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Regularly Updated Commentary on Gold and Silver Bullion Markets


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.

 









October 17, 2011:  Precious Metals Bull Just Grazing In The Pasture Gaining Strength For Next Rally Phase.


I thought I would break with tradition today and start my ezine with a discussion of the precious metals.  I get so worked up with the political crap that has engulfed our everyday lives that I very often vent profusely in introduction and have little steam left for discussing the most precious of the metals, Gold and Silver.  I think with every ounce that I sell of either metal in the future, I will include a box of Pampers and a fishing rod so that my clients are better able to cope with the vicissitudes of these two increasingly popular commodities necessary for a healthy life.  The fishing rod is better than prescription tranquilizers in soothing your nerves and keeping your eyes off the minute-by-minute price charts of the precious metals.

BUT EXPECT GREATER VOLATILITY IN THE PRECIOUS METALS IN THE WEEKS AND MONTHS DIRECTLY AHEAD.  THINGS ARE ABOUT TO GET VERY NASTY IN THE FINANCIAL MARKETS AND THE ECONOMY, NOT JUST STATESIDE, BUT GLOBALLY. 

But the trend is your friend and we remain in a very powerful long-term Bull Market in both Gold and Silver.  Stay the course and sell the vacation home to buy more on dips like we just had.  Conviction must last two decades in here, not just months and years.

When silver investors, for example, start looking for the nearest cliff to end it all over, after a 25% CORRECTION in a matter of days, one has to step back and realize that in the Fall of 2010, silver was still trading around $23 per ounce.  Seems like we are in a consolidation zone right now from $28 to $32 per ounce, so a 30%ish increase in just a year's time is nothing to sneeze at and should keep you a safe distance from that perilous cliff you just discovered via Google.  Compare this return to what your friendly (or unfriendly) banker or money market is paying you right now.  Hard to save for retirement or anything else at interest rates under 1/4 of a Percent, especially when the Pump Priming by global Central Bankers has caused food prices to rise so quickly you are tempted to pull an Occupy Wall Street and campout in the fresh produce, diary, or cereal aisles.  Although Greenspan and Bernanke have damaged both the economy and financial system of our once-great nation during their tenures, us Precious Metals Owners are deeply in their "debt" for attempting to inflate the United States AND THE WORLD out of the Greater Depression of 2008.

 



And don't forget that Gold was trading at $1320 a year ago, so today's $1670 price per ounce still nets long-term holders a fine inflation-beating 27% gain.  Now the Comex is on a mission to stamp out speculation in the futures pits by increasing margin requirements once again for both Gold and Silver, BUT DURING A PRICE DECLINE, NOT A PRICE SURGE!!!  What about the U.S. Treasury Bond market ........ oh ever-so-vigilant overseers????  If there ever was an accident waiting to happen it is in intermediate to long-term bonds, especially U.S. Treasuries and secondarily Corporates and Municipals.  Since Harrisburg, PA just filed for bankruptcy last week, expect more and more municipalities to follow this route to avoid outright fiscal collapse and preemptive take-over by State governments.  With U.S. inflation north of 9% as my nimble digits fly across the keyboard, don't us Peons need at least 10% interest on our money to stay even, much less ahead?????!!!!!  Cash is trash, but keep some buried in the backyard for the inevitable Bank Holiday that is not far away.

Please also realize that Gold is a First Tier Monetary Metal ( FTMM ), so with new central bank buying, which I predicted over 7 years ago on these electronic pixels, the correction in Gold from $1920 to $1595 represented a 17% pullback, roughly 50% less on a percentage basis than Silver's 25% correction.  Silver may be considered a Second Tier Monetary Metal ( STMM ) for the purposes of future central bank reserves that will be necessary to restore sorely lacking confidence in fiat, paper currencies within the next decade or so.  Silver is also a thinner trading market, so it doesn't take as many contracts from JP Morgan or Goldman-Sachs to whack the metal southward AND it happens to have the massive short position owned by JP Morgan that requires fainting spells so that the bank's officers will get their next paycheck, much less any bonuses this year.   Is it any wonder that Occupy Wall Street is full of citizens who feel disenfranchised from the rewards of investing??!!!  But JP Morgan's day of reckoning regarding its massive short position in Silver is fast approaching as the political winds blow against the Wall Street Thugs, who regardless of political contribution truckloads sent to Washington for 2012, will lose tremendous political influence in the months and years ahead.  Another Sage Prediction that you can bank on.  Wall Street has now become a very convenient Political Whipping Boy for politicians who fear being in the unemployment line in the not-too-distant future.  Many will make it into that line regardless.

 



NewsFlash:  The S&P 500 at 1205 right this second was at 1186 one year ago.  That is a whooping 1.6% return, or some  7.4% under the U.S. inflation rate of 9%.  How is that asset class working out for you Baby Boomers like me out there who want to avoid being a Wal-Mart Greeter at age 80???

CREDIT AND DEFAULT RISK ARE COMING TO A BOND YIELD NEAR YOU.  Uncle Bernanke, who will be fired 10 nanoseconds after Barack Obama is thrown out of the White House in January, 2013, is serving no one with Zero Interest Rate Money in the United States.  Even if the banks could afford to take the risk of lending money out of their vaults, WHO THE HECK IS CREDITWORTHY ENOUGH TO GET A BIG LOAN TODAY AND WHO THE HECK IS IMPRUDENT ENOUGH TO TAKE ON MORE DEBT WHEN THE TREND IS TOWARD DEBT LIQUIDATION AT THE CONSUMER LEVEL!!!

Anyone still doubt that hard assets such as gold and silver are the enemies of bankrupt governments who are threatened by their substitution for freshly-printed currencies and Sovereign Debt as stores of wealth?!!  While the Nymex/Comex can attempt to put a lid on PM prices during a portion of the 23-hour trading day, this is a global market for Gold and Silver, and as I have said until I am purple in the face: 
THE DEMISE OF THE STATUS OF THE UNITED STATES WILL INCLUDE A DEMISE OF AMERICAN TRADING EXCHANGES ON THE PRICE DISCOVERY MECHANISM FOR ALL ASSETS TRADED.  Wall Street may have a bunch of  1960's hippie throw-backs / prodigy camping out on their front lawns today, but it will be more and more Wall Street employees that will be camping out on their own front lawns tomorrow as in the movie, "Everything Must Go".  Will Ferrell was a beer alcoholic in this tragic comedy, but the Wall Streeters are addicted to Unprecedented Leveraged Speculation, unearned compensation, and outright fraud when it comes to full disclosure of total risk pertaining to their Designer Securities peddled across the globe to widows and orphans.  MAIN STREET IS ENTITLED TO BEING MAD AT WALL STREET.  Where are the bail-outs for the man or woman on the street???  Oooppps.  The piggy bank is broken.  Europe has just come to this realization also regarding its own PIIGS and ALL EUROPEAN BANKS.

( SEE HOW THE SAGE IS CONSTANTLY DRAWN INTO THE POLITICAL MAELSTROM OF 2011 IN HIS DISCUSSIONS OF THE PROSPECTS FOR GOLD AND SILVER GOING FORWARD!!! )

While the Lefties are going to pour money and support behind the Occupy Wall Street "mobs" in the classic me-too, me-too of flailing, failing politics of money looking for a cause, some of the biggest contributors to the Obama Administration's coronation have been the targets of these disenfranchised groupies, i.e., WALL STREET.  Watch a finally coherent message come from near-term interviews of participants as the Union and Move-On.org monies and infiltrators flow into the sea of unwashed or poorly kept demonstrators who should have a shovel-ready job by now.  The Tea Partiers, who at least did not offend the olfactory nerve by wearing clean clothes while in public and never were documented as either spitting on or destroying anything or anyone, were previously referred to as terrorists and unruly mobs by many elected officials in King Obama's Court, esp. former Speaker of the House, Ms. Nancy Pelosi.  Both Nancy and Hillary Clinton really need a new line of make-up these days since the Fall From Power and the Rise To Power, respectively, are having adverse effects on their television persona's.  Not a sexist comment, just an observation from a homo sapiens, many women I know have made the same observation.

Remember the Disney cartoon movie, "Ferdinand The Bull"?  He was such a gentle creature that they just couldn't get him mad enough to participate in a bull fight.  He pranced around the flower-filled meadows like a hoofed bumblebee, until he got stung by one.  Then he snorted, figuratively breathed fire, and charged at anything that moved.  That is our current beloved bovine, the Precious Metals Bull.  He is so good-tempered right now even with the Comex sticking sticks in his eye, that he cannot see the big, bad Bumblebee coming to set him on fire again.  Here are just a few Bumblebees buzzing around out there to reignite our most beloved Bull:

 


1.  The Nitely News decides to report the real state of the economy and it is clear to everyone with a Third Grade education that The Double Dip Is Here.  ( Antidotal Evidence from The Sage:  Just got a UPS package this Monday PM that was ordered on Friday from a company in California.  Transit and processing times for retail orders have shrunk to days from weeks. )  THE RETAIL SALES GAIN JUST REPORTED WAS ALL SEASONAL ADJUSTMENT, NOTHING ELSE, NO LIE.  Great work if you can get it.

2.  Germans decide that their Teutonic Heritage is more worthy of preservation than preservation of the Euro, and they vote NO! on bailing out more PIIGS that can't fly.  EURO may survive but it will be a much thinner version with fewer, more solvent participants.  Dollar has benefited from EuroMalaise of late, but that jig is just about up also.  The Sage  not buy, however, the requirement for the Dollar to decline for the Precious Metals to ascend.  The Dollar is toast anyway you slice or dice it, just a question of when it ends up in the Fiat Trash Heap of History ( FTHH ) ......... Gold and possibly Silver will be called upon to back-up the New Greenback when it is created.

3.  The default of Greece is only days, maybe some 9 days, away and the European banking system will come to the brink a la 2008 bringing down the U.S. banking system with it.  The Eight largest banks in the United States will subsequently have to be restructured using Private Funds, not Public.  Occupy Wall Street will turn into Obliterate Wall Street if any substantial taxpayers monies are used to restructure these banks.  This is what should have been done in the first place back in the Fall of 2008; risk-takers must fail if they make stupid, imprudent, greed-induced decisions to include A.I.G., Chrysler, and Government Motors.  No other long-term approach will preserve American Capitalism Principles ( ACP ) that once led us to greatness.

4.  Congress and the White House continue to be at loggerheads concerning government spending and taxation and another Government Shutdown Possibility is right around the corner.  Americans and our trading partners lose faith in America's will to get its fiscal house in order, we get another downgrade in our credit rating but from all three rating agencies this time, and the sale of U.S. Treasuries, both freshly-printed and secondary-market, suffer from a lack of bids with yields having to rise sufficiently to attract new suckers, I mean investors.  China uses selling points all over the world to unload as many Treasuries as possible under the radar.  Currency Manipulator Legislation from U.S. Congress more than poorly timed.

5.  Large States such as California and Illinois become insolvent and have difficulty selling new bonds at any price or yield.  Greek Contagion has come full circle, and public-service employee layoffs soar along with disorderly demonstrations and sit-ins.  Services are cut while tax increases are passed at the local levels upon a populace that already can barely make ends meet.  Civil unrest spreads to the taxpayer level with the escrowing of tax payments awaiting reform gaining in support and practice nationwide.

6.  The S&P 500 confirms its renewal of the 2000 Bear Market with a close below 1100 as quarterly earnings are replete with losses and missed guidance, Europe implodes at the Euro, ECU, and bank levels, and bond yields rise to more correctly reflect default and credit risk, not to mention inflation risk, AND STOCKS CANNOT TAKE THE COMPETITION.  An economy re-entering a Depression it never left without fudged inflation adjustments is not going to produce 15% to 20% year-to-year profits growth as the market is priced right now.  Expect corporate earnings by 2013 to show negative comparisons to prior even with U.S. Bastardized Corporate Accounting ( USBCA ).  500 to 430 on the S&P 500 here we come.

This is only 6x Bumblebees to put PM Bull into charge mode, I am sure either you or I will come up with 5 more by breakfast time tomorrow.  Me the Humble Sage thinks it is only days, not weeks, before a bumblebee stings.

WELCOME TO THE LOSS OF CONFIDENCE PHASE OF THE GREAT DEPRESSION OF 2008.  IN TIMES OF DISRUPTION TO THE FINANCIAL, ECONOMIC, POLITICAL AND CIVIL STRUCTURE OF ANY SOCIETY, GOLD AND SILVER HAVE PROVEN THEIR METAL.

Don't be a market timer in here!  I have told you this for the last decade plus.  I just bought some more Silver this morning and watched the price go down 50 cents after doing so, but to coin a phrase from Alfred E. Newman, "What Me Worry?".   Would rather own it than chase it or not be able to get it at any price.

 


Delivery times are going further out as demand soars during this "correction" with 3 to 4 week delays common, premiums at the refiner/mint levels are going up, and it will be more difficult with time to buy the amount of both Gold and Silver that you want to buy in a timely, cost-effective manner.  Sit on the fence or market time at your own peril.  Rocket ships are hard to mount by earthlings once launched skyward.  Bucking Bulls even more so.

And this is no bull.


THE SAGE OF WEXFORD, right on about Gold and Silver for over 15 years now.



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December 7, 2011:  THE SHIP OF FOOLS HAS RUN AGROUND.


One can't help but feel both the emotions of disgust and depression at the Current State of Affairs.  No, I am not talking about Herman Cain's alleged misdeeds, but what passes for governance in the World today.  For European bond investors to reduce Italian bond yields at auction merely due to a pledge by Sarkozy and Merkel to strive for more central Brussels control over miscreant EU member state budgets and spending is a bridge to nowhere.  If the United States stands little chance of getting a constitutional amendment requiring a balanced Federal Budget each and every year, good luck with getting acceptance by Greece, Italy, Spain, and Ireland where austerity measures are already causing riots in the streets.  While we have 50 States to present the proposal to, the European Union has but 17, BUT OF DIVERGING AND HISTORICALLY UNIQUE DIFFERENCES OF PRIORITIES WHERE LANGUAGE AND CULTURAL FEATURES ARE MORE FRAGMENTING THAN UNIFYING.  We supposedly speak one language, English, in the United States, but language is only one element of differences between increasingly torn members of the Euro countries.  And if France wants to wait until June of 2012 to attempt ratification of these proposed Euro Treaty changes, Rome will have burned to the ground along with most of its countryside by then.  THERE ARE NO PROPOSALS ON THE TABLE THAT WILL SOLVE EITHER THE EUROPEAN OR AMERICAN CRISES OF
TOO MUCH FRICKING DEBT THAT WILL NEVER BE REPAID.  THERE IS NOT ENOUGH TEA IN CHINA TO COVER THIS EVEREST OF DEVELOPED (?) WORLD DEBT!!!

Now Ben Bernanke, just like his predecessor Alan Greenspan, has some distorted notion of his ability as Fed Chair to put out every global financial fire with buckets of freshly printed Dollars, BUT NEAR-TERM LIQUIDITY IS ONLY ONE ASPECT OF A MUCH BIGGER LONG-TERM SOLVENCY ISSUE FOR HIS LUCRE RECIPIENTS.  Bennie Boy is like the Little Dutch Boy that races to the compromised dike with a bottle of Elmer's Glue instead of buckets of quick setting mortar.  Actually, there is no mortar in quantity enough to plug the Broken Dikes of World Insolvency.  THE TENS OF TRILLIONS OF DOLLARS OF DEBT COMING DUE IN THE NEXT 18 MONTHS IN EUROPE AND THE UNITED STATES ARE JUST TOO HUMONGOUS TO BACKSTOP.  Only time and massive defaults can stop the tidalwave of global financial insolvency.  THE UNITED STATES FEDERAL RESERVE WILL BE REINED IN UNDER ANY NEW ADMINISTRATION IN THE WHITE HOUSE AND CONGRESS IN 2013.  The frightening question is how much additional damage an uncontrolled Fed Printing Press will do in the interim.  Does Bernanke have any grandchildren that will be stuck with the towering bill he is creating for generations to come?????????????????


 


Courtesy of http://www.jsmineset.com/



Don't you feel all warm and cozy inside knowing that your very own Central Bank is creating liabilities known as Dollars out of thin air in the $Trillions on an annual basis, literally giving them away at interest rates a fraction of what they should be to COMPROMISED OR INSOLVENT BORROWERS, and never telling you the American People that these Dollar Swaps or Loan Facilities may create $Trillions of losses for American generations to come AS EUROPE IMPLODES FINANCIALLY AND EVENTUALLY ECONOMICALLY. 
Confidence in the United States Federal Reserve AND THE UNITED STATES GOVERNMENT is rapidly waning as one failed attempt at saving the economic and financial system of the world proves to be short-lived in effect and TOTALLY INEFFECTIVE IN RESULT.  We are in a time warp right now as world events will occur in increasingly more rapid succession entering 2012, bringing the very real end-result of systemic collapse to a venue near you.  Yes, Systemic Collapse is what we are facing now due to The Ship of Fools, just ask Jim Rogers or even George Soros.  HAVE 3-MONTHS OF LIVING EXPENSES BURIED IN A MAYONNAISE JAR IN THE BACK YARD BECAUSE A 60- TO 90-DAY BANK HOLIDAY IS ACOMING.

Now enter S&P, a rating agency that has been slow-on-the-draw to make ratings changes as everyone but Santa's Elves knew of the rapid development of compromised credit conditions of a multitude of borrowers, Stateside and across the globe.  Including France and Germany in a 17-count list of potential AAA & AA has-beens, S&P throws cold water on the EURO SALVATION CROWD with a dose of financial reality:  Even the Teutonic Bastion of Fiscal Soundness, Germany, with a debt to GDP ratio of 200%, is not immune to getting a much deserved down-grade in its credit rating.  Especially if Reich Minister Merkel is proposing some form of Euro Slush Fund to attempt to save the proliferate spenders of Europe from themselves and effectively putting the citizens of Germany on the hook to bailout the bankrupt Southern and Western European countries.  Financial, and hence, economic reality is seeping into the trading markets for European Sovereign and Bank debt at an accelerating pace.  The credit markets get it first, the equity markets next.

Once confidence is shaken in credit markets, it can take years and years to restore same.  Just ask any country that has defaulted on its debts to foreign creditors as to how many years it took to get back to manageable, serviceable interest rates.  Now it is up to Moody's and Fitch's, two more slow-on-the-draw credit rating agencies, to ante up to the bar and downgrade the United States in step with S&P's earlier downgrade. 
IT IS INEVITABLE, REGARDLESS HOW RETICENT THE GRADING AGENCIES MAY BE TO AVOID A POLITICAL HAILSTORM ( and even more profit-killing regulation ), FOR THE UNITED STATES AND EUROPE TO APPROACH THE JUNK STATUS OF SOVEREIGN DEBTORS.

The current ratings on the entities in question is a joke, and if the agencies want to remain germane and even marginally profitable, they will swallow the bitter pills of Sovereign and Domestic Bank credit downgrades.  THIS NECESSITY APPLIES TO BOTH U.S. AND EUROPEAN ENTITIES, SPORTS FANS!!  Of course, our Miscreant Congress will attempt to put them in the slammer for finally doing their jobs, but there is plenty of room there also for Congress.  How about that Pelosi Insider Trading scandal!!!  I have sent Nancy the unlisted phone number for Martha Stuart who can give her some knitting tips for Nancy's upcoming stay in West Virginia.  And Nancy, your last face-job pulled things a little too tight!

$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$


Now on to Gold and Silver.  Many investors seem enamored with the recent rally of the stock market back above its recent trading range highs, but it is a FOOL'S RALLY.  To think that European leaders, or American leaders, if we have any!, can solve the current DEBT COLLAPSE VIA EDICT OR MONEY PRINTING GETS ONE A FIRST-CLASS CABIN ON THE SINKING SHIP OF FOOLS.  Hope springs eternal in the hearts and minds of stock investors that think somehow, some way, we will avoid hitting the rocky shoals of financial and economic meltdown with one tidbit here, one flotsam there of better-than-expected economic news or more sound-and-fury of reform out of European leaders.  The European cow is not only out of the barn, EuroDaisy was last seen climbing the Matterhorn.  We are firmly within the grasp of a multi-decades-long DEPRESSION and only time and debt dissolution will get us out.  Very simple.  But the U.S. economy is no beacon of light on the horizon for the wallowing vessels of foreign lands, because Americans and the American Government have feasted at the trough of Public Largess and Entitlement for over 50 years now AND WE ARE LISTING BADLY TO PORT.  (That is the LEFT side of the ship!).  Such an imbalanced vessel cannot steer straight and certainly is in no shape to navigate the dangerous shoals the Ship of State is caught within.

Although my gut tells me that some major sovereign, economic, or financial entity is going to founder sooner rather than later to cause chaos in the markets, we can set a horizon of Spring of 2012 as a end-post in our planning.  Both gold and silver are being wound up like tightly-wound springs, not susceptible to panicked selling due to exploding global demand, forget the defunct trading venues such as the Comex.  The MF Global failure is a fatal arrow in the raison d'etre for the Comex and this exchange will never recover from the failed supervision and oversight of one of its major trading members.  If one thinks that both Gold and Silver will fall 40% along with a 70% decline in stocks and a 50% decline in bonds in the very near future, then by all means stay in cash under the mattress ...... not in a bank or money market that pays you 0.15% to 0.30% per annum.

I have watched markets for almost 40 years now, and I know technical strength when I see it.  Gold and Silver trading since the end of summer are eliciting all of the traits of markets that are merely consolidating for their next moves higher.


 

TAKE THE LONG-TERM VIEW IN INVESTING AND YOU WILL SEE MORE CLEARLY THE INTACT UPTRENDS IN BOTH PRECIOUS METALS!  Note the ascending wedge pattern building in Silver.  Jump on the train, because a speeding train is tough to jump on.  BACKLOGS ARE ALREADY COMING BACK IN MOST BULLION PRODUCTS.

The differences today in the bullion investment landscape versus October of 2008 are striking.  Investors have seen Government and Central Bank efforts to revive domestic economies and financial systems fail.  Americans have nothing to cheer about when their Government tells them we have made money on this TARP program or that, because there are many programs used to bail out financial entities in the United States and Europe that We The People do not know about and that will almost surely fail to return principal to the American taxpayer as a financial collapse occurs.  And these clandestine programs are in the $Trillions, not in the $100's of Billions as existed under Paulson's tenure.  Government Motors has proven to have been a bad investment for the American taxpayer, not only as the much-beloved-by-Obama Volt catches fire under load, but $Billions are lost on stock sales of GM on behalf of us-little-ole taxpayers.  AIG is still an accident waiting to happen, the final chapter has not been written yet.  The FHA has become the Fanny and Freddie of the Obama Administration, effectively guaranteeing many new residential mortgages.  See, We The People continue to go into the hole of blackest Public Debt even as we struggle to reduce our Private Debt.

Faith in Government and the U.S. Federal Reserve is not what it was in the Fall of 2008.  Hard to believe that U.S. Treasuries will cop a bid this time around as the Safe Haven of Choice.  These compromised CCC promissory notes barely pay for the electricity to place the order for them online.  Placing my bets on Gold and Silver being those safe havens! 

The debasement of currencies, sovereign debt, bank debt, and most paper assets is well underway and on an unprecedented scale.  Desperate governments and Central Banks are doing desperate things that only guarantee greater insolvency of the issuing parties in the future.  No solution has been found for the Debt Collapse of 2008, we are merely in a new phase of it, a much more dangerous phase where printing money seems to be the path of least resistance and the hard political decisions are delayed indefinitely, i.e., the Congressional Super Committee.  People who have never even thought of Gold and Silver as alternative investments are buying bullion in size and on a regular basis.  The mindset of investors is much different than in the Fall of 2008, redemptions from stock mutual funds over the last 3 years is just one example of abandonment of traditional investment avenues, partly out of lack-of-trust and partly out of Total Lack of Performance for the last decade for equities.  Scandals on Wall Street, with former NJ Governor Corzine's complicity in the disappearance of $1.3 Billion in client monies the most telling recent example, have created a "Them Versus Us" mentality with investors.  Hence, Occupy Wall Street makes a curtain call.  The entire financial system, to include intermediaries such as MF Global, has grounded on the very rocks that they once could maneuver around with ease as regulators watched with half-closed eyes.

Many European banks are on the brink of failure as I type.  HENCE THE UNAUTHORIZED, PANIC MOVE BY THE FED TO PROVIDE DOLLAR SWAPS AT INTEREST RATES SUBSIDIZED BY THE AMERICAN TAXPAYER.  Their balance sheets are leveraged some 26 to 1 compared to U.S. bank leverage in the 13 to 1 range, both exposed to evaporation of equity positions with 4% to 8% revaluations of Assets Held.  Revaluations of CDO's and CMO's on their books, NOT TO MENTION EUROPEAN SOVEREIGN DEBT, an event that may well be forced by the markets and/or the naughty Credit Rating Agencies in the near future should pretty much do the trick.  It is just a matter of what rock hits the hull of the European Bank Ship ( EBS ) in question, not if or when.  We did not have the European Situation in the Fall of 2008.  It is here now with a vengeance and getting worse by the day as the Eurocrats fiddle with makeshift "solutions" and debt payments across Europe come due every month.


 


Courtesy of Phoenix Capital Research
http://www.gainspainscapital.com/
...... an excellent market commentaries source!



THE PERFECT FINANCIAL AND ECONOMIC STORM IS HERE FOR BOTH GOLD AND SILVER TO PROVIDE A STORE OF WEALTH IN A TIME OF UNPARALLELED WEALTH DESTRUCTION.

NEWSFLASH:  THERE HAS BEEN NO ECONOMIC RECOVERY SINCE THE 2008 RECESSION BEGAN.  FUDGED GDP DEFLATOR NUMBERS FROM THE BUREAU OF LABORED SCAMMING ( BLS ) HAVE BEEN SUPPRESSED TO NOT SHOW THE 9% TO 10% INFLATION THAT EXISTS IN AMERICA AT THE CONSUMER LEVEL.  ANALYSTS THAT STATE THAT INFLATION IS WELL-CONTAINED MUST HAVE THEIR WIVES DOING ALL OF THE SHOPPING.  Does Ben Bernanke ever do the shopping for his family??

THE SAGE OF WEXFORD, Merry Christmas To All and To All A Good Fright.


P.S.  Check out the Sage Predictions in December, 2010 for Gold and Silver for interim 2011:  $1755 for Gold and $42.75 for Silver, what a genius!!!  Then I got carried away and gave new targets for 2011 of $1835 for Gold which did rise to the occasion and bested my forecast by closing in London at $1895 on September 6th.  Now my second/follow-up forecast for Silver of $57.20 has not been achieved yet ....... BUT THE SAGE'S CRYSTAL BALL SAYS WE WILL HIT THAT LEVEL BY APRIL 15th, 2012.  No guarantees, but am accepting Xmas gifts of gratitude for those of you who benefited greatly by my Sage advice.  Could use a new BMW to adorn the driveway!  Stockings of coal also accepted, I will forward same to Congress and the White House AND TO THE BULLION NAYSAYERS.



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February 13, 2012:  Already Over The Edge Of The Cliff, FORGET ABOUT TEETERING!


I did not wake up this morning and exclaim, "Hey, let's write the bullion ezine today!".  One definitely has to be in the mood to sit down to the keyboard and spew forth the venom that is in my heart regarding the STATE OF OUR WORLD.  Well, thank you Prez Obama for putting me in the right frame of mind with Obozo's 2013 Budget Proposal that once again will be Dead On Arrival in Congress this year.  Thank God.  I feel more like Lewis Carroll getting ready to write another bizarre chapter of "Alice in Wonderland".  These goings on will make for great movie fodder once potential viewers have scrounged enough "money" that may be left over from the Debt Collapse to afford an already inflated ticket.

The first thing I did before even getting a cup of Java was to call my broker (fictitious stuff indeed!) and order several Hundred Thousand Dollars of Greek bonds now that Athens has made another "PLEDGE" to tighten its belt tighter to squeeze out more largess from the populace that has been laying around on easy street for the last 20+ years.  I do like the Greek tradition of not paying taxes, so there are some vestiges of reform already in place in Greece!  We now have another technical indicator out there for you speculator/trader types:  THE POPULACE RIOT INDICATOR.  Comprised of a burning object smoke indicator developed by NASA that needs something to do, broken glass indicator, incarceration count indicator, flag burning indicator, etc., this composite of civil unrest registered about a 7.5 ( out of 10 ..... for civil war ) in the streets of the Greek Theater today.  Since we have seen previews of these events in Madison, WI and Oakland, CA in the United (?) States, we should not be surprised by their intensities and frequencies in the months and years directly ahead.  This form of entertainment by the unemployed and underemployed will be coming to a theater near you; I forecast this with a heavy heart because I am tired of moving.

Before going too much further afield in my ranting and raving, let me just say that one event that stands out from last week came from an acronym that most investors are becoming familiar with:  ISDA.  No they do not inspect food products consumed by the Wall Street Elite.  ISDA stands for the International Swaps & Derivatives Association that has now solidly placed itself in the Financial Hall of Shame along with Fannie & Freddie, AIG, Government Motors, all of the credit "ratings" agencies, the Comex and CFTC, Congress, the White House, and the Alan & Ben "loosey goosey" monetary tag team.  Did you know, and I am not making this stuff up, that a failure to meet contractual debt obligations through timely and complete payment of interest & principal on a Sovereign Debt Issue ( such as that of GREECE ) is not deemed a DEFAULT for the purpose of triggering insurance pay-outs of Credit Default Swap contracts WHEN A 70% PRINCIPAL HAIRCUT IS FORCED UPON PRIVATE INVESTORS BY GOVERNMENTAL & NEGOTIATING AUTHORITIES??!!

In this episode from the Tea Party with the Mad Hatter, since investors are agreeing to do so ONLY with a threat of Governmental retribution and/or an eventual 100% Haircut, A VOLUNTARY ACCEPTANCE OF 30% ON THE DOLLAR OR DRACHMA OR EURO DOES NOT TRIGGER THE DREADED "D" WORD OF
DEFAULT!

So I ask you:  WHAT THE HELL ARE CREDIT DEFAULT SWAPS GOOD FOR ANYWAY EXCEPT TOILET PAPER FOR THE AUTOCRATS!  If these contracts are triggered for pay-out, which of course will bankrupt any and all issuers such as Bank of America, JP Morgan-Chase, Goldman Sachs, Euroland's major banks, etc., etc., etc., then who in their right mind would ever buy such a contract AND MUCH LESS THE SOUTHERN EUROPEAN DEBT THAT THIS WORTHLESS PAPER IS SUPPOSED TO INSURE DEFAULT AGAINST!  The PIIGS are going to the slaughter house eventually, they just got a detour given them!  So Puff the Magic Dragon, Trillions of Dollars and Euros of Derivatives have just become worthless paper like those millions of mortgage loans sitting on the books of banks and governments and central banks around the world.  With the stroke of a pen.  With the change in the definition of one itsy bitsy word:  DEFAULT.  Great work if you can get it, being a financial instrument wordsmith, BUT WHO OUTSIDE OF THE MAD HATTER HAS ANY FAITH IN ANY FINANCIAL INSTRUMENT TODAY???????????!!!!!!!!!!!!!!!!!!!!!!!!!  No honor among thieves.

This is like telling Dollar Holders that instead of getting ONE DOLLAR worth of goods and services with a Greenback today, you are only going to get 30 CENTS WORTH!  And the insurance you paid for to guarantee a full buck's worth of commerce, is not going to pay you ONE RED CENT FOR YOUR TRUE ECONOMIC LOSS.  Please pass the teapot.

Ah, isn't the Loss of Confidence Phase to the Greater Depression such an interesting place to be in history.  That is just one reason that the Sage knows, not thinks, that we have gone over the cliff to economic and financial system collapse and are flailing our ways ignorantly to a very painful bottom of human experience.  Now, if you have been savvy enough to read my ezines over the last decade plus, you cannot be labeled IGNORANT OF THE FACTS.  I may not have had perfect timing in my predictions, but the events that I began forecasting since 1999 have occurred in spades and to degrees not even dreamt about by the Sage.  Nor have you been left financially unprepared for today's dire events, since I know that you are sitting on piles of Gold and Silver with a colorful smattering of Fancy Colored Diamonds that make great travel companions.  If I don't say so myself, and I am reaching to pat myself firmly on the back, with some difficulty I might add due to my overly muscular arm: 
THIS EZINE SHOULD HAVE BEEN ONE OF THE BEST INVESTMENTS OF TIME THAT ANYONE COULD HAVE MADE PRIOR TO AND AFTER THE FALL OF 2008.

Americans and Global Investors are like the tall building's open-window jumper that proclaims half-way to the bottom:  "So Far .... So Good!".

Ah, ignorance is such bliss.  I just hope Wal-Mart has enough greeter's smocks to go around for the "retirees" who never get to retire.  Prison security should be a growth industry also going forward;  though, if you have enough dollars and political contacts in the U.S.A. of today to grease the right palms, you will never see an orange jumpsuit.   Soup kitchens will also see a growing business, not something I would joke about ...... unless some of our current "leaders" are found in line.  Ben Bernanke should be made to always take the last position in line, he has been so helpful these last few years.  Solving a debt problem with more debt.  What genius.  And with a guarantee of zero interest rates for the next two years, I VOTE THAT HE BE KNIGHTED ..... BUT NOT WITH THE FLAT SIDE OF THE SWORD!!!!  Don't you just love giving your local bank free use of your money at 0.3% interest which is some 9 percentage points below Real World Inflation.  Makes one want to buy gold or silver with the money instead, even with the volatility inherent in a monetary metal that is made to behave like a commodity on futures driven exchanges.  Just don't rush back into the Wall Street Casino of Stocks & Bonds, you will be waiting tables there if you do.

Bennie Boy Bernanke has much company with the Central Bankers, Treasurers, and Governments of the World, especially the Developed World, but they all deserve that perpetual last position in line for sustenance.  Remember when you hear the political news in 2012:  GETTING RE-ELECTED IS ALWAYS MORE IMPORTANT TO A CAREER POLITICIAN THAT DOING WHAT IS RIGHT FOR THE ELECTORATE.  Our political system is broken in this country.  It is up to you and I to see that it is reformed.  We all know from experience that it won't be easy as public leeches are firmly attached to the life-blood of our daily labors, OUR MONEY, but the hot iron of reform will get them to eventually withdraw even if WE The Patient are slightly burned.  Forests are repeatedly cleared of deadwood for the long-term health of the woodland.  We need many a backfire in Washington.

TIME OUT TO GATHER MY THOUGHTS AND LOWER MY BLOOD PRESSURE.  Good thing I am not a boozer.

I get a kick out of the "experts" that say that Gold in 2012 just can't have a 12th year in a row of positive gains.  Only American real estate could enjoy that record, right?!  Technical analysis, January Effect, Election Year, cycle analysis, et. al. are all interesting tea leaves, but the fundamentals always rule the day in the "final" analysis.  AND FUNDAMENTALLY, THE GLOBAL ECONOMIC AND FINANCIAL SYSTEMS ARE IN A STATE OF COLLAPSE.  Oh, we will see much can kicking down the road in 2012 such as with more Federal Reserve Dollar Swaps for Euroland, ECB Money Printing, QE3 in a myriad of shapes and forms, overt accounting gimmickry, ISDA word-smithery, BUT IN THE END, IT WILL BE ONLY GOLD AND SILVER THAT WILL BE LEFT STANDING AS ALL CURRENCIES ARE COLLECTIVELY DEVALUED TO THEIR TRUE INTRINSIC VALUES ........ NEXT TO NOTHING.  I think the Mayan Calendar is right when it forecasts the end of the world as we know it in December, 2012.  There is change a' coming.  Not Obama's false definition of change you can't believe in anymore, if you ever did.  There is change coming that will be disruptive, even violent.  There is change coming that we can't even imagine right now.  There is change coming that will rock the foundation of the freedoms that Americans have come to expect within their democratic republic.  There is change coming that will modify our definition of being well-off.  It is not change that we will necessarily vote for.  IT IS CHANGE THAT IS COMING WHETHER WE LIKE IT OR NOT. 

There should be a warning label on every pack of bank-sourced U.S. Dollars:  THIS PRODUCT COULD BE DANGEROUS TO YOUR HEALTH.

In this environment of accelerated Dollar and Currency Debasement to attempt to pay off all of the unpayable debts of the world, GOLD AND SILVER WILL CONTINUE TO RALLY TO NEW HIGHS.  Yes, even in 2012.  The glittery ride will be a bumpy one, but we never promised you a rose garden.  If getting rich were easy, there would be no One Percent, it would be the One Hundred Percent!  Suck it up, America, quit your whining, put your nose to the wheel, and stay the course.  There truly is a pot of gold at the end of the rainbow.  There will just be some violent storms before we see it.


 



  IT IS ALL ABOUT PERSPECTIVE:  NOT VERY SCARY WHEN YOU LOOK
  AT THE LONG-TERM PERFORMANCE OF GOLD.  Maybe a slight pullback
  in here, but this is a picture depicting strength, not weakness.  Gold
  violates its 200-day moving average all the time, BIG DEAL.
 


 



  MORE VOLATILE THAN GOLD, BUT JUST CONSOLIDATING MULTI-YEAR
  GAINS IN A WOUND-SPRING PATTERN.  Already on its way to $40,
  timing these metals is an exercise in futility.  Great things in store
  for Silver in the months ahead, will surprise everyone on the upside.
  Always remember that the inflation adjusted price for Silver from the
  1980 high is $158 per ounce.
 





THE SAGE OF WEXFORD, locked & loaded.  Welcome to the Mayan version of 2012.  It will be the end of something as we know it.


P.S.  The turn in global interest rates has occurred.  A 30-year rally in U.S. bonds is coming to an abrupt termination.  Flight-to-safety investing will have an entirely different beneficiary in the years ahead as insolvency, default risk, currency debasement, fiscal largesse, and broken promises enter the determination of yield equation after a very long hiatus.  COULD THERE BE A 30-YEAR BULL MARKET IN GOLD AND SILVER?  Stranger things have happened in the last 2,000 years.  If we ignore the lessons of history, history is bound to be repeated in its entirety.  Currencies, financial systems, economies, and governments have failed on a regular basis throughout human history.  We are over the cliff, not even teetering on its edge.  Parachutes, anyone???


 

BONDS HAVE BEEN PUTTING IN A TOP SINCE SEPTEMBER, 2011, roll-over in progress to higher yields and lower bond prices.  The terminated rally was a misguided "flight-to-safety" that paid investors nothing for the risk of investing in U.S. sovereign paper ........  paper of the largest debtor nation in the world that has no plan or stomach for getting its fiscal house in order with more ratings agency downgrades just over the horizon.


FOR YOU ADDICTED STOCK & BOND INVESTORS OUT THERE, I quote Clint Eastwood:  "Are you feeling lucky today, punk?".  I think he was pointing a 6-inch barrel .44 Magnum at the same time, get the picture?!


 

 

  Price always follows volume in a market and this long-
  term chart of Total U.S. Dollar Trading Volume should
  be hitting investors over the head by now:  Stock market
  going higher on less and less price-adjusted volume,
  less and less conviction!  TIMBER!!!!!!!!!!!!!!!!!!!!!!!!!!!

  P.S. The much-ballyhooed bear market rally from the
  March, 2009 lows has occurred on 60% of the pre-collapse
  2008 DTV's; investors still ain't buying the longevity of
  the current stock advance and many have left equities
  only to return in a decade or two.  What are YOU waiting
  for??
 


ARE YOU THE "SMART MONEY" OR THE DUMB MONEY???
 


Would think that Corporate Insiders have a pretty good
view on their companies' prospects for the near-term!!!
Expect corporate profits to collapse beginning with the
First Quarter, 2012 reporting season.  GOT GOLD?!



 

BACK TO TOP






April 15, 2012:  PLEASE PASS THE BARF-BAG!


I busted a little finger yesterday doing a lawn tractor repair, so there may be blood on this ezine.  Nothing broken, just my pride.  It is difficult to sit down to the keyboard these days and pound out these messages to the Enlightened and Yet-To-Be-Enlightened.  One has to take a few aspirin just to get past the pain of living in Modern Times when we are virtually lied to about everything from Government, financial media, and the nightly news.  This is a key reason why so many Americans will be unprepared when the cover of Time Magazine shows a Wall Street investment banker in a soup kitchen line.  Yes, they will be one of the last classes to go, but many of them are as clueless as to the avalanche of systemic collapses we are engulfed within as the Man/Woman on the Street.  See, I had to be bi-sexual in that reference or I would be accused of literally waging a "War on Women".  I think the real enemy of women today is other women who exude an ultra-liberal bias in the "anything goes" vein to the extent that they cannot refer to their polar opposites without prevarication and humongous exaggeration laced with a truckload of hateful bile.  My Grandmother always said that if you can't say ANYTHING nice about someone, DON'T SAY ANYTHING AT ALL!  Are you listening Ms. Rosen?!

 
Wall Streeters, much to the glee and giggles of Enlightened Main Streeters (EMS), continue to operate under the premise that it is "business-as-usual" in the financial markets, trading pits, and Corporate America (their "economy") when nothing could be further from the truth.  Since they have not figured out a way, aside from ETF's and grossly-uncovered futures contracts, how to generate obscene commissions and bonuses from precious metals except on the short side, they are in for one heck of a surprise in the months and years ahead as trading volumes move increasingly overseas, away from the American Myth and Hypocrisy of Free Markets.  Not to mention that physical off-takes in these trading venues are surging as precious metals find their way once again back into the vaults of Central Banks (predicted here some 5 years ago!).  It was inevitable that fiat currency experiments such as the U.S. Dollar, the Euro, and the Yen would find their places in the trash heaps of history as media of exchange just as their predecessors had over centuries and centuries.  As the proverbial "bull" in the china shop, the Bank of China will take more Comex traders to the poorhouse than all of the rogue traders in financial history.  Hard to believe when we look back at the now tore-and-tattered Washington Agreement, BUT ENLIGHTENED CENTRAL BANKS IN THE MONTHS AND YEARS AHEAD WILL BE ONE OF THE STRONGEST BUYERS OF GOLD AND SILVER!  And certainly, there are well-financed private investors that smell blood in the air when the PM Shorters pile on without the goods to back up their bets.  Goldman and Morgan are no longer the biggest bullies on the block.  Couldn't happen to a nicer bunch.  Staying at the casino roulette wheel for one last spin has always proven to be financially fatal.


 


TALK ABOUT A CHANGE IN PERCEPTION OF THE BARBARIC RELIC!!!



If certain folks are currently obsessed with the One Percent Bogie Men ( who happen to already pay the vast majority of all U.S. taxes when some 44 Million Americans pay no U.S. Federal Taxes AT ALL ), they may take some comfort in the fact that the minions of highly-paid Wall Streeters are diminishing in number by the day.  One sees layoff notices virtually every day, not just in the mainstream economies of Best Buy, Lowe's, and Sears, but across the sea of Wall Streeters who have kept New York real estate afloat up to this point.  Wonder if fewer hands to toss coin into the Obama Pot for Re-Election ( OPRE ) will have any effect on his gargantuan fundraising results???!!!  By targeting this group of One Percenters in Obama's Class Warfare Campaign, since they have obviously gained at the expense of all others, it is kind of like biting the hand that feeds you.  So take heed, thee of Gold and Silver hoards.  Justice may move in strange and mysterious ways, not to mention at glacial speeds, but she eventually gets her pound of flesh.  Not sure we can safely refer to "Justice" in the feminine sense anymore, let me check the American Political Correctness Handbook ( APCH ).

 



Let the Sage be so bold as to go out on another limb on his growing oak tree of prognostications and proclaim:  "The United States will not have any sustainable economic recovery until there is broad Tax Reform".  I am convinced of this now as the Political Silly Season comes of age and the Tax Card is put plainly on the table for all of the suffering American taxpayers to see and to chant in chorus the mantra:  "TAX THE RICH, TAX THE RICH, TAX THE RICH".  Countries through the millennia have tried this overly-simplistic, wealth-redistributive, ill-advised approach and found that money to the Treasury diminishes, not grows with higher taxes on the highest earners.  If anyone can find a way to beat Uncle Sam at his own game of de facto wealth redistribution, it is people with means.  Has always been the case, always will be the case.  I can safely say the citizens of the land are smarter, more industrious, and more determined than Government with all its serpentine heads.

Not only is the current Code too complicated such that even Einstein would be scratching his snowy head, but it creates such distortions in our economy that the functioning of the economy itself becomes compromised.  Money goes where it can possibly get the highest tax deduction and not necessarily where it can provide the highest after-tax, total return.  Investing in dividend-paying stocks is just one example where a 10% correction in the underlying stock can more than wipe out an annual dividend.  If you have no long-term capital gains in an overpriced real estate investment trust ( REIT ) stock let's say, then what good does a 15% capital gains rate really do you?  We really need more shopping centers and retail space now, don't we?!!!  THIS OBSERVATION ALSO GOES FOR ALL TREASURIES AND MUNICIPALS IN SPADES RIGHT NOW!  We really need more government at the Federal, State, and local levels right now, don't we?!!!  We are providing excess funds to segments of the U.S. economy that do not warrant such cheap and abundant financing based on their deteriorating fundamentals.  It has been a chase for yield in a time of punitive interest rates, well below the real rate of inflation in the 9% to 10% per annum range, DEVOID OF ANY REALIZATION THAT THE ABILITY TO CONTINUE TO PAY DIVIDENDS, MUCH LESS PRINCIPAL, SLIPS AWAY WITH THE RENEWED DECLINE IN ECONOMIC ACTIVITY AROUND THE GLOBE. 
Default risk and inflation risk are creeping back into the bond yield pricing-equation after a very long hiatus as the Bond Vigilantes pull a Lazarus, rising from the dead.  You are still NET under water!

MUCH MORE IMPORTANT TO CHOSE THE CORRECT ASSET CLASS THAN ONE THAT POSSESSES A POTENTIAL TAX ADVANTAGE.  More on this issue in future ezines, my head is hurting just thinking about it.  My head is also hurting from what I had to send into Uncle Sam for my First Quarter, 2012 Estimated Tax payment.  But it is my "fair share", isn't it and I should be proud to do my part as a patriotic American knowing that the money will be so well-spent, especially at the Government Services Administration.  Oh, and I hope a few dollars also go to pay for a hooker or two for the Secret Service visiting Columbia ahead of the Prez's boondoogle #2,389.  PULL THE CHECKBOOK FROM GOVERNMENT, AMERICA, OR YOUR GRANDCHILDREN WILL ENJOY A STANDARD OF LIVING EQUAL TO A 3RD WORLD COUNTRY!

The tug-of-war between financial assets and Precious Metals continues, but I think we are much closer to a new rally in both Gold and Silver than the reverse; I think interim bottoms were put in weeks ago and we are seeing accumulation of both metals, whereas we are seeing distribution in the stock AND bond markets. 

This risk-on versus risk-off schizophrenic marketplace will eventually become a "risk-on" daily trade for Gold and Silver, and a "risk-off" daily event for financial assets, we may be only hours away from both stocks and bonds being firmly in the grasp of the Bear.  I think a triple-top has already formed in the stock market even though we are below the previous high on the S&P 500 at 1565, just another confirmation of the secular bear market equity investors have been suffering through since 2000.  Bond investors are in for one heck of a surprise when the auction yields of Greece, Italy, and Spain start to wash upon American shores.  As we gradually lose Reserve Currency status with trade between non-Western countries now utilizing domestic currencies and even Gold, there will be fewer and fewer reasons to continue to neutralize the majority of trade flows into U.S. Dollar denominated securities.  If the U.S. Federal Reserve bought 61% of 2011 Treasury auction offerings, it is quite evident that the bloom is off the Dollar as a store of value.  Rates are going much higher in my opinion, contagion from the Euroland Sovereign Debt Fiasco is already lapping our shores. 
The U.S. Federal Reserve has become a toxic political entity, as has the European Central Bank, and I am not convinced that it can be QE to Infinity without severe repercussions to the Fed's autonomy and charter.  Germans already consider the European Central Bank to have been irresponsible and in violation of its charter with the Trillions of Euro's the ECB has printed into existence to attempt to "save" member States and European banks.  A PEOPLE AWAKENED IS A FORCE TO BE RECKONED WITH.

DO NOT FALL ASLEEP AT THE WHEEL IN THIS ENVIRONMENT.  We are going to see price swings in the days and months ahead that will give you vertigo.  It is kind of like putting one's ear to the railroad track to see if a train is coming.  My ears are ringing, and I have that queasy feeling in the pit of my stomach.  The unraveling of the sophomoric attempts to save financial systems and economies around the globe through money printing and backdoor slight-of-hand is well in progress, it is just a matter of recognizing the signs.  This is not the time to stand aside.  When the waterfall decline begins, it will be very difficult to make additional gold and silver purchases without a price disadvantage vis a vis premiums and long delays in delivery, probably 2 to 3 months out.  I think that both Gold and Silver will rally as financial instruments collapse, not the risk-off phenomenon that we saw in 2008.

THERE ARE MANY, MANY MORE CONVERTS TO THE STORE OF WEALTH / INSURANCE VALUE OF BOTH GOLD AND SILVER TODAY THAN THERE WERE IN 2008, TO INCLUDE CENTRAL BANKS AND VERY LARGE INVESTORS WHO ARE BIG BUYERS ON EVERY DIP.  AND CONDITIONS ALL AROUND THE GLOBE ARE WORSE THAN IN 2008 WITH TOTAL DEBT OUTSTANDING TENS OF TRILLIONS OF DOLLARS HIGHER, AT ALL LEVELS, I DON'T GIVE A RAT'S PITUIE WHAT THE TALKING HEADS SAY ABOUT THE BANKS, ETC.  Supply and wholesale premium issues for bullion were very prevalent in the Fall of 2008 and I feel it is going to happen again in spades in 2012.  Election Year or not, all the King's horses and all the King's men will not be able to glue Humpty Dumpty back together again.

These are indeed historic times.  ARE YOU ON THE RIGHT SIDE OF HISTORY???


THE SAGE OF WEXFORD, locked & loaded with Gold and Silver bullets.  Extreme air turbulence ahead, please pass the barf-bag*.

* This reference is also appropriate as a reaction to what our so-called "leaders" are doing and saying in Washington, the Federal Reserve, financial news media, and the nightly news.  The idiotic approaches to attempt to cure the world's systemic banking and economic collapses today are truly sickening and nauseating ( redundant use of words, but you get the point ).


 


 
 There will be no sustainable economic recovery in
the United States until home prices start to recover.
If this is what is happening to one of the largest
segments of our economy, what do you think is in
store for corporate profits and stock prices?????
 




 



WHAT ECONOMIC RECOVERY???
Official recession "end":  June, 2009

 



 



Capital spending rolling over
in an economy where the
prospects for continued growth
grow dimmer by the day.

Key area where businesses
adjust expenditures very
quickly to changes in profit
projections.  Double Dip is here.
 





BACK TO TOP





June 10, 2012:  The Ships of State Are Taking On Water.


I think I had several title candidates for this month's epistle, but the vision of giant seagoing vessels listing gravely to starboard or port with their passengers and crew scrambling to save themselves seemed very fitting ( if not a little morbid ).  Edgar Allen Poe was one of my favorite authors during youth, so that should tell you something about this author.  And we just had a 100-year anniversary for the sinking of the ill-fated Titanic that would never have gone down even with a massive iceberg stuck in its stern IF THE CAPTAIN HAD FOLLOWED PROCEDURE AND HAD KEPT ALL OF THE WATERTIGHT BULKHEAD DOORS CLOSED DURING THE VOYAGE!  Make no mistake, all of the developed countries in the world, to include the previously immune BRICS, are taking on water from the 2008 Debt Collapse, Phase II or III, I have lost track.  AND THE GLOBAL ECONOMY IS GOING DOWN, DOWN, DOWN INTO THE DEPTHS OF AN ECONOMIC CONTRACTION THAT WILL FINALLY BE RECOGNIZED AS THE DEPRESSION IT HAS BEEN ALL ALONG.

There is no doubt in my mind that the U.S. has been in recession, Phase Whatever, since the Fall of 2007 AND WE HAVE NEVER EXITED THE FIRST, HIGHLY PUBLICIZED PHASE YET.  Eventually historians with no political ax to grind will fess-up to this reality, but when you monkey around with the price deflator in GDP to minimize inflation at 2% to 3%, any fool can produce a GDP number that is positive enough to suggest growth.  But at 6% to 9% REAL INFLATION, like what your checkbook is telling you exists year-to-year, this American economy has been underwater with negative growth, also called contraction, the entire 4.5 year period.  So double dip talk is really kind of silly, but this is silly season anyway with a Presidential Election just around the corner, what should you and I expect??!!  No matter what you call it, Americans know what this period of Carter-esque MALAISE really is:  A very, very tough time to make ends meet.

I saw the DVD movie, "Margin Call", the other night, and I am pretty sure it tells the story of the Lehman Brothers collapse from one angle or the other.  The arrogance and hubris of the investment bank players I am sure from my prior 20-year Registered Investment Advisor experience was not far from the mark.  It is very interesting to note that a private entity, forget all of the paid stooges in Washington for Wall Street, brought about the chain reaction of illiquidity and failures that propelled the global financial system into the Financial Panic of 2008.  We must add such household names as AIG, GM, Goldman-Sachs, and all of the 8 major, money-center banks such Citi, JP Morgan-Chase, Bank of America, and Wells Fargo to be fair, but the Iceberg that set the catastrophic chain of events in motion was Lehman Brothers.  AND IT WAS ALL ABOUT EXCESSIVE LEVERAGE, FOLKS, THAT GOT OUT OF HAND TO THE EXTENT THAT ONCE THE CHAIN REACTION STARTED, illiquidity in the Collateralized Mortgage Obligation ( CMO ) marketplace where only deeply-discounted bids were being offered, THE WRITING WAS ON THE WALL ......... company capital was wiped out in a matter of a few trading hours.

The iceberg that we inhabitants of Earth have already hit this time around is the one dually labeled:  ILLIQUIDITY IN THE SOVEREIGN DEBT MARKETS AND INSOLVENCY IN THE GLOBAL BANKING SYSTEM.  Now, the ECB just rolled out the Bazooka Printing Press this past weekend in preparation for attempting to back-stop the sinking Spanish Banks to the tune of $125 Billion, but in the final analysis, when the nations of the world employ the creation of "money" out of thin air strategy to solve any and all financial and economic system problems, the buck will stop with the sovereign central banks and governments whose citizens will be on the hook to "produce" this moola on the Inevitable Day of Reckoning.  In my no-longer-so-humble opinion, THAT DAY OF RECKONING IS ALREADY HERE.  So it is now Public Entities that are precipitating this new phase of the Greater Depression BECAUSE THEY LACK THE KNOWLEDGE AND FORTITUDE TO ALLOW FREE MARKETS AND CAPITALISTIC SYSTEMS TO CORRECT THEMSELVES DURING A DEBT COLLAPSE.  Hail ..... Iceland, for having the guts for letting their system fail in order to start anew.  Curse ..... Japan, America, and Europe for propping up a failed system with Tens of Trillions of Dollars of new debt that only makes the size of the now-encountered, devastating iceberg even larger and more destructive.  Like saying, "Please super-size my iceberg".  ( Don't let Mayor Bloomberg hear you say that!  We now have the Portion Police. )

 


 
  Oh my, Oh my, Oh my .... you mean those stupid
 bond investors no longer believe that bail-outs of
 Bankrupt PIIGS by printing money solve the root
 problems of too much debt and not enough income
 production for debt service?!!  I can hear the Irish
 banging pots and pans for 100 Billion Euros of their
 own in overnite money, IT HAS WORKED SO WELL
 FOR SPAIN.  Crapola always finds its own level.
 




EDITOR'S NOTE ( that's me, The Sage! ):

Now one can argue with credibility that the U.S. Federal Reserve and its counterparts around the globe created the ultra-cheap, easy money policies from 1998 through today that allowed excessive risk taking on imprudent leverage in the first place, but the trigger for the crisis was a private entity getting its butt caught in the No-Bid Trap of an Opaque DERIVATIVES MARKET.  Now it is most likely that a "sovereign" or governmental body is going to precipitate the upcoming crisis of confidence in the global monetary and banking systems.  The JP Morgan loss of some $8 Billion on bad trades is just Iceberg Junior for a whole field of floating "sinkers" the world currently navigates within.  Man the PM Lifeboats!


That necessary and cleansing "correction" can only be through massive bankruptcies and liquidations that throws any and all economies into dire economic retracements as surely as night follows day, but eventually allows lenders to lend and borrowers to borrow within a banking system that has been re-capitalized without the corpses of previously "dead debt" to stink up the new system.  And ..... true accounting principles such as "mark to market", heavens not "mark to model", have to be consistently and uniformly employed to truly tell who is on First.  Garbage is garbage no matter what you call it on a fudged balance sheet, so get rid of it, pay the Piper, and start anew.  Bing, bang, boom.  "Breaking Up Is Hard To Do", once crooned Neal Sedaka.

Oh, but far be it for a Greenspan or a Bernanke or a Paulson to let the chips fall where they may AND THE RISK-TAKERS, NOT THE TAXPAYERS, TAKE THE HEAT THAT IS THEIR DUE FOR LEVERAGING THEMSELVES TO THE EYEBALLS AND PLAYING WITH $100'S OF BILLIONS IN RELATIVELY THIN AND TOTALLY OPAQUE MARKETS.

INTERMISSION, Auto repair on 1989 Classic 300E.

So when this 2012 Economic Malaise comes to a town or village near you, you can look to those wielding the levers of power at the Federal Reserve, the U.S. Treasury, the European Central Bank, and every government whose name you can spell TO GIVE THEM FULL FAITH AND CREDIT FOR THE NEW MESSES THAT THEY HAVE CREATED BY NOT DOING THE RIGHT THINGS, BUT THE POLITICALLY EXPEDIENT THINGS.  Now we hear that the Chinese Dragon's economy is rolling over a debt-fueled cliff and realize that the previous engines of global growth, Southeast Asia and the BRIC's, can no longer be looked upon as saviors for the economic malaise of the U.S.A., Europe, and Japan.  We are going to hold a class here at WCM entitled:  "How To Govern During A Debt Collapse".  You can shove all of the freshly printed Dollars, Euros, and Yen at consumers and businesses, but if the Propensity to Spend is absent or compromised due to well-founded concerns about job security and profit forecasts, THE MONEY JUST SITS IN THE TILL EARNING WHATEVER THE DOMESTIC CENTRAL BANK WILL LET IT EARN.  I personally refuse to subsidize any bank with lots of my cash for a 0.12% return.  I will sit on cash, gold, silver, or diamonds stored in a secure vault off-site before I will let any financial institution in the United States have my money for nothing.  WE HAVE ALREADY SUBSIDIZED THE LARGEST MONEY CENTER AND REGIONAL BANKS IN THE UNITED STATES WITH FREE BAIL OUT MONEY THAT WILL PRODUCE A NEGATIVE RETURN FOR TAXPAYERS WHEN THE FINAL VERDICT IS IN.  Since we eventually will have a Bank Holiday here in the States after the peripheral country of Greece exits the Euro or the core country of Spain coughs up a giant banking system or sovereign financing hairball, you and your loved ones better have from $5,000 to $10,000 of currency stashed away in a safe place when your local bank closes its doors for 30, 60, or 90 days.  Let's have our own run on American banks that have continued to make the same excessive risk mistakes for the last 100 years, and no longer deserve our deposits of hard-earned money as a reward for incompetence.

Now, we will shift gears from the Kick-The-Can-Down-The-Road gang of clowns who are only looking to the next election and NOT YOUR WELL-BEING, to the dewdrops of wisdom you expect from The Sage.

Gold and Silver are going higher, if not tomorrow, then the day after tomorrow.  I just love to watch the New York Fed and JP Morgan try to wring the precious metals from our hands with bouts of short-selling that would make a Congressperson blush at the audacity of the manipulation.  I know this sounds of conspiracy theory, but would any of us be surprised if the Central Banks of the world were in bed with the large futures players in working to keep paper specie in vogue and tarnish the image of Gold and Silver as SAFE HAVENS.  NOT TO MENTION THAT THE JIG IS UP ON THE FAITH OF THE MASSES IN DOMESTIC CURRENCIES HOLDING PURCHASING POWER, SO THE CENTRAL BANKS BOUGHT 400 PLUS TONNES OF GOLD IN 2011 ALONE.  I forecast this inevitability here years ago, but none of you freeloaders out there have sent me one iota of gratis for my efforts.  Oh, unsung heroes of the world ....... unite!  To even begin to think that a U.S. Treasury Note paying a paltry 1.5% is a safe haven for cash during an easy-money fueled inflationary period that we are engulfed within with 9% annual U.S. inflation is a bridge to nowhere.  The United States, a country that has spent and promised 5x over what it can produce over the next 30 years, is a junk bond on any honest accountant's ledger and a Banana Republic Want-To-Be with the printing of Dollars in the 10's of Trillions of Dollars.

I put my full faith and credit into the following price patterns that tell me we are closer to the next up-legs in Gold and Silver than further probes downward fuelled by the piling on of government-sanctioned short-sellers.  I revel in the news that Dimon and Morgan got their butts kicked in the derivatives marketplace to the tune of Billons of Dollars.  God works in mysterious ways.  Every dog has his or her day, and physical demand PLUS the demise of the stature and confidence in U.S. financial markets well underway will overwhelm the paper pushers.  Always has, always will.  Now for the pictures that are worth 2300 words for Gold and 57 words for Silver:


 

gold Technical chart [Kitco Inc.]

Silver Technical chart [Kitco Inc.]


THESE ARE MULTI-QUARTER CONSOLIDATIONS, SPORTS FANS.  Nothing has changed in the trend for both metals.  Fundamental reasons for owning them are even stronger than they were 14-months ago.  How many $Trillions of un-payable, unserviceable debt has been created since April of 2011??!!!  The world's financial and economic structures have weakened over the last 14 months, not improved as bandied about by the politicians.  We are in real danger of a global banking system collapse, starting in Europe and coming across the Pond to America.  The markets' reactions to the proposed $100 to $125 Billion bank bailout of Spanish banks over the weekend tells it all:  Spanish debt costs keep rising today, stock markets are in neutral as everyone knows that more freshly printed debt will not heal a world that is drowning in a sea of too much debt.  THE ICEBERG HAS BEEN HIT, THE CLAXON IS SCREAMING TO ABANDON SHIP.

NOW SAY AFTER ME, OH CENTRAL BANKERS AND POLITICIANS OF THE WORLD:  MORE AND MORE DEBT WILL NOT SOLVE THE INSOLVENCY, LOSS OF CONFIDENCE, AND ECONOMIC RETRENCHMENTS INHERENT IN A DEBT COLLAPSE.

Buy Gold and Silver at every opportunity.  Neither you nor The Sage are clairvoyant enough to know exactly at what prices gold and silver will have found their interim bottoms in here, but we are close enough for wasting Dollars to be employed today.  When this puppy turns around, we will see $100 daily moves in Gold and $3 daily moves in Silver. 
WE ARE IN THE PANIC MODE OF PHASE TWO OF THE GREATER DEPRESSION.

I have been personally buying these stores of wealth since 1997, and continue to do so regardless of price.  WHAT THE HECK ELSE AM I GOING TO DO WITH MY WASTING DOLLARS?????????????????????????????  This strategy has served me well over the last 15 years.  I will be able to retire to a cabin in the woods before age 90 and hopefully not overseas.


THE SAGE OF WEXFORD, locked & loaded with Gold and Silver bullets.

P.S. 
Just bought a Mossberg 500 12-gauge shotgun because civil unrest is going to be part of the America that is in our futures.


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August 14, 2012:  Impossible To Prevent The Inevitable Collapse, Officials Have Only Delayed It.


The Elected and Unelected Officials around the world have been working feverishly since the Fall of 2008 to attempt to save the global financial system and rejuvenate domestic economies that are literally swimming in debt at all levels.  They all seem to take some measure of pride in addition to rounds of self-congratulatory back slaps that "things" would be much worse without an endless stream of private sector bailouts and money printing in the Tens of Trillions of Dollars.  Japan is such a perfect example of stagnation and decline that I am amazed that Officialdom does not learn from its glaring experience.  Japan's collapse from real estate and stock market speculation started in 1989, and its economy and financial system have yet to resolve itself as ultra-low interest rates, currency intervention, and overall Government interference in the markets for over 2 decades now have failed to produce conditions which foster adequate economic growth.  The Tsunami and Nuclear Disaster in 2011 of course have not helped, but the Japanese system was still in failure mode when these Black Swan events occurred, so they are ancillary hindrances to growth, not systemic hindrances as represented by a failed banking system.

HAD JAPANESE OFFICIALS ALLOWED ITS FINANCIAL AND BANKING SYSTEM TO BE RE-CONSTITUTED WITH NEW ENTITIES AFTER THE NECESSARY CLEANSING OF OUTRIGHT BANKRUPTCIES OF THE CURRENT WALKING-DEAD BANKS AND COMPANIES, NORMALCY WOULD HAVE RETURNED TO JAPAN AND ITS PEOPLE WELL BEFORE TODAY.  The experience that the Developed World to include the United States and Europe and even China and certain Southeast Asian Tigers have in front of them will confirm this assertion over time.

Events this Fall are going to be very interesting indeed.  Not that the U.S. Presidential Election is not "interesting" in itself with all of the gutter-sniping going on, but the global economy is coming unglued right before our eyes. 

Here is a newsflash for Officialdom:  "YOU CAN MAKE DEBT COST VIRTUALLY NOTHING AND MAKE IT READILY AVAILABLE TO ALL WITH A PULSE, BUT IF THE POTENTIAL BORROWER DOES NOT HAVE A JOB, IS WORRIED ABOUT LOSING HIS OR HER JOB, CAN BARELY MAKE ENDS MEET WITH CURRENT MONTHLY PAYMENTS, AND GOES TO BED AT NIGHT AFTER WATCHING HIS FAILED GOVERNMENT ENGAGE IN VITRIOL INSTEAD OF ACTIONS .....................  GOOD LUCK ON GETTING THE PATIENT TO BORROW AND SPEND ANEW!!!!!!!!!!!!!!!!!!!!!!!!!

These Officials just don't get this basic principle no matter how many times it is put in front of them in a myriad of shapes and forms.  But Bernanke is kind of getting the message as he watches the American cost of living in the real world, not the fudged, hedonic-adjustment world of the Bureau of Labored Statistics ( BLS ), stay persistently high and going higher.  Maybe he has to do the grocery shopping these days or fill the gas tank of the limo or pay some insurance premiums or pay the co-pay for his tranquilizer prescriptions or pay any utility bills!  Just wait until the price effects of the record-setting Midwest Drought take hold at the supermarket and gasoline heads for $4 per gallon by Labor Day since the EPA under Obozo has made it virtually impossible to get approval to build additional refinery capacity in the United States today.  Crude oil could still be at $85 per barrel ( currently around $95 ) and have 87 Octane gasoline at $3.70 per gallon due to refining bottlenecks!  Duh.  So Helicopter Ben has one hand tied behind him via INFLATIONARY EXPECTATIONS ( if not actual reported inflation ) as he tries to pull the levers on the Federal Reserve Printing Press.  Not to mention that he also sees the mob out of the corner of his eye coming to get him as he and his crew of Governors operate behind closed doors, without Congressional or legislative authorization behind their bag of apparently endless tricks, putting the U.S. Taxpayer on the hook in the end for any of his mistakes in ballooning the Federal Reserve Balance Sheet.  WELCOME TO THE WILD, WILD WEST OF CENTRAL BANKING, 2012!!!!!!!!!!!!!!!!!!

In summary, regarding Bennie Boy and Quantitative Easing Phase THREE:  It will only occur during the Fall in the Fall of 2012 during the upcoming PANIC AND COLLAPSE and will be like a monetary pea-shot at about $500 Billion to $700 Billion of U.S. and mortgage debt buying ...... USING OF COURSE ....... YOUR FRICKING MONEY.  We are already in the endgame phase of the historic mess and are collectively just waiting for the next shoe to drop, which it will very, very soon.  Euro disintegration could be the trigger, but there are no shortage of bodies that could float to the surface to spook the masses and the markets and Governments and Central Bankers. 
Once confidence is lost in a government or a currency or a financial/banking system, it is Katie Bar The Door.  We are slipping rapidly back into recession in the United States and around the world, Europe leading the way with China not too far behind.  The Economic Fiery Dragon of China is now puffing out smoke balls instead of flames, if you can believe any statistic that comes out of this socialistic dictatorship.  Even the Teutonic Juggernaut of Germany is showing signs of slowing since exporters depend on the health of their customers to keep the factories and shops humming.  And in one giant sign of fatigue and pause, the world economy is not just catching its breath, it has intermittent breathing, period.

When the demand for money is just not there even at ZERO COST because you still have to pay it back out of future earnings or investment returns, injecting an endless stream of liquidity into the global financial system does not make the economy or financial system SOLVENT or Self-Sustaining.  The world is awash in liquidity, it can be created out of thin air by the Central Bankers. 
The real problem for the world is SOLVENCY.  The balance sheets of global banks and sovereign governments are so compromised and laden with DEBT THAT WILL NEVER BE REPAID IN 5X GENERATIONS, that they cannot benefit one iota from the typical effects of fiscal stimulus and additional borrowing.  If the largest growth in spending in an economy is from the Government, the transmission effect to the private economy is one of diminishing returns.  Governments are not efficient wealth transmitters, re-distribution or not, Mr. Obama, I hope you are taking notes in between campaign stops ( ARE YOU EVER IN THE OVAL OFFICE DOING THE PEOPLE'S WORK??????!! ) ....... history has proven this fact.  History is littered with the carcasses of failed governments and their failed paper, promise-to-pay currencies.

THE U.S. DOLLAR IS TEETERING ON THE EDGE OF FURTHER DEVALUATION.  HOW CONVENIENT FOR THE OVER-SPENDERS OF OUR NATION, THAT THEY CAN ATTEMPT TO PAY THEIR DEBTS IN A CHEAPER CURRENCY.  But with devaluation comes inflation and financial market turmoil, two conditions Gold and Silver are very fond of.

So for all of you Precious Metals investors and Want-To-Be PM Investors out there, your patience is about to be rewarded.  Both Gold and Silver have been consolidating exponential gains from 2011 that reached a feverish pitch that needed more than a normal amount of time to calm down by washing out the weak holders and bringing in strong holders.  To date, it has been a 12-month consolidation for Gold and a 17-month consolidation for Silver, the latter being considerably longer due to the extent to which Silver prices had risen in 2011. 

Silver vaulted from the $26 area in early 2011 to $47 by mid-April, 2011, a 80% move in less than 4 months' time ...... a 240% annual rate of gain.  Silver has now retraced all of this move and has built a very firm base around $28 for the upcoming moves ahead into the mid-thirty's and low-forty's in price.  With Gold, having an August, 2011 high of around $1920, it took 4 more months to reach this level than Silver's interim high.  Gold has respectively had a much more modest pullback into the $1550 area, now base-building at the current consolidation zone around $1600 ( still $270 above its rally's starting price around $1330 in early 2011 ).  While it took twice the time of Silver at 8 months for Gold to form its 2011 interim high, Gold's 2011 advance was a mere 45%.  So its one-year consolidation period is neither unexpected or unusual.  In fact, history is full of such periods of consolidation based on prior historic price appreciation moves.

STAY THE COURSE AND CONTINUE TO ACCUMULATE THE METALS.  When things get really busy in the Fall, I am not going to work overtime to handle the 2008-like explosion in call volume, I will handle what I can during the normal work day.  Been there, done that, I am getting on in years.  Plus, you should have been accumulating during this consolidation period, not attempting to time a market that only God knows has bottomed.


 


Without going into them here, as they are very adequately covered at websites such as www.Gold-Eagle.com and www.321gold.com, every technical indicator under the sun is pointing to price pressure building in both Gold and Silver, signaling an end to this bull chasing correction that has discouraged more than one precious metals advocate.  It is just when the last exhausted bull has gone out to pasture that a new bull comes roaring out of the gate SINCE THE FUNDAMENTALS BEHIND GOLD AND SILVER OWNERSHIP ARE EVEN STRONGER TODAY THAN IN AUGUST OR APRIL OF 2011.  Would you rather hold devaluing fiat currency from INSOLVENT ISSUERS of endless supply in bankrupt financial institutions for 0.2% per annum OR Gold and Silver of limited supply and historic value as a store of wealth and true safe-haven in times of Panic and Collapse???!!!  History is on your side in the latter asset class; it is firmly against you in the former. 

( The Stock and Bond Markets were not even mentioned here because they are both major accidents about to happen; corporate earnings peaked some two quarters ago and bonds are the riskiest I have ever seen them with yields that only George Soros could make money on.  However, if the Bond Vigilantes come a-calling to America like they have to Greece, Spain, and Italy, and it is just a matter of when, not if, no one, not even Uber-Liberal George will make money on bonds, but lose his shirt with the rest of the mortals. )

The current state of Gold and Silver prices is kind of like the dome on a volcano.  There is an eruption of price appreciation, the magma comes back down to earth, cooling and capping the beast within, not permanently, just temporarily.  The longer magma builds a dome over the volcano, the greater the pressures that build, climaxing into a Vesuvius eruption that once again startles the world.  We are entering a seasonally strong period of the year for Precious Metals, but more importantly, THE WORLD IS COMING UNGLUED BEFORE OUR EYES.  This is not an exaggeration, just wait for the next shoe to drop in the Euro Saga that will find one country after the other exiting before the austerity-riled populace burns the countryside down to the ground.  The Germans have rightly dug in their heels about EuroBonds and funding the ESM, so when the healthiest patient leaves the asylum, BEDLAM REIGNS.  Like trying to kick a can during a hurricane.  ( I have applied for a copyright on that analogy! )


 

30-year Gold Seasonal Chart

Can you feel the earth moving under your feet as the
Magma dome gets ready to let loose?!




THE SAGE OF WEXFORD, digging the precious foxhole with both hands and feet.


P.S.  LET ONE MORE FINANCIAL INTERMEDIARY ABSCOND WITH CLIENT FUNDS IN THE BILLIONS IN THE UPCOMING WEEKS AHEAD AND THAT IS THE STRAW THAT SUCKS THE LAST VESTIGE OF CONFIDENCE OUT OF THE SYSTEM.  We The People will eventually send some of these thieves to jail, the Greater Depression ahead will guarantee it.  It will take another Administration in Washington to let loose the Furies.  Very good chance of that happening also with, "IT'S THE ECONOMY, STUPID!" coming back into vogue, a more relevant campaign slogan in August, 2012 than in Clinton versus Bush, Sr. days.  A meager 0.8% increase in Retail Sales for July of 2012 means little with respect to the recent trend of retracement.
 

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October 12, 2012:  Desperate Administrations Do Desperate Things.


I am going to postpone writing this ezine until after the Presidential Election so that I can more fully discuss what I see coming to America based on the leader that this country chooses on November 6th.

Last night's performance by Joe Biden, I will not honor him with the title of Vice President since there was nothing presidential about his behavior and demeanor last night, and the ABC-sourced moderator, Martha Raddatz, were pathetic and deserve the ocean of justified criticisms flowing their way.  The word "moderator" means an individual appointed the task of mediating a polite discussion of selected topics of grave import to the Nation such that one candidate is not granted special privileges of interrupting, sneering, laughing, and generally trying to distract the audience from the responses of the other candidate.  Martha Raddatz showed prejudice in her repeated and abrupt interruptions of Congressman Ryan, I counted 4 times, and her repeated interrupting follow-up questions that were not posed to Joe Biden; I counted a 3 to 1 frequency here.  If one were to look at the guidelines for a moderator in a debate, one would find that you use a polite expression such as "Okay, Mr. Ryan, we need to get Mr. Biden's response" instead of just cutting him off with, "Mr. Biden, your response".  The money that these news-readers make on television would suggest that they could afford a copy of the Presidential Debate Commission's guidelines for moderators or any reputable source for such moderator guidelines.  The moderator, a misnomer for this Vice Presidential Debate if there ever was one, failed to control the conversation such that each candidate was given his allotted time UNINTERRUPTED AND UN-DISTRACTED BY THE OTHER CANDIDATE.  Paul Ryan was polite and respectful throughout the debate, while soon to be Former Vice President Joe Biden behaved like a drunk at a political event that required medical treatment by a mental health professional.  Had he behaved in this manner with my late Green Beret Father, Joe would have had a fist sandwich coming his way.

Ms. Raddatz effectively lost control of the debate.  While her questions were spot on, I give her credit for that at least, the manner in which she allowed the debate to proceed with Mr. Biden attempting at every turn to dominant the conversation and viewers' television images, was an abject failure of her responsibilities as moderator.  Maybe we need an Ex-Marine, male or female, to fill this position in the future, but this performance diminishes the value of supposedly civil discourse on pressing issues for America for the sole benefit of American Voters.

SHOULD BARACK HUSSEIN OBAMA BE RE-ELECTED NEXT MONTH, AND I NOW FEEL HE WILL BE PUSHED OUT IN A VIRTUAL LANDSLIDE BECAUSE AMERICANS ARE GOING TO VOTE THEIR POCKETBOOKS AS ALWAYS, I EXPECT THAT HE WILL EVENTUALLY BE IMPEACHED BY A REPUBLICAN-DOMINATED CONGRESS.  [ November 7th UPDATE:  Yeah, and by pocketbooks that includes the 45 Million Americans that receive some form of Government Check each week or month, Social Security, Disability, and Veterans being the deserving ones of the huge and growing lot!!! ] 

The cause of action for this removal from Office will be his Un-Constitutional and lawless use of Executive Orders which to date he holds the American Presidential record for by some 50%.  See recent violations of the WARN Act as just one example, where the Obama Administration is notifying corporations that they do not have to notify their workers of impending Sequestration Lay-offs PER LEGISLATION LAWFULLY PASSED BY THE U.S. CONGRESS.  To assure his position in dubious presidential history, Mr. Obama's administration has also committed YOUR TAXPAYER DOLLARS to paying these corporations legal fees should the affected employees sue their employers under the WARN ACT as they are legally entitled to do.  Unprecedented behavior and lawlessness by a very desperate Administration.

I am warming up the bus to take as many Chicago-style politicians back to Illinois as possible in January, 2013, into a state bankrupt already by like-minded policies of Excessive/ Entitlement-Driven Government, and I have an army of friends ready to drive additional buses to handle overflow.  How many yard signs do you see supporting Obama/Biden this time after Change You Cannot Believe In???!!!  BE ADVISED, AMERICA:  YOU REAP WHAT YOU SOW.


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


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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 Nation addicted to entitlements puts the biggest givers back in office.

  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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The information and opinions contained within WCM's "Bullion Market Insights" have been compiled or arrived at from sources believed to be reliable but no representation or warranty, express or implied, is made as to their accuracy or completeness. Neither Wexford Capital Management, David W. Young or the Company's agents or assigns accepts any liability whatsoever for any loss arising from the use of this free newsletter or its contents. All periodic "ezine" articles posted on www.goldsilverbullion.com are strictly for informational purposes only. No statement or expression of any opinions contained within this electronic newsletter constitutes an offer to buy or sell any financial securities or surrogates mentioned herein. Readers are encouraged to conduct their own research and to perform extensive due diligence and/or obtain professional financial advice before making any investment decision, especially in the exceptionally volatile asset markets of today.  WCM's Principal, David W. Young withdrew the Company's Registered Investment Advisor status with the S.E.C. and the Virginia Division of  Securities in May of 2005 and no longer offers financial-asset managed accounts receiving continuous supervision of assets.  WCM's principal, David W. Young, was a Registered Investment Advisor in good standing from October, 1985 to May, 2005.  Furthermore, the company does not engage in any fee-based or compensatory provision of financial or investment advice.  The brokering of tangible assets sales via U.S. Rare Coins, Precious Metals Bullion, and Fancy Colored Diamonds is the sole business of Wexford Capital Management and the company cannot be construed under any measure as being in the "financial newsletter business".




 



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All Rights Reserved


November 9, 2012, SageAdvice:    Most Americans will be left at the gate as Gold and Silver move counter to the crashing Stock Market.  Their Chinese brethren will be buying every ounce the world has to offer, while the majority of Yanks will sit on the fence until Gold is past $1800 and Silver is past $35.  Oh, well.  They re-elected Hussein Obama, what do you expect?!!!



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