The bullion dealer's goal is to provide gold and silver bullion investors with market commentary when significant developments warrant updates.   At this point, that will probably be every other month starting in 2011 since the author has been writing this free ezine for over a decade now and still has not won the Pulitzer Prize.

 

November 7, 2012:  MOVE OVER HOOVER AND COOLIDGE, HERE COMES THE OBAMA GREATER DEPRESSION.


 

Little did I know how ignorant Americans are of economics and finance, but last night's win by The Amateur for another 4 years of failed policies is actually a bullet dodged by the conservative movement in the United States.  It has always been my private, personal belief that had Mitt Romney been elected President in 2012, he would have served only one term.  Serving only a single term is considered a de facto failure of a presidency Stateside, regardless of the legislative achievements made.  However, rapidly deteriorating conditions on the ground, not on the campaign trail which Barack will have to exit permanently and actually earn his salary and benefits going forward DOING THE PEOPLES' WORK, NOT HIS OWN RE-ELECTION WORK, will create an environment of civil unrest in the U.S.A. that will vilify whoever occupies the Oval Office in the next 4 years.  WE ARE NOW SOLIDLY ON THE PATH TO GREEK INSOLVENCY, WESTERN STYLE.

I say this with absolute conviction that while Sandy will likely become the Obama Katrina based on incompetent relief efforts by FEMA to date in New Jersey and New York, the anemic growth of the U.S. economy in the last 3 quarters is about to become progressively worse.  Just look at earnings projections for the 4th Quarter and beyond, and it shows declines upwards of 7% year-to-year, a harbinger of another recessionary episode that a frail economy cannot afford to experience.  Supposedly the stock market is a forecasting barometer for the economy, so expect a severe swoon in stock prices at any moment now that the distribution top in process for the last several months has run its course.

[ Regarding Obama's Katrina, a.k.a., Sandy:  My suggestion to Barack Hussein is to hire Mitt Romney to handle the Sandy disaster and send the FEMA life-long government employees back to Washington to twiddle their collective thumbs, which we all know they are very adept at.  The private sector could handle this mess with massive human suffering better than the Red Tape Nightmare dubbed FEMA.  Give Romney a budget, which we know he can stay within, Barack, and access to freshly printed Federal funds and the ability to hire private companies to expedite the relief efforts.  BUT THIS STORM IS GOING TO BITE THE ANOINTED ONE IN THE BEHIND BEFORE IT IS OVER.  THAT SAID, it will still run in second place to the disaster named Benghazi Terrorist Attack ......... stay tuned on that pie about to come out of the oven of Transparent Presidencies.  SORRY, BARACK, MITT CAN'T HELP YOU ON THAT LAST ONE, EXCEPT TO FAIL TO MAKE IT AN ISSUE DURING THE NOW-EXPIRED PRESIDENTIAL RACE. ]

OBAMA, BAD FOR AMERICA's LONG-TERM HEALTH, BUT FRICKING WONDERFUL FOR GOLD AND SILVER.  The devaluation of the U.S. Dollar will accelerate in the Obama, Phase II Era, as Federal spending and requisite money printing by the Fed set new world records.  Bernanke will resign his post at the Federal Reserve when his current term ends, because he knows that the patient is beyond saving and he is just running a Monetary Ponzi Scheme that history will tag him on!  He also wants to avoid the missiles lobbed by the angry crowds that will be visiting the White House daily.

I still expect to see $2,100 Gold and $38 Silver before the end of 2012.  Targets for 2013 will be substantially higher because the world will be in Full Panic Mode by then.

There will continue to be legislative gridlock in Congress, with Tea Party Republicans, amongst others, rejecting outright any and all Fiscal Cliff proposals by Obama, Harry, and Nancy that raise taxes on the small businesses of America who are struggling to stay afloat in the Obama Depression.  Forget about new hiring by these ultimate New Job Creators.  In fact, going over the fiscal cliff and bringing the economy to its knees may just be the bitter pill the Nation needs to swallow to realize that Greek-style fiscal largess is a Grecian Road-To-Disaster.  PLEASE DO REACH ACROSS THE AISLE, MR. PRESIDENT, but I would wear asbestos gloves in doing so.  This is not a scorched-earth, sour grapes perspective.  THIS IS TOUGH LOVE FOR A NATION THAT IS ADDICTED TO ENTITLEMENT SPENDING AND MUST BE WEANED FROM THE NARCOTIC, even if it means a period of great upheaval ensues.  Moms dutifully wash their kids' ears despite the deafening screams of abuse.

The Sage of Wexford sees civil unrest coming to a venue near you ( and me ).  Shotguns with pistol or stock butts are in order.  I expect inflation to continue to increase as we approach 2013, especially in food prices and for all currencies around the world to devalue in relation to both Gold and Silver due to endless money printing by the Central Banks of the World.  We have now completed the consolidations from the first 2011-2012 recovery rallies in both Precious Metals, and are ready to work our way higher in the weeks and months ahead.  The conditions on the ground are perfect; of course, in a perverse sort of way.  Unrest in Europe, which is ready to erupt once again in both Greece and Spain as my nimble fingers fly across the keyboard, is going to be another Party Pooper for the Obama Victory Dance.  Barack, please do not spike the football; it will seem very unseemly as the stadium empties during The Panic.  Kicking the can down the road is about to meet a giant pothole of crisis retention.

Thank God Scott Brown was defeated in Massachusetts!  He lied about his conservative principles to get elected some 2 years ago upon Kennedy's death, and he deserved to be thrown out on his duplicitous ass by a True American Indian ( no deception there! ) who will not engage in clandestine maneuvering to hide her liberal legislative agenda.  I think Mr. Brown will find work in the Middle-Aged Models arena, hopefully fully clothed, but that may even be a stretch.  What about the Liars' Club.  Eventually the public finds slimy politicians out; they are just still working on The Greatest Fraud Ever Perpetuated On The American People ( see Clint Eastwood for explanation ).

I should stick with the monster font size throughout this ezine, I can fill a lot of space fast!  Is inflated text a sign of the times??!!

Off to do more productive things, but I may return with more dewdrops of wisdom if the urge beckons.  Did not get much sleep last night, was ready to hang American flag upside down in the mariners' classic Sign of Distress. 

However, once I realized that Barack Hussein Obama's legacy would be dominated by the Greatest Depression America has ever seen, a sick smile came across my face. 

Obama is truly the 2013 Captain of the Titanic and he can't, although he will try, blame Bush for this shipwreck!  HE COULD BLAME HIS PREDECESSOR THOUGH!!!!!!!!!!!!  That Great Unifier guy that served from 2009 through 2012?

 

A POPULACE ADDICTED TO ENTITLEMENTS RE-ELECTED OBAMA,   THE MAJOR VOTING BLOCK FOR THE BIGGEST GOODIE-GIVER.

Hey, Clint, got a spare room at your digs?

 

The Sage of Wexford, ready and able for THE Second American Revolution.
 

P.S.  Dear Al Gore who has a Carbon Footprint the size of a coal-fired electricity plant that I hear is being built in a certain Chicago neighborhood:  SANDY WAS NOT CAUSED BY GLOBAL WARMING.  Your obese carcass at a public event, Al, creates more warming AND Mayor Bloomberg, always on top of everything, just ask Staten Island residents, is on the way to take away your giant sodas.  Two Hypocrites of the Ages.



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January 25, 2013:  Fix Bayonets And Get Ready To Go Over The Top.

Ah, The Sage uses such literary images to get his point across concerning Gold and Silver ownership!  This is World War I imagery where an American Doughboy is leaning against the muddy walls of a rat-infested trench in France, fixing his razor-sharp bayonet upon a trusty Springfield '03 in preparation for the order to go over the top of the trench ....... AND CHARGE.  Now, we all know from history that this form of warfare was very costly in terms of shear numbers of lives of soldiers, so don't expect the same grim results with mustard gas and machinegun fire and artillery barrages that the real Doughboy suffered through in the early 1900's.  In this transformed image, it is the Gold or Silver Investor of 2013 that would rather take his or her chances running across the killing fields than being stuck in the stinking trenches of Dollar Devaluation, Stock & Bond Bubbles, Cost of Living Inflation and Government Monetary/Fiscal Malfeasance.  These are effectively the Four Horsemen of the 2013 Apocalypse that are riding headless at breakneck speeds down the middle of the trenches we Doughboys are soon to exit. Sounds like four separate trenches, but it is indeed one very putrid and foul-smelling rift in Mother Earth that has been created by the Evil Axis Powers of Wall Street Banksters, the Bernanke Federal Reserve, and the U.S. Government.

You could either risk dying in the trenches or dying in the fields of once picturesque France.  We Goldbugs, as we are derisively referred to in the financial media, a venue primarily sponsored by the Wall Street finance chop shops, are very well armed with Golden Bayonets and Silver Bullets and possess the fortitude and stubbornness of a Sergeant York to take the higher ground.  We have been resolute in arming ourselves with these weapons of Financial Survival for the last 12 plus years, and are not about to lose faith in our cause now.  We have been sitting in the trenches for the last 4 years, adding numbers by the day, and waiting patiently for the Captain to blow his whistle signaling the commencement of the CHARGE.  This will not be the Final Charge, but a move to much higher ground that will leave our naysayers stuck in the trenches at the mercy of the Four Horsemen of Financial Ruin that I mentioned above.  And we can see that our Captain ( the Global Bullion Market ) has the whistle to his lips ready to initiate the charge to higher ground.

Now this past week of trading in the precious metals may seem like a nocturnal artillery barrage, with sky-borne flares and all, but it is a blessing to those of us adding to our stockpiles of bayonets and bullets ( Gold and Silver ) as prices come back in a mini-dip to increase our Purchasing Power of same.  With real-life U.S. inflation in virtually every product or service that we Doughboys ( and Doughgirls, I know the Chairman of the Joint Chiefs of Staff has not been in a trench for some 20 years AND PANETTA ..... well ...... NEVER! ) use in our daily lives, it is nice to get a bargain every once in a blue moon.  U.S inflation is north of 9%, just check your monthly expenses from year to year, and you will see.

And that is the perspective that every Doughperson ( politically correct moniker ) should have via Gold and Silver price action at this point in history.  Like the dirigible that was used for surveillance in the War To End All Wars, soaring above the smoke and din of battle to gain perspective on the whereabouts of opposing forces, WE NEED TO KEEP PERSPECTIVE ON THE RECENT PRICE HISTORIES OF BOTH GOLD AND SILVER TO REALLY APPRECIATE WHERE WE AND THEY BOTH HAVE COME FROM:


 

Technically, a cup and handle formation is forming for both metals that is known to break sharply to the upside when completed.  This backing and filling activity is really a sign of accumulation by strong hands, so once we break out, soon I am sure, the move will be over $1900 in Gold and $43 in Silver before any consolidation at those levels.

Let's not us war-weary souls forget that just over 4 years ago Gold bottomed around $850 per ounce and Silver bottomed at just under $10 per ounce at the termination of the Sell Everything Panic of 2008; and I must admit as a bullion dealer that during this price decline WCM set new all-time records for Gold and Silver sales!!  See non-leveraged buyers of physical precious metals have the foresight to buy Gold and Silver upon declines with total conviction that prices will eventually go much, much higher ........ AND THEY DID!!  IT IS THE LEVERAGED PAPER GOLD AND SILVER TRADERS WORKING THE COMEX AGAINST LONG-ESTABLISHED REGULATIONS THAT MUST MEET MARGIN CALLS DURING A PRICE SWOON, AND THEIR EFFECT UPON PRICE DISCOVERY IS SOON TO DIMINISH AS MORE AND MORE DAILY TRADING VOLUME MOVES OVERSEAS, ESP. TO ASIA.  Not to mention the effect that decreasing levels of physical at Comex warehouses will have on the ability to write contracts that are 10x to 20x times the exchange's ability to deliver physical gold and silver at purported contract settlement.

So per the pretty pictures above, both Gold and Silver proceeded to set new all-time bull market highs which the stock market is still struggling to achieve.  Not to say that 2007's S&P 500 high of 1575 won't be reached before the wheels fall off of the ammo cart, free money for the use of vested interests on Wall Street can inflate an asset market well beyond anyone's logical expectations or reasonable price valuations.  Happened in 2000 and 2007, and will happen in 2013, stay tuned, financial problems as far away as China or as close as Washington could be the catalyst.

Furthermore, we do know with some certainty now that the Exchange Stabilization Fund through the New York Fed's financing of J.P. Morgan and Goldman-Sachs in the futures markets has taken the equity ( and the bullion market on the Short Side ) manipulation strategy to new heights to attempt to keep retail investors on the battlefield while insiders and moneyed clients head for the barracks.  Americans pouring $Billions into equities this month as 2013 opens is a sure sign that the feint maneuver by the Axis Powers is working, setting up the stage to trap as many unarmed stock investors on the killing fields when the machineguns open up fire.

( Sage Note: Totally amazing that Hollywood has gotten a free pass in the Gun Control debate when the disgusting, gory, gratuitous violence they depict in virtually every dramatic movie can do nothing but de-sensitize people to actual acts of violence. )

An almost double in Gold's price and a tripling in the Silver price are not too shabby when the Wall Street Mob and its sheeple pound their chests about the 112% gain in the S&P 500 from the March, 2009 lows as of Friday's close.  Our Golden Bayonets kept pace with the liquidity induced stock bubble created by Bernanke's $3 Trillion expansion of the Fed's Unbalanced Sheet ( that we know of!!! Dollar Swaps anyone!!! ), and our Silver Bullets blew the doors off of equities.  Be advised oh Unarmed Sheeple that U.S. stocks have once again grown annually in price during this 4-year period at the 1990's Bubble Rate of Ten Times the growth rate of the U.S. economy which has been 2% at best. 

AND WE KNOW HOW THAT SKIRMISH ENDED IN 2000 AND LATE 2007 WHEN STOCKS PUT IN TOP #1 AND THEN TOP #2, RESPECTIVELY, IN THIS SECULAR MOTHER OF ALL BEAR MARKETS IN STOCKS.  EQUITY TOP #3 IS IN PROGRESS IF AMERICAN INVESTORS WILL JUST HEAR THE BLARE OF THE BUGLE.  Or was that a ringing of a bell as Americans pour money into equities at the top in January, 2013?!

 

GOLD AND SILVER ARE MERELY IN ACCUMULATION PHASES GETTING READY TO GO OVER THE TOP.  And the "at-the-open" Comex trading selling-swoons of Paper Gold and Paper Silver that we saw this past week is just another attempt by the Axis Powers to blow smoke in your face to obstruct your field of view ON A DOLLAR COLLAPSE IN THE MAKING.  Always remember that new highs in Gold and secondarily in Silver are a ringing VOTE OF NO CONFIDENCE ON FIAT CURRENCY AND FIAT GOVERNMENTS.  AND THE VEHICLE THAT THE DOLLAR'S ENDLESS CREATORS USE TO SEPARATE INVESTORS FROM THEIR HARD-EARNED MONEY .......... U.S. TREASURIES AND CORPORATE  & MUNICIPAL BONDS ......... HAPPEN TO BE MORE OVER-PRICED THAN AT ANY TIME IN HISTORY.  No premium for creditworthiness or REAL inflation rates!!!  Just ask Bill Gross of PIMCO on this one!


 

Looks like this puppy has finally turned upward to higher yields, a devastating event for financial asset investors, not to mention the creditworthiness of the United States. 

How can both the U.S. Mint and the Royal Canadian Mint have suspended Silver Eagle and Silver Maple shipments to primary distributors this month unless demand for these silver products is off the charts??!!!  Another example of physical, real-world demand for bullion rising while the bullion market price is manipulated downward in a futile attempt by the Axis Powers to keep us Doughboy-Goldbugs wallowing down in the trenches while they fill them with suffocating mustard gas; better yet, since this gas is the direct emission of a Rotting Dollar, we should label it "Dollar Gas".  Could it also be that such astute traders as the Chinese are employing some of the Axis Powers known as Morgan and Goldman to depress both Gold and Silver temporarily while they continue their accumulation program to have a Gold-backed Yuan or Gold-backed Asian Currency Basket??!!!  Not an unheard of move by a sovereign state.

 

Regardless of whoever is placing these bullion market bending trades for even divergent reasons, the end result is the same:  MORE BAYONETS AND BULLETS MADE AVAILABLE TO A GREATER NUMBER OF DOUGHBOYS AND DOUGHGIRLS.  BUY THE DIPS.  IT IS THE ONLY WAY YOU WILL SURVIVE THE JOURNEY OUT OF THE TRENCHES ONTO THE SAFETY OF THE HIGHER GROUND BEYOND.

It is another fact that Central Banks around the world have been in a Gold Reserve Accumulation Mode for going on some 3 years now, if not during the entire "recovery" period after the 2008 Collapse.  THEY KNOW THAT THE ENDLESS CREATION OF NEW MONEY TO STAY IN POWER DURING A MASSIVE DEBT COLLAPSE IS AN INFLATIONARY ROAD TO PERDITION.  FIAT MUST BE CONVERTED INTO TANGIBLE WEALTH, GOLD AND SILVER, IN ORDER TO KEEP THE FOOT SOLDIERS' CONFIDENCE IN THE PURCHASING POWER OF THE CURRENCY OF THE REALM.  As an American, never forget the expression:  "Not worth a Continental".  History is littered with the carcasses of Governments and Bankers who have tried to print their way out of a Debt Collapse.  If you think 2008 was a whopper of a collapse, wait until this Greek Tragedy unfolds with more compromised debt outstanding around the world today than then.  Years ending in "13" may be very unlucky years for Debt Creators and Debt Holders.

Funny how manipulations through ill-conceived and ill-executed market interventions such as the Fed's sophomoric micro-management of the U.S. economy through Quantitative Easing  at $85 Billion per month and Zero Interest Rates have unintended consequences.  More troops are now armed with Golden Bayonets and Silver Bullets and READY TO GO OVER THE TOP.  And yet the U.S. economy remains mired in a growth rate, if positive at all currently, that fails to put millions of Americans back to work.  WELCOME TO THE BERNANKE-OBAMA DEPRESSION OF 2013. Higher taxes have already hit Americans' pocketbooks and more are in the pipeline ......... how is that going to work to instill buying power for a consumer-driven economy???  Californians, Texas looks mighty good right now, free cowboy hats included.

 

THE SAGE OF WEXFORD, gas mask strapped on tight.


P.S.  If the analogies used in this month's ezine appear insensitive to some given the Gun Control fiasco that is emanating out of Washington and Biden's pickup truck, so be it.  So long as I have Freedom of Speech in this country, I will exercise that right without apology unless I unduly offend those that have directly suffered at the hands of a madman.  It is much more a mental health system and Hollywood/media induced problem than a gun ownership problem, in my humble opinion of being a law-abiding gun owner for some 45 years now.  As a business owner and possible target of office invasion, and gold and rare coin dealers have experienced this already in not insignificant numbers, an AR-15 is actually on my buy list.  The bad guys will always get the high capacity magazine weapons, even Eric Holder has been known to give them out.  Why shouldn't law-abiding citizens has access to them, Ms. Feinstein, to level the field in self-defense?!  Biden can give me another shotgun also, since he and Barack have access to the Public Checkbook. 

Remember as well that an armed American citizenry known as the Colonists threw off the freedom-robbing yoke of an Imperial England that was hell-bent on disarming these patriots over time.  Be it also known that Adolf Hitler disarmed the German people in order to achieve his iron grip of Fascism.  I am not a radical, but Don't Tread On Me.




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EVER SEE A WORKER BEE DIE OF EXHAUSTION?!!  Any Government that takes more and more from its Worker Bees is very likely to get stung in the end; the Bozo's on Capitol Hill think the honey pot is bottomless, but I think Americans are about ready to aim their stingers in Washington's direction and bring a few pitchforks to boot.  Nancy and Harry and Barack better sharpen their golf swings.






March 16, 2013:  Money Always Goes Where It Is Treated Best.

The Sage has to drag himself to the keyboard to pound out these ezines these days.  Aside from writer's block, I suffer from nausea after watching the cable news during the day.  Fox News, of course, because I am a Worker Bee Conservative, and I throw stuff at the TV if I get a Major Network /Mass Media channel that would shame Soviet Pravda in its distortion of the facts and outright propaganda for the Obama Administration and the Leftist/ Socialist agenda in general.

However, I think this Literary Pied Piper is weary after some dozen years of trying to lead the American and international masses in the right direction as to where to put their money.  Kind of like herding cats.  Many still do not get the message that we Americans and most of our less-disciplined trading partners are well on our ways to mutual economic and financial destruction via out-of-control Government spending and promises AND via central banks that print money to keep these Spending Addicts afloat.  Oh, I am such a pessimist they say.  Ha ....... I have had the best and last laugh with gains in gold and silver that have firmly secured my upcoming retirement in some 4 to 5 years ...... if I am still kicking, of course, and have not expired out of abject disgust for what has happened to the once-great America I grew up in in the 1950's and 1960's.

If you have other pressing commitments today such that you do not to have the time ( or enough fresh java ) to read the entirety of this month's "Dewdrops of Wisdom", then I will sum things up as best I can for you Clift Note graduates out there:

American financial and commodity markets are destined for second-class and lower standing and trading volumes in the years ahead DUE TO OUTRIGHT MANIPULATION BY A PRIVILEGED/ INSIDER FEW, NON-ADHERENCE TO PUBLISHED EXCHANGE REGULATIONS, AND BIG-MONEY PREFERENTIAL TREATMENT AT THE OUTRIGHT EXPENSE OF RETAIL CUSTOMERS.  One thing about new money:  It knows an inequitable playing field when it sees one and has the smarts and means to seek out and participate in more level / efficient venues.

One early sign of the veracity of this statement is the continuing decline in financial services industry employment some 4 and 1/2 years after the Financial Panic of 2008.  Just observe the past and recent lay-off announcements concerning same.  The American Financial Services Industry is in a state of decline that will not be reversed by the "purported" New Bull Market in the Dow, but will accelerate as All Things Paper lose their positions with global investors as efficient stores of value THAT WILL NOT EXPERIENCE A FAILURE TO DELIVER AT SOME REDEMPTION POINT IN THE FUTURE.

In my personal and professional opinion, I think the Gold and Silver ETF's with the sole exceptions of Eric Sprott's entities are huge Ponzi Schemes that will, in the not-so-distant future, fail to deliver during a court-ordered or politically-motivated audit.  I feel strongly that the alleged gold and silver that these custodian arrangements supposedly hold is not even close to the published data, but that this "mystical gold" and "mystical silver" has been lent out or hypothecated to an extent that gravely compromises the liquidation values of the trusts.  I would wager that actual physical bullion was never delivered into the storage vaults in the first place on many occasions.  Wexford Capital Management receives orders on a weekly basis that are the result of enlightened investors finally getting religion that "American promises to deliver" are not worth the paper they are printed on.  We are not talking about the U.S. Dollar here or U.S. Treasuries, although some day soon we will be.  This flight from Paper Gold and Paper Silver will continue to accelerate going forward, and will reach a panic mode the nanosecond that a failed ETF audit occurs or is hinted at.  The millions of ETF holders have class-action status that will open many an empty bullion vault to the sickening light of day and subsequent prosecution of the alleged "trustees".  Maybe finally a financial services executive will get the dreaded orange jumpsuit and serve prison time along with Madoff and Corzine.  Oh, forgot ..... Corzine was big contributor to Barack.

Overall trading volumes are down for these major political contributions of the American Ruling Financial Class led by Goldman and Morgan, not just because the retail suckers in stocks finally read the memo that the market on Wall and Broad is a casino rigged against him or her, but increasingly overseas investors' money is entering emerging marketplaces where America's bad habits and crooked practices have yet to take hold.  The historic decline of American markets, along with the building decline in the use of the Dollar in international trade, will be a world-class lesson that few of these newcomers are likely to ignore or repeat.  As these budding exchanges in Shanghai, Singapore, Moscow, Mumbai, and Mexico City grow in size and stature, the fate of American Trading Homogeneity will have been well sealed.  Sadly, as corrupt as our current political system is here in the Divided States of America, so have our trading venues become places where corruption via preferential treatment and rule bending or outright violation has left a very bad taste in the mouths of the average American retail investor. 


Sage NOTE:  Massive losses in equities since the Year 2000 top in stocks and a "Lost Decade" of zero or substantially negative results from equity investing have also left a very, very, very bad taste in American investors' mouths, not to mention the reality of delayed retirement plans that keep on being pushed out further and further into the future for these fleeced investors.  COULD THE U.S. STOCK MARKET BE READY TO FORM A TRIPLE TOP AND BURN STOCK INVESTORS ONE MORE TIME??!!!  YOU BETCHA.  Three strikes and you are out.  Out of time and out of money.  That is the Sage's call.

WELCOME TO THE OBAMA DEPRESSION AND THE RESUMPTION OF THE YEAR 2000 SECULAR BEAR MARKET IN U.S. STOCKS THAT IS NOT THROUGH GRINDING YOUR FINANCIAL WEALTH INTO DUST.  EXPECT ANOTHER DECADE OF MINIMAL OR NEGATIVE TOTAL RETURNS IN U.S. STOCKS STARTING ....... about now!

Declining fundamentals, loss of confidence, and just prudent take-the-money-and-run psychology will eventually over-ride the giddiness created by an endless stream of Fed-printed liquidity.  We all know painfully well by now that Fed money printing DOES NOT PRINT FINAL CONSUMER DEMAND.  With a laughable BLS GDP number of 0.1% in Fourth Quarter of 2012, give me a fricking break that we have not been in recession for many a quarter now in the U.S.!!!   Remember also, when it is time to make out your Christmas gift list, that The Sage of Wexford has been telling you for years now that we essentially have experienced no true economic growth since the summer of 2007.  Especially in a debt-burdened/ consumer-driven country where the necessary liquidation of both good and bad debts has yet to occur in any meaningful degree at any level:  consumer, corporate, or Government.  What a joke it is to even suggest that Government debt has gone down during this Obama Depression when we are pushing the $17 Trillion National Debt Level BEFORE UNFUNDED OBLIGATIONS!!!   Per the ECRI data point of a prior peak in economic activity in July, 2012 ( sales, income, production, etc. ) that signals a current recession for the second time in 5.5 years, I have yet to see a stock market stay elevated no matter how juiced it is by overt and clandestine Government actions in the face of declining sales growth AND AN ABJECT LOSS OF CONFIDENCE ON THE PART OF THE POPULACE!  SEE RECENT CONSUMER CONFIDENCE PRINT!!!

We just had a little blip in some of the Government econ stats, but they do not a trend make.  People needed to replace automobiles of late because they are now driving them 15,000 to 20,000 miles per year with the sprawl of urbanization in America.  Not to mention car travel over air travel with the hassle and cost to get on an airplane today!!  That new car smell is overwhelmed by pet stinks and spilled giant sodas from the Bloomberg Deli right around 80,000 miles.  And lenders are back to their former "stupido" lending standards with interest rates of 2% to 3% for 60-month loans, not to mention home lending at below 4% to an increasingly challenged borrower class.  As an American, don't you get a sense of pride knowing that the FHA has taken over from bankrupt Fannie and Freddie Mae in the granting of 3% money-down mortgages as the guarantor of first resort to borrowers that often should only be living in their cars.  Another sure sign of insanity in the American Financial System.  Deja Vue All Over Again?!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Having jettisoned the vast majority of equities from my personal accounts as early as 1999, this is one man-on-the-street that has done just peachy in tangible assets during the last 15 years.  In fact, I was telling my managed account clients as early as 1997 that the financial markets were an inequitable investing venue and were overvalued even at that point in time.  And almost without exception, during that decade's raging bull that stretched equity prices to levels that would eventually not be exceeded for a dozen or more years hence, THEY LOOKED AT ME LIKE I HAD ANTENNAE COMING OUT OF THE TOP OF MY HEAD.  Yikes, an Alien.


AuAgAuAgAuAgAuAgAuAgAuAgAuAgAuAgAuAg


Back to markets that treat investors' money well ......  one has to look no further than Gold and Silver regardless of the skullduggery that occurs on the Comex daily to attempt to cap prices and discourage bullion investors from exiting Decaying Dollars and Helicopter-Dropped U.S. Treasuries.  I was rolling in the aisles with laughter when I heard that our illustrious CFTC, the tainted watchdog!/ regulator of our U.S. commodities exchanges, was looking into the possibility of an investigation into the London precious metals price fix!  Wow, these government sleep-walkers have done such a good job of prosecuting uncoverable, manipulative short positions in silver on the Comex, that I highly recommend they spread their protective wings to international waters.  Could it be that the bidding up of gold and silver prior to the U.S. open is starting to take its toll on the ability of Goldman and Morgan with Exchange Stabilization Fund money in their Armani pockets to effectively slap down the precious metals silly in the first 2 hours of trading each day??!!!!!

PLEASE NOTE HOW BOTH GOLD AND SILVER OVER THE LAST SEVERAL WEEKS AND MONTHS HAVE RECOVERED INTRA-DAY FROM THE MAJORITY OF THESE NOW DELAYED, JUST-PAST-THE-OPEN MORNING SLAP-DOWNS.  LIKE A CORK THAT IS HELD UNDERWATER BY AN ARTIFICIAL FORCE, THE DEEPER YOU SUBMERGE IT, THE STRONGER ITS MOVE TO THE SURFACE.

Oh, I know that the last 2 years have been quite trying for Precious Metals investors, but price spikes like we had in the Second Quarter of 2011 can take a couple of years to work off.  This is a prolonged consolidation period and nothing else; hardly the end of the bull and, certainly, not the sign of a bubble peak.  In fact, now that the vast majority of weak hands have been washed out of Gold and Silver, the strong hands which include the central banks of China, Russia, Singapore and India can exert their influence by accumulating as many ounces as possible at these temporarily depressed prices.  You can rest assured that Dollar Weary central banks have been accumulating Gold and Silver reserve in lieu of paper currencies in vast quantities over this period, and the statistics show this surging trend in central bank purchases of gold in particular.  No more caps on central bank sales of gold a la a Washington Agreement in a world drowning in debt that is denominated in rush-to-devalue currencies; quite the contrary, Grasshopper, central banks are firmly in accumulation mode of gold and most likely silver in such countries as China and Mexico and probably Russia where "gold's poor cousin" has a history of having been a monetary reserve metal.  Monetary Reserve Metal history or not, I firmly believe Silver will be accumulated by central banks around the world in addition to gold because no one, including the "Doomsday" Sage with the thunderstorm cloud floating above his head, could have forecast how bad things really are in man's 2013 world of humongous unresolved bad debts in the $100's of Trillions.  Interest Rate Swap Derivatives are the next giant hairball to be coughed up on the world stage, Cyprus move over.

 

Da Ya thunk they know something most Americans don't??!!

WE ARE ON THE CUSP OF A MAJOR MOON-SHOT IN BOTH GOLD AND SILVER.  I know I am the perpetual bull when it comes to these two ever more precious metals, I stand guilty as accused, but I see one in one-thousand clients that is even close to being able to buy a significant chunk of either Gold or Silver or BOTH at the absolute price bottom in a move.  "When you got the Dough, GO!", is my motto with gold and silver purchases.  Naturally, as a reputable and well-established bullion broker what would you expect me to say, but my clients have made many, many times as much money in their bullion positions since 1999 than I have made at a 1.4% average fee level in selling it to them!

Get in the bullion market while you can and leave market timing to the computers.  Shipping delays via backlogged product, not to mention increasing transportation & insurance costs for my distributors, are popping up in more and more of my Gold and Silver products as mints and refiners become overwhelmed with actual physical demand and the cost of doing business in the United States keeps going up.  Another very telling indicator that suppressed Comex prices will mean little to you in the end.  Depressed exchange prices when physical demand is surging ..... doesn't make any sense to anyone with a pulse and certainly doesn't make any sense to The Sage who still has a pretty good pulse at about 55 per minute.  The buoyancy of cork will not violate the laws of physics.

The U.S. Comex is going the way of the Doo-Doo Bird as a major global price "discovery" venue for both Gold and Silver.  Unfortunately, overall, we are a nation in decline.  But fortunately for you, you have a GLOBALLY-TRADED market where your fortunes will not decline, GOLD & SILVER.  Precious Metals are the final currencies of choice, or will soon be, THE WORLD OVER.  When the stock and bond markets collapse and the Dollar seeks its true value once again in the dustbin of history, these markets will soar to $5,000 for Gold and $160 to $200 for Silver.*  Fiat currency failures are facts of history and not figments of this writer's imagination.  American currencies have failed many times since 1776 and the current Dollar is about to meet a like fate.

Haven't I been right on the money since 1999?!!!!!  No guarantees, of course, but there is no guarantee that our Government or our Banks will be solvent with doors open on the 'morrow!  Note how the emergency $250,000 FDIC guarantee of checking accounts has now expired.


THE SAGE OF WEXFORD, putting money where it has treated me best.


* Actually, we will not have to wait for these climatic events; the TURN in both Gold and Silver prices is already beginning in my humble ( or not-so-humble ) opinion.  Accept that you will never buy at the absolute bottom in a move and move Dollars into both Gold and Silver when they are rotting in your bank or brokerage account.

 

THE TWO CHARTS BELOW VIRTUALLY GUARANTEE HIGHER GOLD AND SILVER PRICES WITH MONEY SUPPLY GROWTH STILL AROUND 10% ON A YEAR-TO-YEAR BASIS AND THE FEDERAL RESERVE'S BALANCE SHEET OR ADJUSTED MONETARY BASE HEADED FOR THE $3 TRILLION MARK.  THAT IS SOLELY "REPORTED" BALANCE SHEET ITEMS, NOT INCLUDING ALL OF THE DOLLAR SWAPS THAT BERNANKE HAS DONE WITH THE ECU AND ANY OTHER BEGGING NATIONS OR ENTITIES THAT HE HAS COMMITTED $100'S OF BILLIONS OF U.S. TAXPAYER MONEY TO IN ORDER TO ATTEMPT TO SHOW THAT UNCLE SAM IS STILL "BIG DADDY" AND HE IS THE GRAND MASTER OF ALL CENTRAL BANKERS.  Oh, Our Beloved Princeton Academic is so generous with your money and my money!  He will be burned in effigy before this collapse and depression is over.  Bernanke and Greenspan have assured their places in history alongside the central bankers of Weimar Germany, Venezuela, and Zimbabwe. 

The renewal of the decline in Money Supply Growth Year-Over-Year assists in confirming the double-dip recession The Sage knows we are firmly within!  Bennie Boy has floored the Economic Jalopy, BUT THE VEHICLE IS MERELY SPINNING ITS WHEELS ON A ROADBED OF DEBT-LADEN SAND!!!!!!!!!!!!!!
 

TRUE MONEY SUPPLY, YEAR-OVER-YEAR GROWTH

 

THIS CHART ON THE VELOCITY OR TURNOVER OF THE MONEY SUPPLY SHOWS THAT RECESSIONS HAVE ALWAYS OCCURRED WHEN THIS STATISTIC HAS BEEN EITHER FLAT OR IN DECLINE ..... AS IS NOW OCCURRING.  It appears that the velocity of the money stock has been in decline on a general trend basis since about 1980, at a historic peak in interest rates around 20%, so it appears that money turns over less frequently in the modern American economy.  This may be a very significant factor in the Fed's inability to increase economy activity just by flooding the system with liquidity or freshly-printed "money".  It takes more and more Fed Juice to keep the system fluid with such massive and progressive cash hoarding.

AND now with "scared depositors", such as in Cyprus thanks to Lagarde and the IMF proposing deposit haircuts to subsidize bad banking practices further than massive taxpayer subsides already made, WHERE IS THIS "SCARED MONEY" GOING TO GO????  When such cash sits idly in banks yielding negative real interest rates in a banking system where the depositor has generally lost faith and confidence, the "money" seeks out ANY returns outside of the economy and banking system, into the "risk-on" segments of asset markets.  However, with financial asset prices peaking, financial markets will no longer see this scared money in the 2013 Loss of Confidence Phase to the Greater ( Obama ) Depression, please make a note of this observation in your diaries. MONEY WILL GO INCREASINGLY NOW POST-CYPRUS UNDER MATTRESSES AND INTO SAFE HAVENS SUCH AS GOLD AND SILVER AND DIAMONDS. 

Hey, Bennie, you had better work on your golf swing also!  I will certainly not shed a tear upon your departure early in 2014, your Honorary Weimar Central Banker spot is now solidly confirmed in history.  Note how this chart conforms to the bond bull market in reverse, a market that has now entered a mammoth secular bear phase!!
 

 

AuAgAuAgAuAgAuAgAuAgAuAgAuAgAuAgAuAg


AND WITH THIS FINAL GRAPH, I REST MY CASE AND MY ARGUMENT THAT THE DREADED DOUBLE-DIP IS HERE ...... BUT I WILL HUMBLY REMIND EVERYONE OF MY SAGE ADVICE WHEN THE GENERAL MEDIA WAKES UP TO U.S. ECONOMIC REALITY IN YEAR 2013.

 

WHERE IS THE RECOVERY SINCE 2000, OH, STOCK MAVINS?

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May 14, 2013:  THE SHIP OF FOOLS IS TAKING ON MORE AND MORE WATER.

The Sage's venomous pen has pretty much run out of stingingly-honest ink since it has been copiously flowing over these electronic pages for the last decade plus.  The old expression:  "You can lead a horse to water, but you can't make it drink" remains as appropriate today as it did upon origination, probably back in the Wild Wild West days of this westward-bound Nation.  Getting slumber-walking Americans to wake up to the fact that the Once Great Country we call America is rapidly slipping into a position of Secondary or Tertiary World Status on almost all fronts:  Reserve Currency, political, economic, and financial, is a task I frankly have gotten quite weary of attempting.  Why any overseas investor would want to buy U.S. stocks in a country where corruption exists at the highest levels of Government, its central bank under Greenspan's clone, Bernanke, is buying up some 60% plus of all new Treasuries, and the country entered a new economic contraction in July, 2012, IS WAY BEYOND ME!  THE OLD EXPRESSION:  FOOLS AND THEIR MONEY IS SOON PARTED comes to mind.  Let's see, the trade du jour is:  Sell bonds to buy stocks.  Yikes.  How about selling your primary residence in San Francisco, CA to buy a grossly overpriced apartment in Hong Kong, China or New York City.  Seems like a "from the frying pan into the fire" type of move from one over-priced asset to another.  How can Gold and Silver be over-priced if the inflation-adjusted price from the 1980 highs for Gold is $2,350 and for Silver is $140?!

 

AMERICANS ARE SO POORLY PREPARED FOR WHAT I THINK WILL BE A GROUNDING EVENT FOR THE SHIP OF STATE THIS YEAR THAT IT IS ALMOST LAUGHABLE.  BUT THE SAGE IS NOT LAUGHING!

It is just that soup lines are not funny at all.  It is just that hobo's jumping from freight trains into your town to seek survival is not funny at all.  It is just that daily riots in the streets of a population pushed beyond the breaking point is not funny at all.  It is just that not being able to get your hard-earned money out of America's shaky banks or getting an I.O.U. instead in 10-year Non-redeemable Treasuries is not funny at all.  It is just that watching your once-strong Dollars buy less and less of your daily bread with a concerted, conscious effort by those currently in power to DEBASE AND DEVALUE THE SOVEREIGN CURRENCY OF THE REALM is not funny at all.  It is just that watching your grandchildren and great grandchildren being stuck with a bill for your living large on borrowed money today that they can never hope to repay without civil disobediance is definitely not funny at all.

DEPRESSION IS VERY SERIOUS BUSINESS.  IT IS JUST TOO BAD THAT WE HAVE A BUNCH OF CLOWNS AT THE HELM OF THE SHIP OF FOOLS. They are literally pumping water into the boat with GLOBAL MONEY PRINTING, kind of a MONETARY BILGE PUMP IN REVERSE.  The solvency and viability of most of the Developed Nations of the World is just not compromised or listing to port at this very moment, THEY ARE ACTUALLY FRICKING SINKING AT THIS MOMENT.  But the captains of the ships of state are just letting the passengers dance on the deck of the Titanic while the icy waters fill the galleys below.  We don't want to cause a PANIC, do we??!!!  The Sheeple will panic on their own, thank you very much.  Americans may be an uninformed lot on many issues, but once their bank accounts start shrinking before their eyes, THAT IS A CALL TO ACTION.

 

This is the cost of shipping goods by sea around the world, and one has to wonder why that price has been softening substantially ever since the March, 2009 low in stocks.  If there was a global recovery with legs, see 2003 to 2007 period, this graph would be trending up. THE WORLD IS INCREASINGLY BEING GRIPPED BY RECESSION, THEN DEPRESSION, AND ALL OF THE MONEY PRINTING IS JUST GOING TO MAKE THE COMING COLLAPSE THAT MUCH WORSE.

 

The way Americans and other suckers are literally throwing money at the Stock Market reminds me of August, 1987; January, 2000; and May, 2007.  Now say after me:  "LIQUIDITY DRIVEN MARKETS ALWAYS END BADLY ....... ESPECIALLY BADLY WHEN THE UNDERLYING FUNDAMENTALS ARE CRUMBLING AT THE SAME TIME ASSET PRICES REACH FOR THE MOON.  Excess liquidity could be partially behind the 2009 to 2011 surge in Gold and Silver prices, BUT THANKS ONCE AGAIN TO THE SHIP OF FOOLS, THE FUNDAMENTALS FOR OWNING THESE TWO MONETARY METALS THAT DATE BACK TO THE IRON AGE ARE IMPROVING, NOT DETERIORATING ONE IOTA.  There is a huge difference between literally-free money flowing into assets with deteriorating fundamentals versus into those whose fundamentals have never been better in the history of man.  The former soon becomes SPECULATION, the latter has and will become PRESERVATION.  A sad monetary, financial, and economic history of man, regrettably, we are seeing repeat itself.  Greed is an elixir that once tasted feeds on itself to muddle the minds of normally sane men and woman.  Exponential price appreciation is the locoweed of investing.

 

I wonder if the Bernanke Fed ever got the memo that if printing money to buy government and mortgage debt was the road to salvation AND SOLVENCY, the Weimar Republic of post-World War I Germany would still exist in some form or the other.  And be King of the World.  Kind of reminds me once again of the Sorcerer's Apprentice where Disney's Mickey Mouse (Obama, Bernanke, Holder, Reid, Pelosi, Schumer, Durbin, pick your character) keeps using his magic wand to multiply the brooms and buckets to take the workload off of him/her such that when the minions run amuck and start flooding the castle with an ocean of water, EVERYONE AND EVERYTHING GETS SWEPT AWAY IN THIS MAN-MADE SEA OF LIQUIDITY.  ( I would wager that many retirement plans are getting swept away in the U.S. stock market at this very moment with the S&P 500 now at about 1646; new money-drug induced highs, yes. New hysterical, speculative mass behavior, yes.)

If there is Zero Cost to own money, what is money really worth?  Next to nothing.  There is no opportunity cost to just leaving money under the mattress, AND THAT IS WHERE A LOT OF MONEY OUGHT TO BE INSTEAD OF IN AMERICA'S INSOLVENT BANKING SYSTEM (or in stocks, bonds, and real estate!).  You, my fellow Americans, are not being paid enough to keep your money in a U.S. financial institution that begrudgingly pays you 0.2% per annum for the privilege.  This is a safe place to keep money?  Bank of America?  Wells Fargo?  Citibank?  Chase?  I personally will boycott banks and money market funds in the near future when interest rates return to more historically sane levels as a form of payback for robbing me of any interest income for the last 4.5 years.  To cheat a customer for the use of their asset is tantamount to ROBBING THEM in my humble view.  Try 8% for 90-day cash in a system that is insolvent when pre-2008 accounting principles are applied.  The FASB has basically become a bevy of Accounting Prostitutes, no offense to you Ladies of the Night out there!

I will put my excess "cash" in gold and silver and colored diamonds AND  CONTINUE TO KEEP MY WEALTH OUTSIDE OF A SYSTEM THAT TREATS ME LIKE DIRT EVEN AFTER MY TAX-DOLLARS HAVE BEEN USED TO TEMPORARILY BAIL IT OUT AND TO REWARD THOSE THAT BROKE THE BANKING SYSTEM IN THE FIRST PLACE.  And don't ever forget the $3 Trillion of Garbage that Uncle Bernanke has assumed on the Federal Reserve Balance Sheet that you are also on the hook for either now or later.  The Government Motors, Chrysler, and AIG bail-outs were equally misguided and inappropriate; you are either a capitalist Democracy or you are not. As we know all too well from Obama's Green Energy Reign, THE GOVERNMENT DOES A FRICKING TERRIBLE JOB OF PICKING WINNERS AND LOSERS IN THE PRIVATE SECTOR.  Let the bad businesses survive along with the rotten banks and you can look forward to a Japanese style depression where even an Ocean of Yen will not set the economy back on track.

As Steve Forbes so eloquently put it in a recent interview, when you misprice an asset, the system eventually provides less, not more, of it.  THAT CAN BE SAID OF CREDIT IN THE WORLD ECONOMY TODAY.  If, for instance, you make mortgages to still-impaired borrowers at 3.75% today without any cushion for default or the nascent ravages of budding inflation, THERE WILL BE LESS MORTGAGE CREDIT PROVIDED IN THE ECONOMIC SYSTEM.  Lenders are just not being compensated for the risks they are taking to lend money to debt-burdened borrowers, and POST-CYPRUS, THIS INCLUDES BANK DEPOSITORS WHO HAVE NOW BEEN DEFINED BY GOVERNMENTS AROUND THE WORLD AS UNSECURED CREDITORS.  Back on the easy-money 2013 mortgage front, the Federal Housing Authority steps into the void created by the exit of Fannie and Freddie and puts you the taxpayer once again on the hook for the mortgages that are bound to be coughed up in the unfolding DOUBLE DIP we are already within!  THE STATE IS ONCE AGAIN THE GUARANTOR OF LAST RESORT OF DEBT THAT NEVER SHOULD HAVE BEEN CREATED IN THE FIRST PLACE AND WHICH NEVER SHRANK IN OUTSTANDING BILLIONS AFTER THE PANIC OF 2008.  Quite the contrary, mortgage and total global debt, private and public, JUST KEPT GETTING BIGGER AND BIGGER AND BIGGER like the gallons and gallons of water that the Apprentice's brooms and buckets brought endlessly to the fray.  If you think the Panic of 2008 was bad, wait until the Panic of 2013 unfolds WITH SOME $11 TRILLION MORE IN TOTAL DEBT IN THE WORLD TODAY, PARTICULARLY AT THE SOVEREIGN GOVERNMENT LEVEL.

How are these can-kicking governments going to bail themselves out when they were the lender of last resort during the last go-around????  Could it be Slovakia, like the Eastern European Serbia that saw the start of World War I with the toss of a homemade bomb, be the spark that ignites the derivative tinder laying in Trillions of Trillions of Dollar sums around the world?  Greece and Cyprus have now set New Millennium fiscal precedents as MICE THAT ROARED.  Slovakia would be a perfect contender in this System Buster category growing more populated by the quarter.  ( An audit of Fort Knox gold would provide the same result! )

I guess there was a Fed-Speak Leak in the Wall Street Journal today about the Bernanke Federal Reserve gradually pulling back the punchbowl (one the size of Yankee Stadium!) of ZIRP Money by fits and starts depending on market reaction is an attempt to quell the growing rumbles of dissatisfaction with Fed monetary policy.  I think that even a 3-year old would know by now that printing money to keep interest rates artificially low to attempt to stimulate moribund economic growth in a debt-collapsed economy just does not work.  There is little demand for credit at any price when consumers, 70% of our maladjusted economy, have debt coming out of their ears.  But I think the bond market is going to take the Monetary Responsibility Ball away from the Fed and force the issue, Dove or Hawk sitting in the Fed Chairman's or Chairperson's seat.  I am watching the 10-year Treasury Note yield getting ready to pierce the whopping 2% threshold again and think that the turn in interest rates upward has already begun ANEW.  Pretty sure that Bill Gross of PIMCO has come to this same conclusion.  Markets as big as the Treasury market don't need a Fed Chair-whatever to tell them where bonds or notes should be priced.  Debt markets have always been very diligent at setting prices and, hence, yields, and it is only in recent times that Sovereign Governments thought that they were smarter than $Trillion markets at setting interest rates.  I really think a Global Bond Market Panic in 2013 is going to take the ball away from Central Bankers, and put some more rationality back in the setting of debt prices and yields.

IT WILL BE A LOSS OF CONFIDENCE EVENT THAT SHAKES BOND INVESTOR'S ABILITY AND DESIRE TO LEND ENDLESS SUMS OF DOLLARS, OF YEN, OF EUROS, OF YUAN, AT RATES THAT FUNDAMENTALLY DO NOT PROVIDE ANY CUSHION FOR THE REAL RISKS OF BEING A LENDER.  We now know that default risk exists for sovereign debt, just ask Greece debt holders that got pennies on the dollar for owning this toxic paper.  So default risk gets priced back in, then comes devaluation risk since every country has an unpublished goal to devalue their domestic currency in order to attempt to save any remaining export industry AND TO MAKE GOVERNMENTAL DEBT SERVICING EASIER WITH DEVALUED DOMESTIC CURRENCY.  The currency wars are already well into their 3rd innings, just take Japan as the Devaluer in Chief.  Now add in a dash of Inflation Risk since only Bernanke and Obama have been able to keep their own costs of living at 2.5% over the previous year, no one else.  Tax increases that do not show up in the CPI or other gauges of inflation are going to continue in 2013 to bite consumers in their wallets, and broke governments are desperadoes that will suck the last drop of blood out of their victims even if it extinguishes them ( the victim, not the governments ).  I would say that Americans are going to be faced with at least a 5% reduction in after-tax income in 2013 even with the top line of Gross Income staying flat as it has done so well for the last several years.  Add in another dash of State and Local tax increases with my beloved Virginia Governor raising the Sales Tax to 5.3% for the majority of Virginians from 5.0% on July 1st.  I think he eliminated the VA Excise Tax on gasoline at the same time, but you would have to be driving around all the time and sleeping in your car to break even on this one.

 

Mix this witches' brew slowly over a raging Monetary Fire where the Fed tries to reverse decades of monetary heroin injections with a twinge of monetary drug withdrawals to keep American Seniors from storming the palace, and VIOLA.  The Gates of Monetary and Economic Hell have opened!!  A crash or panic is a'coming in 2013.  If I am too early, then you get your subscription money back in Japanese Yen.

Okay, now for the part you have been slogging through this tirade for:  GOLD AND SILVER HAVE BOTTOMED AND ARE "BUYS" NO MATTER WHAT THE NIGHTLY NEWS TELLS YOU ABOUT SOME PRECIOUS METALS BEAR MARKET.  Ain't no bear market sports fans because we have seen both metals do 20% retracements and more time after time during this bull market and prior ones, and the trend of the super bull soon resumes.  We are on the cusp of that resumption of the upward trend.

Why?  Physical demand is off the charts, and the paper shorts have now been dominated by the Speculator category of COT report statistics and these Johnny-Come-Lately are seldom if ever right.  But it is the elimination of physical gold and silver from the warehouses of the Comex and the LBMA that speaks volumes about the unfolding change in the mechanism for price setting in these two critical monetary metals markets.  At a time in the not-distant future, probably by early Fall, the physical stocks of both Gold and Silver at these two major price fixing arenas will be so low that futures contracts will no longer be allowed to be settled in physical gold or silver.  The futures exchanges will no longer serve as a convenient and economical means for taking physical possession of either gold or silver.  A cheap financing mechanism in effect will no longer exist.  AND ONCE THE EXCHANGES BECOME CASH-SETTLEMENT ONLY WITH 100% MARGIN ( ask Jim Sinclair to explain that one, haven't figured that out yet except that the exchange will not offer financing any longer through margin ), THE FUTURES EXCHANGES WILL CEASE TO BE THE PRINCIPLE SETTERS OF PRICES IN EITHER GOLD OR SILVER BULLION.  Volume will recede substantially for these rule-bending, insider-trading floor shows and it will be Spring again in the Arctic.  And the Obama Administration might even provide a morsel of truth at a press conference!!!

 

Price will be set between Central Banks, large private sales, and through an internet based trading system that will give real time bids and asks to any bullion participant around the globe.  "Change we can believe in" is really coming this time!  Where have I heard that before?!!!  Not sure how this will all work out, there are more knowledgeable guys out there on this topic than the Sage, but the panic move a la Goldman and Morgan with New York Fed financing to shake investors' confidence in Gold and Silver as Dollar Substitutes has backfired like a Hellfire missile.  Perversely, the April 12th and 15th take-downs of both Gold and Silver through massive short selling sanctioned by the Comex and the London exchanges was actually a death knell for the survival of such price-fixing operations.  Notice I did not say price-setting operations!!!!  Why would physical demand surge as the price falls precipitously over just a two-day period??!!  There is no lack of demand for both gold or silver; buyers were just waiting for a lower entry point after 2011 peaks of $1920 for Gold and $49 for Silver.  Buyers are swarming bullion dealers all over the world to get rid of currencies that they know are headed for much, much, much lower levels of Purchasing Power.  Bullion on the physical front, if sold at all, and WCM has had zero buy-backs of either gold or silver since April 11th, just went from weak hands to strong hands.  Expect prices to recover shortly and set new highs by summer of 2014.  Price action has been very favorable of late, and morning sell-offs are usually met with afternoon recoveries.  Not the sign of a bear market at all, just the reverse.  And Jim Sinclair has said that the lows are already in, so send him the hate mail if this does not prove to be true. 

BUT GET OUT OF ROTTING DOLLARS BEFORE THEY STINK UP YOUR NESTEGGS AND GRAVELY COMPROMISE YOUR FINANCIAL WELL-BEING.

Backlogs remain in most WCM Silver products but we work them down like beavers building a dam.  THE END IS HERE.  Slovakia is about to hurl a financial bomb into the complacency of the Global Bond Village.  May not be that tiny country, my apologies in advance to its countrymen and countrywomen, but it will be a sovereign government default that triggers the maelstrom that will come to be known as the Sage's Panic of '13.  Guaranteed or you get a free trip to Buffalo in February of 2014, free peanuts included.  Lock and load.


THE SAGE OF WEXFORD, windy as ever, but confident as ever in what he speaks.

 

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