An Annotated Paul Brodsky Responds To The Bernank's Latest Attempt To Discredit Gold

Last week, Bernanke's first (of four) lecture at George Washington University was entirely dedicated to attempting to discredit gold and all that sound money stands for. The propaganda machine was so transparent that it hardly merited a response: those away from the MSM know the truth (which, simply said, is the "creation" of over $100 trillion in derivatives in just the first six months of 2011 to a record $707 trillion - how does one spell stability?), while those who rely on mainstream media for the news would never see an alternative perspective - financial firms are not among the top three sources of advertising dollars for legacy media for nothing. Still, for those who feel like the Chairman's word need to be challenged, the following extensive and annotated reply by QBAMCO's Paul Brodsky makes a mockery of the Fed's full on assault on gold, and any attempts by the subservient media to defend it. To wit: "Has anyone asked why so many powerful people are going out of their way to discredit an inert rock? We think it comes down to maintaining power and control over commercial economies. After professionally watching Fed chairmen cajole, threaten, persuade and manage sentiment in the markets since 1982, we argue this latest permutation is understandable, predictable and, for those willing to bet on the Fed’s ultimate success in saving the banking system (as we are), quite exciting.... Gold is no longer being ignored and gold holders are no longer being laughed at. “The Powers That Be” seem to have begun a campaign to discredit gold."

Previewing Next Week's Events

Next week will be relatively light in economic reporting, and with no HFT exchange IPOs on deck, and the VVIX hardly large enough to warrant a TVIX type collapse, it may be downright boring. The one thing that will provide excitement is whether or not the US economic decline in March following modestly stronger than expected January and February courtesy of a record warm winter, will accelerate in order to set the stage for the April FOMC meeting in which Bill Gross, quite pregnant with a record amount of MBS, now believes the first QE hint will come. Naturally this can not happen unless the market drops first, but the market will only spike on every drop interpreting it for more QE hints, and so on in a senseless Catch 22 until the FRBNY is forced to crash the market with gusto to unleash the NEW qeasing (remember - the Fed is now officially losing the race to debase). For those looking for a more detailed preview of next week's events, Goldman provides a handy primer.

North Korean Rocket Trajectory Revealed

Yesterday afternoon, Barack Obama who is currently in South Korea, briefly was within bullet range (if behind bulletproof glass) of North Korea when he stood on the edge of the DMZ separating the two feuding countries. A few minutes later he left and told the world that "Bad behaviour will not be rewarded" referring to the imminent launch of North Korea's Unha-3 rocket scheduled for a test launch in April. He added that "I will also note that every time North Korea has violated an international resolution, the Security Council resolution, it has resulted in further isolation, tightening of sanctions, stronger enforcement. I suspect that will happen this time as well." Alas, we doubt that Obama's warnings will have much of an impact and that in a few weeks NK will go ahead and hit the launch button undeterred, in the process forcing Japan to scramble its Aegis destroyers and take other countermeasures as discussed last week, in case the missile "veers of course." But just what is the trajectory? Courtesy of North Korea Tech, we now know the secret path the North Korean rocket is expected to take. All we can say is there better not be strong Westerly winds.

Guest Post: How To Think Like A Mad Man, Find Your Edge & Risk Little For Lots

The enigma that is eccentricity can be unravelled by grasping of this single statement; that which you perceive is both a matter of the object of your perception (in this case; the eccentric person) and your apparatus of perception. Eccentricity, then, is as much a quirk of the popular mind as it is of a particular person. So with the assumption that you seek creativeness and intrigue — here’s how to think eccentrically, find your edge and risk little for lots.

The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent

Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see here). A few months later New Century collapsed and the rest is history: tens of trillions later we are still picking up the pieces and housing continues to collapse. Yet one bubble which the Federal Government managed to blow in the meantime to staggering proportions in virtually no time, for no other reason than to give the impression of consumer releveraging, was the student debt bubble, which at last check just surpassed $1 trillion, and is growing at $40-50 billion each month. However, just like subprime, the first cracks have now appeared. In a report set to convince borrowers that Student Loan ABS are still safe - of course they are - they are backed by all taxpayers after all in the form of the Family Federal Education Program - Fitch discloses something rather troubling, namely that of the $1 trillion + in student debt outstanding, "as many as 27% of all student loan borrowers are more than 30 days past due." In other words at least $270 billion in student loans are no longer current (extrapolating the delinquency rate into the total loans outstanding). That this is happening with interest rates at record lows is quite stunning and a loud wake up call that it is not rates that determine affordability and sustainability: it is general economic conditions, deplorable as they may be, which have made the popping of the student loan bubble inevitable. It also means that if the rise in interest rate continues, then the student loan bubble will pop that much faster, and bring another $1 trillion in unintended consequences on the shoulders of the US taxpayer who once again will be left footing the bill.

Is the Soros-Sponsored ‘Agenda 21’ a Hidden Plan for World Government? (Yes, Only it Is Not Hidden)

by Mike Opelka, The Blade Report:

What is Agenda 21?  If you do not know about it, you should.
Agenda 21 is a two-decade old, grand plan for global ’Sustainable Development,’ brought to you from the United Nations. George H.W. Bush (and 177 other world leaders) agreed to it back in 1992, and in 1995, Bill Clinton signed Executive Order #12858, creating a Presidential Council on ‘Sustainable Development.’ This effectively pushed the UN plan into America’s large, churning government machine without the need for any review or discussion by Congress or the American people.
‘Sustainable Development’ sounds like a nice idea, right?  It sounds nice, until you scratch the surface and find that Agenda 21 and Sustainable Development are really cloaked plans to impose the tenets of Social Justice/Socialism on the world.
At risk from Agenda 21;

• Private Property ownership
• Single-Family homes
• Private car ownership and individual travel choices
• Privately owned farms

The Agenda 21 plan openly targets private property.  For over thirty-five years the UN has made their stance very clear on the issue of individuals owning land;
Read More @ The Blade Report.com

 

Silver Manipulation Caught in the Act; HFT Swamps NASDAQ with 75K SLV Sell Orders Per Second

by Chris Sheridan, Financial Sense:
ronically, just days after noted analyst Ted Butler came on the show to explain how silver and other markets are manipulated through the use of high frequency trading, the real-time data feed company, Nanex, showed how the silver ETF (SLV) was forced downwards by a rapid number of machine-generated quotes exceeding a rate of 75,000 per second. Before you start to think that this was merely a bunch of people hitting the sell button all at once, consider this: They were all launched within the space of 25 milliseconds—ten times faster than you and I can blink!
Here’s a chart of the second by second market activity in SLV where you can see the massive lightning-quick spike occurring at 13:22:33.

Ted Butler Explains the Whole Process

“What’s happening is that these commercials [or large traders], through HFT, can set the price suddenly down. It didn’t go down because there was massive selling from the commercials, they just set the price down. They know how to do it with their computers by putting in actual orders, and faking it, and spoofing, canceling them right away; but what happens is when the price moves down then the selling comes, which is the intended effect and result. Commercials basically put the price down in order to set off stops because everybody seems to be some type of technical trader in the market that reacts to prices.”

Read More @ FinancialSense.com

Gun Sales And Gun Stocks Are Going Nuts As Obama’s Re-Election Odds Improve

by Joe Weisenthal, Business Insider:

We’d heard a few times lately that the gun stocks (mostly Ruger and Smith & Wesson) had been surging lately, thanks to strong gun sales, but we have to thank Eddy Elfenbein for alerting us to how extreme the moves have been lately.
Ruger is up 14% from the Wednesday close after the gun company announced that it literally could not keep up with demand.
Since last summer, the stock has nearly tripled.
So what’s going on? Apparently it has something to do with fears that in a second Obama term — which appears more likely than it did several months ago — that stricter firearm controls would be put in place, and so the time to get guns ss now.
Read More @ BusinessInsider.com

The U.S. Prison-Cell Economy

by Jeff Nielson, Bullion Bulls Canada:

Every month, the U.S. propaganda machine plays the same game in the housing sector. It announces “new home starts”. Then a few days later it announces “new home sales”. But it never, ever, ever talks about the two numbers in the same news item.

There is a very good reason for this: the two numbers have absolutely no connection in the real world. Month after month the U.S. government announces new home sales bouncing around a little above 300,000 units.

Read More @ BullionBullsCanada.com

Richard Russell – Gold & Silver Being Bought Up By Billionaires

from King World News:
With gold remaining in a trading range below the $1,700 level, the Godfather of newsletter writers, Richard Russell, had this to say about what is happening with regards to gold, silver, stocks, inflation and the Fed: “Technically, both the US and Europe are dead broke, and their GDPs would have to run wild on the upside to make the debt to GDP ratio more acceptable. How will it all end? It will end with the central banks churning out junk fiat inflation-adjusted money in order to service the debts. Meanwhile, the precious metals and other tangibles are being bought up by millionaires and billionaires as they await their turns to feast on the remnants.”
Read More @ KingWorldNews.com

In The News Today

March 24, 2012, at 1:13 pm
by Jim Sinclair 

Sometimes I wonder whether the world is being run by smart people who are putting us on or by imbeciles who really mean it. –Mark Twain

 

Jim’s Mailbox

March 24, 2012, at 1:12 pm
by Jim Sinclair 

Bullish Concentration Index Triggers As Jim Proposes $1630 Could Be Reaction Low CIGA Eric
Less visible but equally important events supporting Jim’s thesis that $1630 could be the reaction low:
Bullish concentration of money flows in the futures and options markets. Aggressive accumulation, a combination of short covering and long buying, generated a double and triple peak in 2008 and 2011-2012, respectively (see chart 1). In other words, the peaks represent repositioning of paper within the trend. The concentration index, a variant of the diffusion index, illustrates the rarity and extremely bullish nature of these money flow setups (see chart 2).
The bullish third hook in the largest paper gold ETF confirms the bullish transfer of control from weak to strong hands (see chart 3).
Chart 1: Gold London P.M Fixed and Gold Diffusion Index (DI)
Chart 2: Gold London P.M Fixed and Concentration Index (CI): 1 = Bullish Setup, -1 = Bearish Setup
Chart 3: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic
Today two events took place, one which has the capacity to make the recent low price of gold in the $1630s the low of this reaction (disappointing housing statistics), and another to fuel the gold price into its true 2012 range of $1700 – $2111 by this summer (utilization of selective lock out of the Swift system to India and others).
For fuel into the true 2012 range of $1700 to $2111:
"If a country doesn’t prove it’s making the necessary reductions by the end of June, any institution in that nation that settles petroleum trades through Iran’s central bank will be cut off from the U.S. banking system."
This is terribly ill advised and poorly timed. It smells like a threat of selective lockout via the Swift system.
At a time when the US dollar is sundering as the major international settlement mechanism this is the last thing that dollar managers should consider. Whoever came up with this idea has no appreciation of two points – the weakness of the Western financial system and whatever weapon of war will be used in kind.
The major financial weakness in the US is the level of the US dollar due to sundering use in international contract settlement, the clear and present trend of substituting both the Yuan and Euro as international settlement currencies, and the lack of true economic buyers in the US long bond market.
History will record this decision at this time as a major factor in the final move to financial unwind in the West.
The letdown of the housing report today does not support the majority view that the US is gaining take off speed economically. It is not. It will not and QE will go to infinity, about that there is no question.
Regards,
Jim
Source: Swift Kick To The Dollar
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