Recently we were again witness to three gold market takedowns. The first was engineered just prior to and into gold and silver options expiration. Then prior to the ETF GLD gold option expiry and the last manipulative attack commenced just prior to the dreadful unemployment housing and inventory statistics. This sort of action began in 1988 with the signing of the Executive Order by President Ronald Reagan entitled the Presidentâs Working Group on Financial Markets,â ostensibly created to neutralize events such as the October 1987 collapse of the US stock market. Needless to say, that was not the real intention of the creation of such an order. As it has turned out the Treasury and the N.Y. Fed manipulates markets 24/7 worldwide, and they have a particular interest in the suppression of gold and silver prices; they being the antitheist of the US dollar. It should be noted that there were several times that the US Treasury and the privately owned Fed man ipulated gold and silver prior to August 1988. We have found in 50 plus years of tracing this manipulative activity by the US government that it happens over and over again. There is no doubt in our minds that a great deal of what is done by government in gold and silver is done by the commercials, who privy to inside information go along for the ride. In the options operation prices are driven down for Comex options as well as GLD options, so that they expire out of the money and as well the perpetrators can cover some of their short positions. This is not difficult to execute, because other traders see what is going on and they get involved as well making the tasks easier.
This spring Andrew Maguire went public with a scam being pulled by JPMorgan Chase in the rigging of silver futures on the LBMA, an exchange similar to Comex in London. This caper was explained to the CFTC, Commodity Futures Trading Commission, months ahead of it occurring and they chose to do noth ing about it. Making matters worse, when confronted with the evidence in public hearings, the CFTC didnât want to hear about it. Maguire broke the story to others who confronted the CFTC who received lip service. The CFTC was forced to conduct a civil investigation and the Justice Department as well is conducting a criminal investigation, which we believe will go nowhere. Realizing that the CFTC, Justice, Morgan and the government are working together against the public in this matter, we are told by our sources that class action suits are being prepared and that the first one should be filed soon. It is a sad day for Americans when justice has to be forced from a corrupt government. In the end we will win but it will be a painful process.
We have found it interesting that the IMF prohibits members from tying their currencies to gold. All of you out there who believe the IMFâs, SDRs, Special Drawing Rights, will be gold backed are mistaken. This historical operati ng position was further proven when on August 15, 1971 the US closed the gold window. This was the advice Mr. Nixon received from Paul Volcker, who was an early member of the Trilateral Commission and is an Illuminist. Volcker has also been a leader against the US using gold in its monetary policy. Since 8/15/71 there has been an official war against gold by the elitists behind the curtain. It was that seminal event that essentially changed the future of America and the world. At that time US debt was just short of $500 billion. Today short-term debt is $14 trillion and long-term debt is $105 trillion. The engineer of the failure of the US banking system and the failure of the dollar and the rejection of it is at the feet of Mr. Volcker. What he has done to America at the behest of his Illuminist masters is reprehensible. That was eventually followed by the elimination of Glass Steagall and the looting and the collapse of our financial system. This is the result of the corru ption of our system.
The result of this treachery is the coming with the complete collapse of the stock market and the end of real estate as an investment. The powers that be have destroyed a once great nation. Everywhere you look, budgets of towns, cities, counties, states and governments are in a shambles. The entire world is becoming their world. You have no doubt seen the elitistsâ answer, which is we all switch to the SDR, another fiat currency, devalue all currencies versus the SDR and allow defaults among nations, just as we predicted would happen, although not in this particular way. The solutions being proffered are not solutions at all, only different methods of paying back the bankers and keeping them in business.
That keeps the leaders of the system solvent and throws the debt on the citizen. Mind you, these same bankers were the ones who destroyed our system â" or better yet their system â" in order to bring about world government. It should not be surprising that gold has been the investment leader.
The Illuminist bankers believe this time they are capable of shutting down the entire system and replacing it with S.D.R.s, so that they can control everything financial worldwide. This is what we have been telling the public for over 50 years and no one wanted to listen. We were called conspiracy theorists. We were dead on correct. The SDR is a stepping-stone to a world currency that can never work. Just look at the horrible results of the unnatural euro. The hunger for power, time after time, makes the rich and powerful become even more insane than they already are. G-8 is now G-20, part of the formation of amalgamation and the recognition of the failure of the euro and the EU as well. We find it ludicrous that the elitists want a broke IMF to fix the monetary system with an SDR. The same IMF that said they would never sell gold into the open market, yet that is what they are doing every day. Their plan is to back the SDR with taxes obtained from world citizens and a carbon tax. That is what the BP oil episode is all about. Donât expect a gold or silver based currency, because that inhibits the bankersâ ability to own and run the system that has made them so rich and powerful. Sound money is something they never want to see again.
The idea of a Northern euro we believe is undoable. If the big debtors have to pay back their debt theyâll be in depression for 30 years. If they default they can return to their cheap domestic currencies, which would make their exports competitive. That Northern Union creditor group would be stuck with $2 trillion in bad paper. In addition we are very skeptical as to whether they have any gold left and if they do how much to back a new currency. The ECB probably sold off enough gold to suppress the gold price leaving the central bank with probably only 7% of the 15% they originally had. The ECB has the same situation that the Fed has, t hey are enveloped in debt - much of it sovereign debt. England and others have the same problem. The ECB continues to buy junk bonds because it has no choice but to do so.
These financial and economic matters are very perplexing and social and political issues complicate them. The theory of corporatist fascism, that is so prevalent in America today, has spawned an economic policy of centralism, debt and monopoly driven by the privately owned Federal Reserve, banking and Wall Street. The tune is borrow and go deeper into debt to the bankers until America is bankrupt. This last chapter will be kicked off with more taxes and more fiscal debt. This will be accompanie4d by massive unemployment and eventually a deflationary depression. The unemployment problem is being deliberately allowed to worsen both by the administration and Congress, which wonât address the real reasons our nation is in such a state of failure. What else can you call the loss of 5 million jobs fro m free trade, globalization, offshoring and outsourcing, which is still going on and the loss of 8.4 million via recession/depression. That is 13.4 million jobs supposedly being filled by a birth/death model and service and retail jobs with little remuneration. Those who control our government, politicians and our economy are about to kick Americans when they are down. Those who control government and their emissaries loathe capitalism and love collectivism. The average American so disgusts our controllers that, if they could they would remove 80% from society.
This has nothing to do with the fabricated left, right paradigm. This is straight forward dictatorship controlled from Wall Street. The president and most of Congress are pliable socialists only intent on enriching themselves. Today we have the centrally planned fascist variety. All finance, production and quality of good will be decided by executive fiat and commercial monopoly. It will be as the Marxists sai d it will be, each according to their ability and each according to his means. That means centralized management of everything including people. Everything will be done in the public interest, which in fact is by corporate interest. Risk taking will cease to be, and our economy will resemble those of FDR, Juan Peron, Adolph Hitler and Benito Mussolini. Everything that was fascist in the past was an economic and financial failure. The 1930s and 40s were an experiment, a trail run for what we have today. Two stimulus packages and trillions of dollars later few new permanent jobs have been created and all the subsidized money and credit has been transferred via debt from the people to corporate America to bail it out. This is part of the world of in reality. These people count on the publicâs ignorance to pull these scams and impose tyranny. You should be doing something about that.
Last week was a telling one for the Dow, which fell 4.5%, S&P fell 5%, the Russell 2000 7.2% and the Nasdaq 100 6.09%. All technical barriers to the downside were broken. Cyclicals fell 8.1%; transports 7.2%; consumers 3.4%; utilities 2.2%; banks 8.6%; broker/dealers 7.8%; high tech 5.2%; semis 5.8%; Internets 6.2% and biotechs 6.8%. Gold bullion fell $44, the HUI 8.1% and the USDX fell 1.1% to 84.41 and the latter appears to be breaking down in its head and shoulders formation.
Two-year T-bills fell 1 bps to 0.59%; the 10-year notes fell 7 bps to 1.76% and the 10-year German bund fell 3 bps to 2.98%.
As housing sales both new and existing fell, Freddie Macâs 30-year fixed rate mortgage fell 11 bps to 4.58%; the 15âs fell 9 bps to 4.04%; the one-year ARMs rose 3 bps to 3.80% and the 30-year fixed rate jumbo fell 2 bps to 5.50%. The massive inventory overhand continues to put downward pressure on the market and the resumption of falling prices should soon begin.
Fed credit declined $11.9 billion to $2,316 trillion. It is up 8.7% ann ualized and 16.6% YOY. Fed foreign holdings of Treasuries and Agencies increased $7.8 billion to a new record of $3.098 trillion. Custody holdings for foreign central banks have increased $142 billion YTD and 12% YOY.
M2, narrow, money supply rose $23.6 billion to $8.588 trillion YTD, it is up 1.9% and YOY 1.6%.
Total money market fund assets fell $5.6 billion to $2.812 trillion, YTD funds have fallen $481 billion. YOY it has fallen $851 billion, or 22.3%.
Total commercial paper was unchanged at $1.099 trillion. CP has declined $71.4 billion, or 12.2% annualized YTD, and was down $38 billion YOY, or 3.3%.
The post office wants to increase the price of a stamp by 2 cents to 46 cents starting in January. The agency has been battered by massive losses and declining mail volume and faces a financial crisis.
Postal officials announced a wide-ranging series of proposed price increases Tuesday, averaging about 5 percent, and covering first cl ass, advertising mail, periodicals, packages and other services.
The request now goes to the independent Postal Rate Commission, which has 90 days to respond. If approved, the increase would take effect Jan. 2.
"The Postal Service faces a serious risk of financial insolvency," postal vice president Stephen M. Kearney said.
Kearney said the agency is facing a $7 billion loss in 2011. The rate increase will bring in an extra $2.5 billion, meaning it still faces a $4.7 billion loss.
The rate increase is part of a series of money-saving plans announced in March. These also include reducing mail deliveries to five days a week, closing offices and making other cuts in expenses. Congress must agree to eliminating deliveries on Saturdays.
Concern governments around the world are curtailing stimulus measures too soon spurred Barton Biggs to sell about half of his stock investments this week. Biggs, whose Traxis Partners LLC gained 38 percent in 2009 when he bought equities after the Standard & Poorâs 500 Index fell to a 12-year low, sold most of his U.S. technology holdings, he told Bloomberg Television yesterday.
Signs the U.S. economy is weakening convinced Traxis to reverse course as the S&P 500 posted a weekly slump of 5 percent, bringing its loss since April 23 to 16 percent. Biggs, 77, said yesterday he cut bullish bets by about half since June 29, when they made up 70 percent of his fund.
âI can change my mind very quickly,â Biggs, who manages $1.4 billion, said in a telephone interview following the Bloomberg Television appearance. âIâm not wildly bearish, but I donât want to have a lot of risk at this point. I just want to have less exposure at a time like this.â
The withdrawal of government stimulus, including the U.S. Senateâs vote against extending unemployment benefits on June 30, may turn a âsoft patchâ into a recession, he said. The second recessio n in three years isnât inevitable should ârational politiciansâ take action to avert it, he said.
Stocks in the U.S. have fallen nine times in 10 days, including yesterday when data on jobs and factory orders added to concern the economic rebound is slowing. On Bloomberg Television, Biggs said âpolicy mistakesâ could curb the U.S. expansion in gross domestic product thatâs forecast by economists to be 3.2 percent in 2010.
President Barack Obama today announced $1.85 billion in loan guarantees to Abengoa SAâs Abengoa Solar unit and Abound Solar Inc. to build sun-powered facilities in the U.S. that he said will create thousands of new jobs.
In his weekly address on the radio and Internet, Obama said the money from the Department of Energy will help the U.S. transition to a âclean energy economyâ that creates hundreds of thousands of jobs in the future.
âWeâre going to keep competing aggressively to make sure the jobs and i ndustries of the future are taking root right here in America,â Obama said.
The loan guarantees will come from money in the $862 billion economic stimulus program enacted early last year. Obama announced the funding the day after government figures showed private employers adding fewer workers than forecast in June, reinforcing concerns the economic recovery will weaken.
âThe recession from which weâre emerging has left us in a hole thatâs about 8 million jobs deep,â Obama said. âAnd as Iâve said from the day I took office, itâs going to take months, even years, to dig our way out.â
Abengoa Solar, a unit of the Seville, Spain-based engineering company, will receive a $1.45 billion loan guarantee to build a solar-power plant in Arizona that will create 1,600 construction jobs and 85 permanent jobs, according to White House documents released in conjunction with Obamaâs address.
The power plant will be the first of its kind i n the U.S. and generate enough energy to power 70,000 homes, Obama said. [The same program was used in Spain and it was a total failure. The street hustler from Chicago is blowing smoke.]
Federal Reserve Chairman Ben S. Bernanke and then-New York Fed President Timothy Geithner told senators on April 3, 2008, that the tens of billions of dollars in âassetsâ the government agreed to purchase in the rescue of Bear Stearns Cos. were âinvestment-grade.â They didnât share everything the Fed knew about the money.
The so-called assets included collateralized debt obligations and mortgage-backed bonds with names like HG-Coll Ltd. 2007-1A that were so distressed, more than $40 million already had been reduced to less than investment-grade by the time the central bankers testified. The government also became the owner of $16 billion of credit-default swaps, and taxpayers wound up guaranteeing high-yield, high-risk junk bonds.
By using its balance sheet t o protect an investment bank against failure, the Fed took on the most credit risk in its 96- year history and increased the chance that Americans would be on the hook for billions of dollars as the central bank began insuring Wall Street firms against collapse. The Fedâs secrecy spurred legislation that will require government audits of the Fed bailouts and force the central bank to reveal recipients of emergency credit. [As you can see it is the duty of Mr. Bernanke as chairman of the Fed to lie about everything to the American public. This is why the Fed does not want to be audited. In the absence of an explanation we have to assume the bonds and swaps were purchased at par and are now probably worth 20 cents on the dollar.]
Once again and with greater force, Europe has snubbed its nose (and rightfully so) the Keynesian clowns in US academia and the Obama administration. Bloomberg reports Trichet Calls on EU Governments to Reduce Budget Deficits to Boost Grow th.
Â European Central Bank President Jean- Claude Trichet pressed governments to trim their budget deficits, saying such action would boost economic growth by improving confidence of consumers and investors. âWe are in a period where we have to manage budgets very tightly,â Trichet told journalists in Aix-en-Provence, France. âI have no problem with austerity, rigor. I call this good budgetary management.â Trichet said today that deficit reduction wonât choke growth and a failure to stem budget gaps would be equally risky for the recovery. âConfidence is key for growth, and if you cannot have confidence in the sustainability of the fiscal policies then you have no growth because you have no confidence,â he said. âThe two things are complimentary.â
Â Germany to Reduce Deficit by 80 billion euros ($100 billion) over five years Reuters reports Germany plans to cut new borrowing in savings drive.
Â Germany plans to cut net new borrowing by some 80 billion euros ($100 billion) over five years, reducing supply of Europe's benchmark debt and adding pressure on other euro zone members to tighten their own public finances. The draft budget for 2011, which the cabinet plans to approve on Wednesday for ratification in parliament in November, will anchor a 34 billion euro reduction in new issuance over the next two years compared to earlier plans. The federal government also aims to cut spending to 307.4 billion euros next year, a 3.8-percent decrease from plans made before a "debt brake" law was passed in 2009, details of the draft made available to Reuters on Sunday showed. The budget is the latest chapter in Germany's drive to consolidate public finances, a move that has drawn criticism from some other large countries that say it is too early to withdraw support enacted during the financial crisis. Unions have promised stiff resistance and industrial action looks likely -- a threat that could rise as cuts in socia l services deepen and health care costs rise as planned. In addition, some politicians from within Merkel's ruling coalition say the measures are unfairly aimed at the poor, whose benefit cuts make up the largest part of the savings planned through 2014. Besides the spending cuts, the budget's planned reduction in new borrowing to 65.2 billion euros this year and 57.5 billion euros in 2011 will put the onus on other countries that share the euro currency to follow suit.
Subscribe to The International Forecaster
Subscribe to the complete issue of The International Forecaster for timely and in depth coverage of the Economy and world economic events. Published twice weekly.