Gold and Silver Looking Good; Caution Warranted

Tuesday, February 21, 2012 at 11:53 am

So, there you have it. The technocrats of Europe have spun up a deal to prolong the illusion that all might one day be well. This was expected simply because a default cannot be allowed for the reasons we laid out yesterday. The fiat currency reaction has been muted but the metals are rallying, regardless, due to the money creation that will be the end result of this latest "bailout".

I'll dispense with the news and analysis this morning and simply head to the charts. First, here's gold. Until and unless gold is allowed to trade through the top end of its range, there is no real change. On balance, the slide since the BLSBS report seems to have run its course and gold has made a nice, little bowl-shaped bottom on this chart. Now, I expect a punch toward the early February highs of 1760 or so. There, you'll find The Forces of Darkness waiting. Look for them to drop the hammer and attempt to drive gold back down to 1730-35. IF this comes to pass, I'll be ready to buy.

So, now, here's The Pig. This chart is all-important as it is still acting as an inverse to silver and silver is my primary concern, right now. Note that Pigatha, after attempting to break out last week, has fallen right back into the middle of its range that began about a month ago with the FOMC minutes.

Again, compare the chart above with the chart below. Any dollar strength translates directly into silver weakness and vice versa. Predictable, yes, but very frustrating. I would much prefer that silver trade on its own fundamentals, instead.

OK, so now here's the problem. I must admit to having read some other websites and emails where the authors claim that silver lease rates have nothing to do with price and should be ignored. Who knows, maybe they're right. Most of those folks are way smarter than I am and, from a long-term perspective, it all comes out in the wash, anyway. However, if you're trading or looking to swap some more fiat for physical soon, you absolutely must be cognizant of the chart below. As you can plainly see, the last two dips below -0.40% in the one-month lease rate have been followed within a week by steep drops in paper price. Additionally, last Friday's CoT showed another increase in the net short position of the EE.

If a significant raid materializes later this week or early next, I would look for silver to cascade down to at least 32, though 31 would be a possibility and 30 would not be out of the question. IF we can get that to happen, it would be an extraordinarily wonderful buying opportunity. The daily chart would have a long-term reverse H&S painted upon it and we could all aggressively buy with a very high level of confidence. Therefore, be patient and cautious. Let's see how this all plays out.

Speaking of massive, reverse H&S breakouts, take a look at this long-term chart of crude. The rally from Monday stopped at $105 and that is significant because a close above there clearly foreshadows a run to $115 and, beyond there, the old highs of 2008. Gasoline prices in the U.S. are already reaching $4/gallon in some places and even $5/gallon in California. And it's only February!! Combine $115+ crude with summer driving demand and you'll see $5/gallon gasoline nearly everywhere. "Big deal", you say, "I don't drive that much anyway". Ah, but it is a big deal! Nearly everything in this country is grown, manufactured, packaged and transported through the use of petroleum products. Already our cost-push inflation is averaging 10% on staple items. In a few months, it might be annualizing at 20%+. Combine that with $5 gas and you've set the stage for what could be major and serious civil unrest later this summer.

As I close, I see that gold is 1756 and silver is 34.15. I strongly urge you not to chase here. Buying high and selling low is the primary way that metals traders get cleaned out. I, for one, am watching from the sidelines and waiting to see where we go from here.

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First

Submitted by Zenith on February 21, 2012 - 11:57am.

maybe....

1st first

Submitted by cliff 567 on February 21, 2012 - 11:58am.

1st

Tada

Doah

Not me!

Submitted by Bugzy on February 21, 2012 - 11:59am.

Surely. DOH! not first.

The Gods of Thunder and Lightning

Submitted by Be Prepared on February 21, 2012 - 12:00pm.

are rattling the cages of the market!

Turd, I agree with you that chasing this market mid-move could get you upside down quickly. It's interesting that the silver lease rate may be indicating a pull back, but it's entirely believable. I wonder how much silver is really left in the comex... the world may never know (at least, for now). Thanks for putting together a great mid-day post!

To the Victor go the spoils.

Submitted by Eric Original on February 21, 2012 - 12:01pm.

To the Victor go the spoils. Hat Tip to Zenith, cold gruel for the rest....

Race for first at TF Metals

Submitted by Desert Fox on February 21, 2012 - 12:07pm.

As you can imagine, I'm not even in the photo. lol

OK, Let's get serious about a hard push past 1770 with some room to spare.

Let's get this party started. This is the week!

First?

Submitted by Fulgurite on February 21, 2012 - 12:08pm.

F*cking children!

maybe you are after all, fox.

Submitted by brad_pitts_bett... on February 21, 2012 - 12:12pm.

the guy furthest to the left in the white shirt...

no, not winning

about to be lapped ;)

little confidence this move will have legs tf?

PSLV Premium Up

Submitted by Sturdy Fergusov on February 21, 2012 - 12:16pm.

Not sure if/how that relates to the action in PM this morning but PSLV premium is up 1.7% as of 11AM EST

They can't even push it down for the LBMA close

Submitted by lairdwd on February 21, 2012 - 12:16pm.

Freaking AWESOME action! Let's get that final push up to 1760/34.5 before the crimex close.

The Greek Parrot

Submitted by sniem on February 21, 2012 - 12:17pm.

‎"Oh yes, the, uh, the Greek debt...What's,uh...What's wrong with it?"

"I'll tell you what's wrong with it, my lad. it's in default, that's what's wrong with it!"

"No, no, it's uh,..it's getting a 'haircut'.

"Look, matey, I know a default when I see one, and I'm looking at one right now.

"No no it's not a default, it's a haircut'. Remarkable bonds! , the Aegean Blue, idn'it, ay? Beautiful C rating !

Spoke with my metals guy in Pasadina, CA

Submitted by Exbroker on February 21, 2012 - 12:18pm.

Trying to get the lay of the land in the retail sector. No buyers...no sellers...dead in the water.

Poor America- Panorama Report from BBC

Submitted by junoroland on February 21, 2012 - 12:20pm.

man this is depressing. bbc made this feb 13th. as bad as things might be in ireland we aint seen nothing like this.

Turd - I too did a bunch of research on negative lease rates

Submitted by lairdwd on February 21, 2012 - 12:23pm.

Here are my observations

1) Negative lease rates have much more meaning with gold than silver

2) There is a much higher degree of correlation when gold lease rates "dive" in a short time frame, versus a slow gradual descent, like we see in silver now. That means the central banks want to push gold lower.

3) There are different thoughts and opinions to the significance.

4) I can't seem to get a straight story with the significance to silver. It's supposed to be indicative of high liquidity, yet Ted Butlar, et. al - seem to think that silver is in a LOW liquidity situation.

5) Today's price action in silver SUCKS - which gives more credence to a possible raid down the road. It should be at 34.20 to 34.5 right now. Let's see what happens later today.

6) The lease rates published by LBMA aren't the real lease rates that are used, they are an approximation.

In summary, when I see the gold lease rates take a dive, like we saw in December - that's the time to get out of gold, and the same can probably be said for silver.

Caution

Submitted by Alex on February 21, 2012 - 12:27pm.

Caution is certainly warranted this week. Lots of pieces to the puzzle in play.

Lease rates -40% are one concern if recent history is a window to future direction but as some have said, it could also be bullish. I can't discount the past charts so I don't discount the possibility that while a negative lease rate may itself not be cause for silver prices to decrease, it could most definitely be a signal/reason for TPTB to apply air brakes shortely thereafter.

At any rate, the long term downtrend is possibly the biggest cause to be cautious this week. The line is at $34.90 today through $34.70 later this week and algos will be in a hizzy.

I do find it interesting that all these pieces are falling into place around the time that silver would touch that trendline.

RICKARDS

Submitted by boatman on February 21, 2012 - 12:29pm.

dissing Jim cause the govmint paid him for some work is like saying ron paul is not a good guy 'cause he's a congressmen.

Thanks for the update Turd

Submitted by Pining 4 the Fjords on February 21, 2012 - 12:29pm.

I bet Mr. Hyde is crowing about his UCO calls right about now. Being long commodities in general seems like a good play through the summer, but I would love to hear from Art Lomax what the skinny is on grains... Charts and fundos for ag commods look really good to me, and could pay off nicely if the Fed gins up some election year inflation. Art, you out there...?

Thanks to Zoltan and Paulindoon for answering my question about a website showing max pain for Op Ex... Gracias amigos!

I agree

Submitted by Turd Ferguson on February 21, 2012 - 12:30pm.

MODERATOR

Thanks, laird.

Silver could very easily continue higher from here and all will be well. However, with the growing EE net short position and 1-month rate at -.40%, we've got to be cautious.

I have a hunch that silver will be allowed to rise toward $35. This will suck in a few extra, fresh longs to the party and $35-35.50 is a very key resistance level. IF that happens and lease rates spike lower to -0.45% or so, I'd be nearly positive that a raid is coming.

Again, be cautious.

Response to: Turd - I too did a bunch of research on negative lease rates

Turd gives sage advice to

Submitted by Dr G on February 21, 2012 - 12:30pm.

Turd gives sage advice to watch where this is going, however I had to purchase physical today. Days to purchase phyzz for me only come around once in a life...ahh, who am I kidding? Days to purchase phyzz come around every Tuesday, Thursday, and Saturday. :)

I have you beat

Submitted by Exbroker on February 21, 2012 - 12:30pm.

This is even more depressing:

The whole crew at TFM should watch this before Janet has it pulled from YouTube

This is sad, and treasenous

To add to Turd's post, silver

Submitted by Dr G on February 21, 2012 - 12:31pm.

To add to Turd's post, silver lease rates have now risen by .0483 which puts them at -0.3562. So, for today at least, the 1-month lease rates are moving higher, not lower. Could be a trap, I dunno, I'm not smart enough to figure it out. All I know is I just scored ASEs for $1.50 over spot online. Good enough for me.

See the specific lease rate changes for all metals here: http://www.kitco.com/market/LFrate.html

Alex, good stuff

Submitted by Turd Ferguson on February 21, 2012 - 12:35pm.

MODERATOR

Though I think the trendline needs to be drawn just a shade higher, putting it right now at about $36.

You can plainly see on your chart where The Battle Royale will be. Soon, that trendline will intersect with the key $35-35.50 resistance area and the 200-day moving average.

That will be The Battle of Battles. Once we break through there, IT'S ON!

Response to: Caution

Re: Art

Submitted by Turd Ferguson on February 21, 2012 - 12:38pm.

MODERATOR

I've asked him to cook up a "guest post" just in time for planting expectations, etc in March. He's working on it now so look for it in a few weeks.

For those interested in this stuff, there's an ETF with the symbol DAG. It is 25% corn, 25% wheat, 25% beans and 25% sugar. Might be a fun and simple way to fiddle with the ags this spring.

http://finance.yahoo.com/q?s=dag&ql=1

Response to: Thanks for the update Turd

RE: lairdwd

Submitted by Sturdy Fergusov on February 21, 2012 - 12:41pm.

lairdwd said: 5) Today's price action in silver SUCKS - which gives more credence to a possible raid down the road. It should be at 34.20 to 34.5 right now. Let's see what happens later today.

I completely agree that there could be a raid any moment and price of silver may dip. But why do you find that the "price action in silver SUCKS" as of 11:23AM this morning when silver is the third best performer of the day just next to the Copper and Cocoa? Just trying to understand whether I'm missing something...

Caution is required though I'm more than agree!

I'll take Trebek's mother for $100

Submitted by Sean Connery on February 21, 2012 - 12:42pm.

Oh well, bought 1 gold and a hundred silver maples last night but no interest on my credit card until apr. 2013!

please read

Submitted by Turd Ferguson on February 21, 2012 - 12:43pm.

MODERATOR

http://www.zerohedge.com/news/here-why-dow-just-passed-13000

Also, given that there was NO

Submitted by Turd Ferguson on February 21, 2012 - 12:44pm.

MODERATOR

Also, given that there was NO Cartel raid at 3:00 am OR 8:20 am should give you pause, too.

Allowing it to rise to suck in a few more spec longs??

Response to: RE: lairdwd

This article on ZH from the

Submitted by Dr G on February 21, 2012 - 12:44pm.

This article (charts) on ZH from the Tylers is a must read in my opinion: Dow passes 13000 in nominal terms, here is the real picture

Note that when valued in our beloved gold, the Dow is down 50% since May 08.

Long Options

Submitted by GoldMania3000 on February 21, 2012 - 12:44pm.

Last summer I bought December 2013 gold options 1750-1800. I sold half last time we got toward 1750 and sold the remaining today. I don't want to get greedy and want to take profit. Yes gold may go up to 1900, but i still have coverage at the higher range.

My point is that with all this back and forth over the past 8 months, etc. I had coverage and knew that we would get back to a point where I could sell. My strategy is now to wait and hold some cash to buy more later.

Real life

Submitted by Irene on February 21, 2012 - 12:45pm.

Can't wait to hear about cost-push inflation in the MSM. They'll probably accompany it with howls demanding the government freeze prices again once things really heat up. For anybody who didn't live through the 70s, get ready for fun times. For many already-beleaguered businesses across this country, this will be the death knell. Not good, not good. I was a young teen, my dad died in '72, and I had to manage one of the businesses. On a weekly basis, prices would jump so much that sales revenues from the previous week (with normal profit margins) could no longer replace sold inventory, let alone cover other costs. We had a lot of foreign goods and sometimes I would just stare at the salesmen - prices having doubled and tripled since their last monthly visit. We made it through just by sheer stubbornness. It's a very fine line to walk and very stressful. Constant judgments being made on every item purchased and how much you think it's going to go up, how much you think you can charge your customers without losing them, etc.

So many variables, so little time. I don't miss those years at all. (I think I read that in CT it is still illegal to reprice merchandise that is on the shelves.)

Did I mention the upswing in crime? Not surprisingly, there was that too, big time. Gangs + drugs + frightened citizenry + ineffective government. Diabolical schemes left people shaking and stunned. As an example, one gang, claiming that they had reformed, made a deal with the city (!) and offered to paint the apartments of inner-city seniors, for free! Yes, they did that, and then all those seniors were robbed and worse. Changes were happening throughout society and people were just plain unprepared for what was happening around them. This time around, it'll be a lot worse.

While it's true that inflation is terrible, what it really represents is the failure of a society. It's not just the economics, that is just one of the final symptoms. A million choices brought us to this point. We could have stopped it many, many times. And now we can't.

Maybe to suck in more spec

Submitted by Dr G on February 21, 2012 - 12:46pm.

Maybe to suck in more spec longs, but perhaps they can't raid on a day when 170 billion has been committed to being pumped into the system? Too obvious, even for the Cartel?

Thank you for your reply

Submitted by Sturdy Fergusov on February 21, 2012 - 12:48pm.

Thank you for your reply Turd! Makes perfect sense.

TFMR Exclusive - Ron Paul in Kansas City

Submitted by Mudsharkbytes on February 21, 2012 - 12:51pm.

There was a post on the previous thread about the comments Ron Paul made in Kansas City about America moving increasingly towards fascism.

I was at that rally, first time I saw Ron Paul live, and thought at the time I heard it that his comment might be picked up by the media, since I don't remember ever hearing him make such a statement before.

Regardless, the next day a local news outlet said, and I paraphrase, 'several hundred Ron Paul supporters, maybe as many as a thousand, showed up'. BS, easily 2 to 3 thousand people were there.

For me the most memorable comment he made was an anecdote about the house vote on the Patriot act. He was talking to another representative, he didn't reveal who it was, who told him he just had to vote for it because how could he go home to his constituents and explain why he voted against it? Paul said he told him his job was to explain to his constituents exactly WHY he voted against it.

Here's some pictures from the event, which you will see nowhere else but TFMR.com:

Here's a shot of the "several hundred" supporters:

It's hard to see, but the hallway is full all the way to the back.

RP from my vantage point:

My son grabbed the camera and got a LOT closer:

I've a lot more pics, but you get the idea.

Dow 13K

Submitted by Desert Fox on February 21, 2012 - 12:51pm.

Best comment at Zerohedge concerning Dow 13K,,,,

"Looks like we're gonna have to kill Osama Bin Laden again real soon".

That's too funny!

Learning...

Submitted by Sturdy Fergusov on February 21, 2012 - 12:53pm.

I can't believe how much stuff one can learn from this site. Before I would think NO Cartel raid at 3:00 am OR 8:20 am was a good thing. But thinking about what Turd says does give me a pause... No wonder I always used to make long-term right moves in short-term wrong times... Thanks Turd once again for all your posts and lessons!

Hi Turdites

Submitted by sewfarsewgood on February 21, 2012 - 12:55pm.

First time poster (First!) but a longtime reader and stacker. Thank you Turd for building this community. I've followed you from ZH and the WatchTower blog.

I would add to Turd's caution with a reminder that Thursday is option expiry on silver futures. Ain't no way 34 Calls will be left sitting in the money. I'm thinking the 33 Call could be targeted too. Jesse frequently puts up a good silver chart annotated with option expiry hit jobs. I'll look for the link. Its as compelling an indicator as lease rates, and I suspect a coordinated approach. Currently 2/3 fiat in the play dough account waiting and watching how the week unfolds.

~sfsg

@Exbroker - Regarding Gold dealers in California

Submitted by Strongsidejedi on February 21, 2012 - 1:01pm.

I agree with you Exbroker - coin shops in this area of So Cal also well stocked and little sales.

I think the breathtaking manipulation in 2011 is taking a toll.

More importantly, we're seeing substantial elevation in gas prices - currently at $4.20 a gallon now in local areas.

I filled up at a station that was $3.95 and felt good about it. lol.

This stock rally is a joke. MSN has dow passes 13,000 again as a headline.

I have to think that the volume must suck. No one wants to play in that cesspool of a market.

MFGlobal only leads me to want to stack more, but I need to crank more work and just did a 15 hour plus shift yesterday and a 12 hour shift to come today.

Many blessings to you all today.

I may not be posting much these days because the work is hurting me and yet my family needs the money.

It sucks to be here in California.

And, one side comment to the BBC Panorama story which misquoted Newt Gingrich and Ron Paul, Gingrich's comment was not about the morality of putting kids to work. Newt was trying to comment on the over reaching government rules on wages and payments. Newt is right about the overreaching nature of government rules over how people get paid in the United States. Ron Paul's response to the issue of "letting the guy die" was also very mischaracterized by the reporter.

The point of Dr. Ron Paul's response was totally lost on the BBC reporter. I just spent 15 minutes trying to locate video of Ron Paul's complete answer on Youtube and could not locate a single copy which did not interrupt the man's answer or misquote him.

The closest I could find was this link:

You can see Dr. Paul's answer at the very end where he says "I practiced at Santa Rosa Hospital in San Antonio. The churches took care of them. We never turned anybody away."

He's straight on correct.

The government run healthcare system has utterly communized this society. Doctors used to help their neighbor and would trade services for goods as well as fiat dollars.

I've talked with doctors in this area who are thrown out of their homes because the government or the government funded insurer failed to make good on contract. There is no way for the doctor to sue the insurer or to sue the government for the fraud on their end. Instead, the government just passes new laws and new demands while the doctors and nurses suffer and die.

Rickards

Submitted by GoldMania3000 on February 21, 2012 - 1:07pm.

anyone that has a problem with owes it to him to say it to him. He's easily accessible via Twitter. You can call him whatever you want and accuse him. If you really have guts and are an adult-speak your mind to that person and let them respond to you. Otherwise you're just a chicken shit

+1000 to the above GoldMania

Submitted by Dr G on February 21, 2012 - 1:08pm.

+1000 to the above GoldMania comment.

Thanks

Submitted by LOUP-GAROU on February 21, 2012 - 1:11pm.

Thanks Turd, as usual great stuff, as for hoping silver trading on it's own fundamentals sorry our fearless leaders wont let anything trade on their own fundamentals! looks like all they want is to see dow reaching 13,000

Re: Given that there was no raid,,,,,,,,,,,,,,,,,,,

Submitted by abguy4 on February 21, 2012 - 1:14pm.

I've only been doing this Ag thing for 4 years

BUT, every EVERY time the Ag price goes up toooo fast..........

It is followed by a big drop.

I am hearing that sucking sound.

Sucking the fence sitters into a long position,

bringin' in the sheep for a shearin'

A newb opinion on next pm/eur/usd moves

Submitted by labestiol on February 21, 2012 - 1:15pm.

I'm not a big poster here, really started to learn about all this one year ago. And i learned a lot, thanks to folks here, zh, and other various sources. And I'm really thankful to all of you.

I'll try to throw my newbie opinion about the next moves :

Today, and during the next days, all is great in Europe. Greece is finally, and once and for all, saved (/sarc). Euro rally, and thanks to WOPR PM will rally, PIG is going down.

But when you see COT figures, and lease rates, you know that it's not going to last. TPTB are far from stupid, and they have a plan. I think that some 'event' will occur, taking everyone by 'surprise'. A $ positive move, which will make oil go up, EUR (and thus pm) down. Maybe won't affect too much gold, which could explain the lease rates still high (compared to silver).

And if you had to that an increased military presence in Persian sea, and also the fact that Iran just got cut out of SWIFT, i guess that war is unfortunately a really likely even, which should produce the effect on markets said above.

I really hope I'm wrong, but that's just my two cents. Hope I'm just a conspiracy nut.

So to all the stackers here, if you plan to buy, don't forget to at least cost average, if not delay of a few weeks. We could see a big dip soon (triple bottom for silver ? 200dma for gold ?). And for those who like to play short term, fasten your seatbelts.

That's my newbie opinion, will be happy to have thoughts about it.

copied over from last thread

Submitted by Mariposa de Oro on February 21, 2012 - 1:15pm.

Fr. Bill Submitted by Mariposa de Oro on February 21, 2012 - 12:06pm.

The wild card at present is the current IRA laws and whether or not the government is going to so revamp those in its own favor that all the tax-sheltered dimensions of the current IRA law vanish.

You said it! When I consider the GM bondholders, MF Global clients and the way the Fraudclousure crimes were handled, I cannot convince myself to contribute to my IRA. Independent Living had some detailed coverage of the gub's confiscation plans in 2009. I quit contributing to my funds almost two years ago. I think that we'll hear more about those plans once The Hopey-Changey One is safely installed into his second term.

@Goldmania

Submitted by Irene on February 21, 2012 - 1:16pm.

I second that. Rickards and I had an email correspondence. He replied to me, a total stranger, in less than 5 minutes. Polite, professional and a really nice guy.

End of February predictions !

Submitted by Monedas on February 21, 2012 - 1:30pm.

We still have a contest or what ? Let me push your refresh button: Au $1999.99, Ag $49.99, Pt $2299.99, Cu $4.99 Monedas 2012 Condoms still only $ .99 !

Federal Government cannot...

Submitted by Patrancus on February 21, 2012 - 1:36pm.

Federal Government cannot be trusted with the management of anything, especially your life. Someone very close to me lost their life at the hands of the Federal Government's medical doctors, I am sorry that I remain bitter for this loss for over 30 years, just thinkin and typing.

Rickards

Submitted by Ferd Torgerson on February 21, 2012 - 1:46pm.

Has no mining shares or bullion to sell. He sells only his observations about the world as he sees it. I have come to trust his opinions as much as those of any other nationally-known commentator of his stature. When he discusses target prices for gold, he’s not basing it on wishful thinking. He’s responding to scenarios based on assumptions regarding central bank actions, government attitudes toward hard currencies, etc. “If this and this were to happen, given this set of circumstances, my estimate is that gold would be fairly priced at x dollars.”

I couldn’t wait to get his book and downloaded it to my Nook the first day it became available. A government shill? Nope. I doubt anyone expected him to perform in the manner he did at the war game scenario he participated in.

Just remember his comment in November 2010 when he said something to the effect that “there’s no way all of this sovereign debt can ever be repaid”. Fifteen months later we hear of re-structuring, haircuts, possible defaults, etc. But, unless I’m mistaken, the levels of sovereign debt have actually increased.

Ignore him if you wish. I choose to listen. Rickards and Ferguson are my "go to" guys for doses of reality.

@ Sturdy Fergusov - PSLV Premium

Submitted by SRV - ES339 on February 21, 2012 - 1:50pm.

No kidding... sold mine out mid morning (I agree with Turd about caution) and was fine with Ag adding 20 cents or so... then I check PSLV and the premium alone is up almost 2% in an hour! Just what I need, another short term input factor for Ag... like we don't have enough of them already... lol!

Great post today Turd... and you're right about the lease rates! IMHO the counter arguments focus on the actual technical factors... they're very real, but what they miss is how the EE takes advantage of technical weakness, pile on, and accelerate during "select" periods weakness... the classic EE raid!

Great buying opportunity

Submitted by lairdwd on February 21, 2012 - 2:09pm.

Looks like they are pushing it down into the crimex close. 1750 will hold. Anything in the 1750.xx area would be a great time to get long.

EDIT: As soon as I post, it breaks out to the upside. Silver was the tell. It was already moving higher while gold was drifting down at the 1751.xx area. Forgot that everything is backwards when the cartel is playing the long side. LOL

Log of Frustration on the Fire

Submitted by realitybiter on February 21, 2012 - 2:16pm.

Max Keiser had a nice piece recently and cited that 10 or the top wealthiest counties in America are within an hours drive of DC. nice.

How can any reasonable person think that the answer to America's financial issues is to give these people MORE money (increase taxes)? This debate about taxation versus shrinking government has this datapoint at its heart. How can a Country thrive when its most successful people are those who produce no product or service? Aren't they just parasites? Of course, we need a collective defense, but it has a limit.

Those that want government to shrink are not anti-govt anarchist (I can't speak for everyone, but likely some), they are just reasonable people. How can one claim to be a public servant when they are wealthier than their supposed superior (taxpayer)? This is a corrupted distortion. Either it gets righted by logic and intelligence or we go Greek.

If the US goes Greek, there will be no bailout. It will be a currency crisis and those top 10 counties in Virginia will go Detroit. As I said, they produce nothing. When the currency collapses, the tide will go out, and those places that were thriving simply due to their production of real product will likely recover quickly. Those that were thriving due to their manipulation of the system, while producing nothing, will drop to their intrinsic value.

Lets see....we had the dotcom boom and bust (they actually produced something that endured -internet)

then the fictitious real estate boom and bust..

and now the gubmint boom ..and...

note to banks making real estate loans to folks in those 10 counties - you are about 3 years away from massive foreclosure, with no path to restitution - I'm sure you'll figure out some creative way to screw everyone else when the new currency gets rolled out....

hi ho silver....the takedowns will become increasingly impotent.