There is no shortage of scandals in Washington DC, New York, and London; and, there is an excess of monetary heroin, Quantitative Easing, in Europe, the UK, Japan, the USA, and elsewhere. (When will they ever learn?)
The S&P 500 is hitting new highs, and gold and silver are sitting roughly at two-year lows. Strange and stranger every day…
What should we make of it? Let’s ask the really intelligent old guys who have seen it all.
Richard Russell on May 17, 2013:
“The CPI is manipulated, and I believe gold is being manipulated as well. The Fed’s QE4ever is inflating everything — school tuition, haircuts, food, gas, insurance, medicine. They’ve already “rearranged” the CPI, so what’s left for them to do to keep us from knowing about inflation? Oh yes, it’s gold, so c’mon, Bernanke, keep the lid on gold. Slam it in after-market trading in the thin paper-gold markets of the night.
I promise you, when the true forces of inflation finally break loose, the Fed won’t be able to disguise what they’ve wrought. When the true forces break out — it will be a national disgrace and an emergency. ‘Then you will know the truth, and the truth will set you free.’ The rest of this year should be something to behold.”
David Schectman on May 21, 2013:
“I have run into trouble lately because I rely on logic, honest data and have realistic expectations – but this information is not performing as expected in the gold and silver market because they are totally contrived and manipulated. Yes, they are manipulated, without one iota of doubt. The regulators ignore the facts, and the media is mega-bearish on gold and silver. In this environment, winning the game and being right take a (short-term) back seat to the whims of JPMorgan and the Fed. For now, until the PHYSICAL off-take turns things around, or JPMorgan decides to let the prices fly, the fundamentals will be ignored. The stock market will continue to rise; QE will keep us at near-zero interest rates; a strong dollar (which is a joke with near-zero interest rates and a trillion a year in QE money creation) will hold; and there will be continued pressure on gold and silver, which will not be allowed to rapidly return to pre-April levels.
The truth is the lower the price goes, the stronger the buying gets – from the Chinese, Indians and Russians. At the same time, the large Commercials, especially JPMorgan, are getting longer and longer and they can’t bank these potential profits until the metals change course and start to rise. Believe me; it is very bullish that the Commercials are long gold and silver. They are rarely ever on the wrong side of the trade.”
Jim Rogers to MoneyNews on May 19, 2013:
“Right now, we have a very artificial situation. You have the central bank in America printing staggering amounts of money,” he tells Newsmax TV in an exclusive interview.
“There’s this gigantic artificial flow of money floating into our economy, and this is going to end badly because it is artificial.”
“It seems that Mr. Bernanke may be leaving in a few months,” Rogers says. “I guess he wants to get out before he has to deal with the hangover or the aftermath.” Bernanke’s term ends Jan. 31, 2014, and the consensus opinion is that he doesn’t want to serve another.
But as far as the Fed’s easing tactics are concerned, Rogers doesn’t see a smooth conclusion on the horizon.
“I don’t know how long it will last,” Rogers says. “I don’t see how it can last much more beyond this year.”
Various Scandals (only a few):
Benghazi: Just a spontaneous riot and nobody’s fault?
IRS: Would the current administration use the IRS to advance a political agenda?
The DOJ secretly subpoenaing phone records of AP reporters: Would the DOJ really do this?
Fast & Furious: Assault rifles are good for our south-of-the-border gangsters but are bad for Americans! How crazy is this?
LIBOR: Big international banks fixed rates to earn a few extra $ Trillion. Who would expect banks to do such a thing?
Food Stamps: 47,000,000 Americans on food stamps, tens of millions more unemployed, but “all-is-good” for the upper 1%. This is scandalous to most middle-class Americans.
Jim Willie (Hat Trick Letter – subscription required – excerpted from www.milesfranklin.com)
“Another gold trader source with Hong Kong and Beijing connections reported that Chinese buyers are interested in buying aggressively. They have told the broker that price is not a primary concern, only to obtain as much volume as possible and to seek sources vigorously. They have deep pockets and sturdy motive, as they see the collapse of the global monetary system in relentless progress…The result will be powerful strong demand that is manifested in a continual flow of gold bars to the East, a strong floor on the physical gold price with strong hands, very big strong hands. They see the breakdown in the global monetary system, a coordinated destruction by central banks, and the rancid integrity of paper assets (led by sovereign bonds) as a weak substitute for wealth…
THE C.O.M.E.X. GOLD PRICE IS SLOWLY BECOMING IRRELEVANT, AS THE DISCONNECTION BETWEEN PRICE DISCOVERY AND ACTUAL DELIVERY FURTHER BREAKS THE BOND OF TRUST IN THE GOLD MARKET. THE IRRELEVANT PAPER GOLD PRICE IS THE KISS OF DEATH, CERTAIN TO SPARK A HUNT FOR REAL GOLD, NOT PAPER IMITATIONS.
The migration of gold from West to East is the grand story of the decade. China wants the Yuan to have at least a role in the next global reserve currency. They demand respect. They wish to use their trade advantages in such a manner that results in more power and influence to be gained from their Yuan currency in surplus and their Gold reserves in accumulation. They strive for reserve currency status, but it is a mixed bag of benefits and burdens.”
Bill Holter on May 20, 2013:
So China says that they have 1,054 tons of Gold, not a huge amount but it does put them in the top 10. They produce 200 tons or so internally from their own mines and that supply never, NEVER gets exported, they KEEP ALL PRODUCTION and have done so for years. Over just the last 10 years even assuming that in earlier years they didn’t produce 200 tons, they must have at least accumulated 1,500 tons. On the import side, they have imported nearly 1,800 tons just over the last 2 years alone…so what’s up with this “1,054 ton” number? This cannot be, they have without a single doubt in my mind well over 3,000 tons and this number comes from simple connect the dots and 3rd grade addition.
But why would they “lie”? It doesn’t make sense to “cry poor” does it? Well, if you think like the Chinese it makes perfect sense. They are not a “flashy” society by nature and are not ones to boast. If you are accumulating something then why would you do anything to push the price up in the middle of your operation? If you knew (because you have the financial muscle and your finger on the pulse to see it) that the Gold market supply and demand situation was quite fragile, would you do anything to spook the market higher? If you knew that your opponent (the West) had a vested interest in keeping the price of Gold down yet could slowly deliver real product over time, wouldn’t you “carry your opponent a few rounds”? Or as long as they kept delivering? If your goal was to clean up and accumulate as much Gold as possible you would do NOTHING to spook the herd and cause short covering or a run on inventories …’never’ until you have seen the bottom of the barrel that is!”
Richard Russell on May 20, 2013:
A few months ago, I made a statement that I said was guaranteed. Here it is — “The US standard of living will be heading lower during the years ahead.”
Read from the DI: Gold and Silver: Sentiment
Read from the DI: Silver Lows: A Discernible Pattern
Read from Paul Craig Roberts: Washington Signals Deep Dollar Concerns
Read from Jim Turk: Incredible Chart, Look for $12,000 Gold & $600 Silver
And there you have it – scandals, ongoing monetary insanity, and continuing transfer of the real wealth (gold) from the west to the eastern powers. Are you prepared for more craziness that is certain to arrive during the next two years?
aka Deviant Investor
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