pumping liquidity at a level that would remain huge even with “tapering.” Meanwhile, Asia gladly takes real wealth in return as China, “bad behaving” Indians (at least the Chinese government understands it’s good for their citizens to own gold) and much of the rest of Asia and the Middle East hoover-up gold and silver at at least 2 times the rate physical is being sold out of Western vaults (including the Comex, LBMA and exchange traded products like GLD).
It’s clear that Western leaders’ strategy has incorporated an understanding that China, in particular, had to be permitted to accumulate gold for a period of time before replacing the worldwide US dollar exchange settlement system. But enough already! It’s not in the best interests of the financial oligarchs to implode the Comex and the LBMA. What the hell are you greedy bastards thinking? That’s the end game if you keep this up and you damn well know it. Not to mention the fact that China is likely going to try to launch a formal Yuan peg to gold far sooner than most believe. Western oligarchs need to get off their butts and figure out a way to contain the risk of a derivatives market crash without dumping everything on policies that will destroy the middle class. It’s time to switch into the mode of thinking about how best to expand the size of the West’s economic pie rather than fighting over the shrinking pieces remaining.
/rant mode off/
Summer is here, for most. It’s certainly hot as heck where I live. I’ll be taking an opportunity to get some fresh air and relaxation. Next week is going to prove to be quite a test. The cartel has been able to bust $22 silver and if we don’t turn around by Tuesday morning, Bernake, Blythe and their merry band of monkeys may very well entice a new round of hedge funds interested in selling into downside momentum. Time will tell.
The hedge funds said “no mas” back on May 20th, following that week’s Sunday evening raid. Since then, the cartel has only been able to range trade silver in a tight band while noticeably – ever so slowly – start to lose it’s grip on gold (but nevertheless vigilant with capping efforts in the $1420 area, plus or minus a few bucks. The trouble for the monkeys is that a growing number of people are wise to this masquerade. The cartel might be able to pull off a few more magic tricks and keep prices artificially managed down. But real demand for real physical continues at a blistering pace and at some point it’s going to overwhelm these monkeys.
Enjoy the weekend! — Eric Dubin
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