Several VERY IMPORTANT things to note today, on YET ANOTHER day of MISERABLY FAILED Cartel manipulation.
To start, I wanted to note how impressive the gold action has been, now TWO straight days blowing through the 12:00 PM EST “cap of last resort” as if it didn’t exist. Per the charts below, it should be pretty obvious the Cartel’s efforts were laughable, with gold in both cases closing at the highs of the day.
To the untrained eye, this may look trivial, but to the man who published the “2010 and 2011 Daily COMEX Manipulation Pictorials”, it is not. The Cartel has successfully stopped ANY AND ALL gold rallies at 12:00 PM EST for at least the past two years, but all of a sudden their efforts are no longer working, now that we have reached the era of “Manipulation Saturation,” per my July 27th RANT.
Heck, even SILVER managed to close above $40/oz, despite the most maniacal capping efforts I have seen in some time around that KEY ROUND NUMBER. Boy, I can’t wait to see if they can get it back under $40 by the end of the COMEX options expiration data next week!
And one more topic before I get to the subject of this RANT, and that topic is the U.S. debt limit. Does anyone remember that little issue, you know the one that received 24/7 attention two weeks ago, and eventually led to a gold price explosion and S&P debt downgrade?
Well I certainly do, and wanted to give a tiny little update. You decide if this is important or not (facetious).
OK, let’s see.
The debt ceiling deal allowed for an immediate $400 billion increase as of August 2nd, from $14.292 trillion to $14.692 trillion. Next, “measures” will be put in place to raise it by an additional $500 billion, “as soon as September.” Finally, a bipartisan committee will recommend additional cuts of $1.2 -$1.5 trilllion, which would enable a dollar-for-dollar debt ceiling increase, by “year-end”.
Amazingly, I cannot find A SINGLE ARTICLE with more articulated details about this issue, which nearly just destroyed America, than the rough table below! Moreover, I have a sneaking suspicion that many of those details were never “worked out” in the first place!
And here’s the rub:
We are just two weeks past the satanic deal’s consummation, yet the national debt has ALREADY SOARED TO $16.615 trillion (and counting), or just $77 billion from the new ceiling! In other words, we’re on a pace to hit the $16.692 trillion ceiling in just a matter of weeks!
Oh yeah, did I mention that the ENTIRE CONGRESS JUST LEFT FOR A MONTH-LONG VACATION, not scheduled to return until September 5th?
If this is the case, how can we NOT default in September, particularly when the “measures” to raise the debt ceiling by an additional $500 billion are not specified anywhere? Not to mention, the fourth calendar quarter (or first government fiscal quarter) is typically the heaviest spending period of the year, as numerous expenses are pushed out a year to “paint the tape” on current year budget numbers.
In other words, the entire Congress is on vacation with the new debt limit about to be breached, no real game plan for achieving the next ($500 billion) milestone, and the heaviest spending period of the year barreling down the tracks at 100+ mph. With little or no press coverage, to boot!
And don’t even get me going on the $1.2-$1.5 trillion of “additional cuts” anticipated by “year-end” from a “bipartisan committee.” After what we just observed, does ANYONE believe the Democrats and Republicans will come to agreement on this issue? Or will they just steal from government pension funds again (if there’s anything left)?
It is simply awe-inspiring to watch how rapidly America is spinning down the toilet, but even more amazing to observe how little press coverage this GARGANTUAN issue is receiving, as well as how little the average person has cared up until this cataclysmic point!
BUT…..that’s starting to CHANGE, and it’s starting NOW!
In my nearly ten years as a Wall Street sell-side analyst (oilfield equipment & services, Salomon Smith Barney), the most valuable commodity I provided clients was anecdotal data suggesting something the masses did not know. Sometimes it involved a mosaic of observations, and other times simply a brief conversation with field operations staff (as opposed to the typical conversations with senior management and investor relations). I developed a knack for seeking out such data, and anyone that reads my RANTS has probably figured this out.
When it comes to gold manipulation, I have EXHAUSTIVELY watched every tick for the past 9½ years, and particularly the past year (since “D-Day” on 11/9/10), watching and waiting for what I could interpret as meaningful chinks in the Cartel’s armor. The aforementioned 2010 and 2011 COMEX Daily Manipulation Pictorials are good examples of this legwork, as well as the CARTEL PHYSICAL CRISIS table which helped me identify when the Cartel reached “Manipulation Saturation” last month (see below).
The recent daily action of the gold markets, as depicted by the two charts atop this RANT, PROVE I was right in my conclusions, so I believe a parabolic run to $2,000+ is now a fait accompli in the coming months, and potentially much, much higher if TPTB are not successful in maintaining the phony façade of control to global market participants.
Now that we’ve cleared that hurdle, the next thing I am looking for is evidence that the PUBLIC is ready to enter this market, since we are all WELL AWARE that, to this point, nearly ALL of the Western World investing public, PARTICULARLY in the U.S., has been COMPLETELY AND UTTERLY OUT of Precious Metals, the victim of both a lack of due diligence and the persistent misinformation (at best) and, at worst, pure propaganda from Wall Street and Washington to prevent them from PROTECTING THEMSELVES from the rising tide of inflation. Throw in a healthy dose of CARTEL MANIPULATION, which has made the action in this sector both enigmatic and counter-intuitive for years, and you have literally MILLIONS of potential PM investors OUT of the market, but ready to enter en masse at any time, in a RUSH of both GREED and FEAR.
Anyhow, the anecdotal “tid bit” I’d like to share (haven’t used that term since 2005) relates to what I have observed in my day-to-day business here at Torrey Hills Capital, where we help junior mining companies to market themselves to the retail and institutional public here in the States. For the past six months, despite steadily rising gold and silver prices week after week, I have seen ESSENTIALLY ZERO “genuine” interest in Precious Metals. Sure, there are always investors looking for new stock ideas, but by and large, despite the startlingly stark YTD performances below (year after year, for that matter), I have felt like having a party ANY TIME I find someone genuinely interested in gold and silver investing, and a catered black-tie affair at Buckingham Palace when I came across someone that truly understood, or even showed an real inclination to learn, the REAL reasons behind WHY one should be investing in the sector.
HOWEVER, THAT APPEARS TO BE CHANGING NOW, AS I WRITE, AND I AM POSITIVE THIS TREND WILL DRAMATICALLY ACCELERATE IN THE COMING MONTHS.
As the summer draws to its close, the financial world has been hit by a PERFECT STORM of collapsing economies, sovereign debt issues, global quantitative easing, and social unrest (capped off by the London riots), cumulatively resulting in some of the most volatile market conditions imaginable (despite MASSIVE government intervention in the stock, bond, currency, and commodity markets), culminating in a shocking (to the ignorant) parabolic move in gold, which has even prompted the dolts at CNBC to flash the gold price across the BOTTOM of the screen essentially ALL DAY LONG!
Clearly, EVERYONE from brokers to portfolio managers to Joe and Jane Sixpack are finally aware that SOMETHING wicked may be coming this way, as well as that GOLD, the “Once and Future King” per my August 9th RANT is re-establishing itself as the historic GLOBAL RESERVE CURRENCY it has always been, and will always be. In other words, not only are the ragingy bullish Precious Metal fundamentals on the cusp of reaching a fever pitch, but they are doing so (not uncoincidentally) just as the COVERT Cartel is LOSING CONTROL of their decade-long, illegal suppression scheme. That fractional reserve, derivative-anchored Ponzi scheme will soon be DESTROYED FOREVER (yielding an even more dramatic parabolic move), just as what occurred following dissolution of the OVERT London Gold Pool in 1968.
Yes, the triumvirate of EVIL in Washington, NY, and London will fight to the death, but they WILL LOSE, and when they do a financial market Pandora’s Box will open unlike anything in human history, one in which you will either be PROTECTED, or you will not.
During the past week alone, I have had more lengthy and intelligent conversations with previously disinterested (or barely peripherally interested) investment professionals regarding gold and silver than in the entire 9½ years I have been involved in this sector. Just mentioning my expertise in gold and silver has more often than not prompted long sessions of QUESTIONING my knowledge and intently LISTENING to my answers, even when TABOO SUBJECTS such as price manipulation are brought up. I have answered “are we in a gold bubble?” numerous times in the past week, and believe strongly that the enquirers understood my explanations.
I am certain this trend is no fluke, that by and large the investment public is starting to WATCH AND LISTEN to what the Precious Market are telling us, although I doubt any have yet made investments (but don’t worry, they will). So is it any surprise WHY the Cartel has been so maniacal in its suppression scheme, and why organizations like GATA have been so blatantly shunned by the ELITES in Washington, on Wall Street, and in the puppet media?
Rest assured, we are very, very early in the gold and silver game, by my calculation the SECOND INNING OF AN EXTRA INNING GAME, and not until the public enters the sector will be even reach the middle innings, in my view (the extra innings, by the way, will be hyperinflation). Given all I see around me, and how rapidly such trends are advancing (particularly as we enter the Fall, the most dangerous period for financial markets and the most fruitful for gold and silver demand, I believe we will see sharply higher public participation in the PM markets by year-end, and consequently significantly higher gold and silver prices.
Moreover, I believe 2012 will be the year that widespread public interest in Precious Metals yields a demand explosion, as FEAR takes over as the predominant catalyst for buying, rather than the GREED we are more likely to observe in 2011. At that point, all semblance of U.S. Government/Fed/ECB/BOJ CONTROL of the downward spiraling global economy should be gone, leading to GENUINE gold and silver shortages, and eventually the “no offer” stage sometime in the next 12-18 months that will likely yield the true END GAME to the failed post-1971 global fiat-currency expirement.
In other words, PROTECT YOURSELF, and do it NOW!
Andrew C. Hoffman, CFA
San Diego Torrey Hills Capital
B (720) 350-4130
C (917) 324-7602