~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Financial Intelligence Report
The Newsletter for people willing to take control of their financial future
November 12, 2014
This is today's issue of the Financial Intelligence Report
Contributing Editors: Bob Rinear, Robert Foster, Ted, Chuck and the gang!
Wall Street Lunacy donated by Janet Yellen, and Central Bankers the world over!
Part 1: General Commentary
Part 2: Market Commentary
****************************************************************** I Was Dead Wrong
If you think you can play in the financial markets and not be wrong now and then, let me tell you something...you're delusional. I think that's why I have such a smoldering hatred for some of the pompous analysts that they drag on TV, because they never say they're wrong. They always have some excuse to show how "actually they were right".
Well I don't play that game. I have been spectacularly wrong at times over the years. And today we're going to talk about being wrong in an area that I'm really passionate about...that being Gold and Silver. So, let's get right to it.
What was/am I wrong about it? Well it's simple. I never in a million years would have believed that they could beat gold and silver down for the length of time they've accomplished it. Back in 2011 when gold had rocketed past 1500 to the ounce, I stopped buying it. I felt it had gone too far too fast, as all the Johnny-come-lately's were piling in the door trying to catch the train. Yet it still managed to hit 1900 before the wheels came off.
I figured a pull back had to be in the cards, because it had run so hard and for so long, that it felt a bit frothy. So we waited until it drifted back below 1500 and then began nibbling again. We felt it would probably floor out at the 1350 level. Well HA! Fat chance dummy! It continued to drift and get attacked, over and over and over. Now here it is, the end of 2014 and it's barely able to hold the 1100 level.
I'm not going to mince any words with you guys, the bottom line is that buying any more at 1400 or 1300 ended up being wrong. Today's price proves that, and while I can make every excuse that the TV analysts make, I'm not going to play that game. So, what went wrong? How could I get it that wrong after being so right on the metal for well over 10 years?
Simple. I absolutely underestimated the depths of depravity, the seriousness of the criminality, and the lengths they would go to, to keep the metal suppressed. Oh and by the way, that's the same in Silver too. I never believed that Silver would lose 20 bucks a share. It's at 15. Wrong again.
So there you have it. An admitted "gold bug" and silver admirer; who stated that 1300 in Gold and 20 in silver was probably the bottom, got it all wrong. It wasn't the bottom at all. But wait, there's something else I need to tell you all. I don't know how low it can go. The completely illegal attacks on the metals continue to this day, and they are quite brazen about it. Just last week, "someone" with deep pockets decided to sell a BILLION dollars worth of gold futures in one shot. Naturally it happens overnight in the most illiquid times, so they can get the most bang for the buck. And "bang" they certainly got. They rocked gold for more than 25 bucks in a matter of minutes and then others got shaken and sold into the drop. We lost 100 bucks in a matter of days.
Let me ask you something. Who's got pockets that deep that they can toss out a billion dollar sell, and not worry about the prices? Not only that, "whomever" it is, has done it a DOZEN times before over the past few years. Well we know who it is. It's the Central Bankers. Not even sovereign's are stupid enough to make those kinds of moves because some other sovereign might raise a stink about manipulating markets. This is Central Bank 101. Period.
So let's first ask "why are they beating down the metals so hard?" There's many ways to think about it, but in my mind only a few that make the most sense. The standard line of thinking is that they don't want any competition from gold as it pertains to dollars. The old adage is that if gold is rising it means the dollar is being devalued or inflated away, losing value. Thus gold becomes the store of value. Since the Fed's want people buffaloed into thinking that all is well with the world, they need to keep the metals subdued. They don't want them running away from Dollars.
I think it's a valid argument, no doubt about it. There's a certain amount of truth to the theory and probably is cause for SOME of the relentless beating. They have to keep the illusion that the dollar is fine, we have no inflation, and our economy is sound. So I'll go along with that to some extent.
But I also think that as more and more countries are trying to repatriate their gold, they might be trying to get the price really low so it doesn't look so important any more. Remember when Germany called the US and said "we'd like our gold back", first we told them no, and then announced it would take 7 years to send their gold back to them. Then when the first tiny shipment went over, it wasn't even the registered bars they had put in the Fed's vaults. They got 'refined" bars. Where were their original bars??
I believe 100% that the real reason Gold stopped in its tracks in 2011, was that China made threats to dump treasuries over all the money printing and bail outs here in the US. Don't forget folks that China holds trillions in foreign currency assets and they didn't much like seeing the value of those assets plunging. I absolutely feel that our Treasury and our Fed's put in place a deal to take gold down a bit, so China could amass enough of it to offset a plunging dollar. A "hedge" so to speak. In fact we wrote many articles at the time explaining the entire "deal".
The basics were that the US was still going to do QE, but to offset any weakness in dollar value, they'd pull down the price of gold so that China could buy it as a hedge. China has continued to amass the stuff, and still does to this day. In fact just Sunday at the APEC meeting in Bejing, this made the headlines: " China should accumulate 8,500 tonnes in official gold reserves, more than the US," according to Song Xin, President of the China Gold Association, General Manager of the China National Gold Group Corporation and Party Secretary.
So part one of the gold price beat down, was to satiate China and keep them from going economically nuclear on us by wholesale dumping our junky Treasuries. China gets to amass gold "on sale" and the Fed's don't have to worry about hundreds of billions of Treasuries hitting the market. Another part was to try and get nations to abandon their desire to repatriate their gold, because frankly it isn't there.
But I believe the next reason is much more sinister, dark and evil. I don't think the reason for the gold beat down is to keep the illusion that the dollar is healthy. I also don't think the Chinese expected us to drive the price down to where it is. I think the real reason it has gone on so long is because they want you TRAPPED with no where to go. They want you traceable, accountable, and they want access to you and your money. In other words, they want you TAXABLE and with no other options than Treasuries and stocks.
Let's say you had 100 gold one ounce coins you bought at 400 dollars an ounce. You laid out 40,000 to buy them. But you bought them "a few here, a few there" sort of thing. There was no reporting to anyone about your purchases. Then by 2011, gold was at 1900 and looking higher. Your 40K is now 190,000 and Uncle Sam doesn't know about it. That's 150K dollars worth of "income" that they don't get a piece of. He HATES that idea with a passion. But worse, as the metal was running higher, and silver was running even more on a percentage basis, more and more people were making a killing, but they didn't have any system in place to tax it all.
Consider what I'm saying in this context. Let's suppose you had ten thousand dollars under your mattress. You want to do something with it because you know that inflation is eating it up. You can't even go to the grocery store without having a seizure over the prices. In the past you could say "hey, I'll buy a few gold coins, because gold always rises in an inflationary period and the Central banks have printed 4 trillion "inflations" lately. That would have been a sound strategy, because indeed, gold is the protector of value over the long haul.
But as more and more people were catching on, and doing just that, buying silver and gold to evade the effects of inflation, they were making money without Uncle Sam knowing how much, and not getting any taxes on it. That's a major no-no in their book. But it gets considerably worse. As they abuse the dollar, print their bogus money and speed our way to an economic crash, they don't want any "gold bugs" coming out the other side of the train wreck looking great.
By doing what they've done; crushing the price of silver and gold, just WHAT options do you have right now? You can buy a CD at the bank and get ½ of a percent. You can hold cash and lose at least 5% a year in inflation. You can buy gold and silver but... you might lose money if they beat it lower. Yes you can buy Treasuries and make less than the inflation that will eat you alive. Yet they desperately want you in stocks and Treasuries.
You can buy stocks, but you know they're only up where they are because of 5 years of manipulation. That could change in a heartbeat. What better way to steal everyone's money than to "force" them out of saving and into the market, and then secretly go short in Dark pools, and crash the market? They'd rake in trillions and 95% of the citizens wouldn't even know that it was a rigged crash.
I was wrong about the length of time they could cap the metals. I have no problem in saying that. I also don't know how low they can go. They've already driven it lower than I thought they could. But all that said, I'm still a buyer of the metals, and for a laundry list of reasons. One is that I'm firmly convinced the current "system" is broken and cannot be repaired. Whether it's a monetary global reset, or what have you, when you see Japan announcing they're going to go full stupid and print 80 trillion, you know we're on the edge of massive troubles.
But I think the real reason I'm still amassing gold and silver is because "they are". Who's they? Again, think about what China just told us... they want to have more than 8K tons. Russia is buying. India is buying. In all of history, through all the currencies and Empires that have crashed, gold and silver have never been worthless. Yet every paper currency has been. I think the Chinese understand this, and are planning for that day. I want to also. But there's even more reasons...
My bet is that China already has 8K tons of gold or possibly even more. But hey, if the Fed's are going to continue to push the price down, they'll be more than happy to buy it on sale. Remember folks their "official" statement about their gold holding is ludicrous. Every good independent investigator I know believes that China has at least 3 times their official statements and possibly much more.
Last week Alan "Bubbles" Greenspan did another 180 degree flip and says that now gold is money, and that you should have some. He said QE was a failure at everything but boosting stock prices. This is the guy who while being the head of the Federal Reserve called it a barbarous relic. Now that he's not a Fed head, he loves the stuff. See Greenspan loved gold before he became the Federal Reserve Chairman. He even wrote a college thesis paper about how ONLY gold can be a money. Then flipped and hated it at the Fed, and now loves it again. Interesting, eh?
On top of that, come November 30th, the Swiss are going to have a national vote about backing their currency with 20% gold. If that vote passes and I think it will, they need to amass 1750 tons of gold in the next 3 years. Where's it going to come from? Will the demand help push gold higher?
In NO other market on earth can demand outstrip supply so badly that mints have to go dark because they have no metal, and yet the prices fall. China says they want to buy another 6 K tons. The Russians bought hundreds of tons. The swiss might have to buy a couple thousand tons. And yet prices FALL?
The metals market is completely rigged folks. They've rigged it for longer than I thought they could, but my bet is that like all illegal schemes, it will end. And when it does...I think gold and silver have a rocket ride higher. I don't know when that will be, but I do believe it's coming. I believe it so much, I continue to buy it.
Could I be wrong? Sure. I've been wrong before. But I ask the simple question...do you really think we get out of this mess we're in unscathed? If not, then what other choice is there?
Let me wrap up with this...I began buying gold in mid 2000. I pounded the table on it, saying it would go to 1K dollars in ten years. I looked pretty smart when sure enough gold went from 290 to over 1000 in ten years. Every one of the reasons for me to like gold in 2000 are still in effect. The only new twist is the absolutely illegal activity of our CB's and our complicit regulators that have been paid off to "look the other way". Okay, so that's a twist I didn't count on, and they're better at it than I gave them credit for. But it doesn't change the fundamentals. We're broke, living on debt and fraud, and this will not end well. They've delayed the crash, but you can't avoid it completely. It's coming. Just like it was in 2000. The Market...
The timing was perfect, considering my commentary about Gold being rigged for longer than I thought they could rig it. The news today was all about how 5 major banks were being fined for over 3 billion dollars for rigging client accounts, front running, manipulating foreign exchange rates, etc. In the case of UBS there's even evidence of rigging in the metals market.
My response to that is ... Ya think??? Realize this folks: the bankers have been fined OVER 35 BILLION dollars because of rigging the LIBOR rate, the exchange rates, the Gold and Silver "fixes", front running, Rob0-mortgage signing, etc etc etc. This is what makes investing such a challenge today, because every single thing you're told is BEE ESSSS.
Of Course all that came after the revelation on Monday that the architect of Obama care, said that it was passed by deception and the "stupidity of the American voter". Again to which I have to ask...'ya think??" Every once in a blue moon I do get to smile. The whole damn world is a fraud and occasionally it gets exposed.
Speaking of fraud markets, we expected the market to do a bit of a pull back when the DOW got to the 17,500 - 600 level and the S&P between 2040 and 2050. Well Yesterday the market looked like it had finally run out of gas. In fact overnight the futures went red and this morning we opened with a 60 point opening dip. But it wasn't to be....they worked the magic levitation levers and by 3 pm we had eeked into the green. They just weren't willing to let it go. But when the final bell rang we were red by a whopping 2 points. The S&P lost 1.5.
So are we going to avoid a pullback? It's possible. Remember folks the market can work off an overbought situation two ways. It can fall in price, OR it can wobble sideways and let "time" do the repair work on the technicals. Yesterday and today they decided to do the sideways wiggle and let time do the lifting.
One side of me says that this is all they're going to do, and then they're going to kick us up into a new leg higher. It makes sense because they've certainly had reason enough to do some profit taking and they haven't. YET. But I'm just not totally convinced yet. We're dead center in the area that we suggested would be pull back territory and we've seen them pause for two days in a row now. While it seems like they'll resolve this to the upside, we just aren't certain right now.
One of the areas that's starting to perk up is the gold and silver miners. While they haven't made the correct patterns yet to get me involved, they are setting up. So you'll want to watch that patch in the coming week or two. Likely names are NEM, AU, and GG to start.
In our Insiders Club, we took some nice profits on NRG, Sold half our ISIS for almost 3 dollars a share, and we're in BTU, and the QQQ's. If the market resolves itself by moving higher, we'll add more positions, but we're comfy with the 3 we have now.
So watch for the market to clear 17,638 and HOLD a full day before thinking that it's ready to move higher, and start to watch the miners, healthcare and some technology. While tech has moved very well already, they often run them into year end.
Good luck and we'll see you all on Sunday.
PS.. If you'd like to see the exact stocks/options/metals/ETF's and 401K moves we will be looking at for this week, please consider becoming a member of the "Insiders Club" located here: www.investyourself.com