Bernanke's Victory

He's done it! I would imagine he feels pretty good about himself today, too. He's likely receiving congratulatory calls from his banker friends around the globe. Gift baskets from Dimon and Blankfein arrived earlier this morning, too. The stock market is back to alltime highs! I can hear the popping of champagne corks all the way out here in flyover country.

So what does all this mean? I mean really, what does it mean? U.S. stocks are back to 2007 levels yet millions are unemployed, food stamp usage is double what it was then and the cumulative U.S. debt has been doubled, too. What are we to make of this?

Well, let's try to keep things in perspective. First of all, even if you use the crappy, government-issued CPI, stocks are still 20% below their alltime highs when adjusted for inflation. Sure, your 401(k) balance may be back to where it was six years ago but the value of your dollars and your purchasing power certainly aren't. And again, what about all of those folks who own very few, if any, stocks? (http://www.gallup.com/poll/147206/stock-market-investments-lowest-1999.aspx) How's the "wealth effect" working out for them?

Regardless, let's focus on this wonderful market of stocks and relate it back to the precious metals, which is what primarily concerns us today. First of all, though CNBS is all aflutter with the new stock market highs, maybe someone should show them this chart. Hmmmm. Looks like gold is still a better investment over the past five years, even with the ongoing manipulation.

And what about that manipulation/suppression? Well, here are two fun charts for you. (Perhaps you should print them off and hold them up the light?) Note how both gold and stocks were trending steadily higher for the first two years of QE. From March of 2009 until summer of 2011, the S&P rallied from 700 to 1300 and gold rose from $900 to $1600...almost the same percentage. But then what happened? Well, the proverbial sht hit the fan. The U.S. hit the "debt ceiling". Washington politicians showed themselves to be completely worthless in slowing the expanding debt. The Standard&Poor's credit rating of the U.S was lowered. At the same time, the only remaining fiat currency that showed any life at all was the Swiss Franc. Because this currency strength was deemed to be detrimental to the Swiss economy, the SNB decided to peg the Swissie to the euro. This sudden move left gold as the only remaining safe haven currency.

Look what has happened since. U.S. stocks are UP almost 40% while gold is DOWN nearly 20%.

This, folks, is central planning and market manipulation at its finest worst. Global central banks print a nearly-unlimited amount of fiat money and this money flows into stocks and other paper assets while at the same time, the Bullion Banks (of which several are Primary Dealers for The Fed) actively depress the prices of gold and silver in order to spur confidence in the current system. The HOPE is that this MOPE will generate a belief that all is well and that recovery is nigh...that all is well and everything is back to normal. The problem is...as we all know...all is not well and there is no returning to "normal".

But The Fed and their minions can certainly try. Take a look at this chart of the S&P:

OOPS! That's a chart from last year...last February to be precise. Upon further review, you can sure see why I was so confused. Take a look at the current chart:

Nah!! I'm sure that having these two charts be nearly identical is just happenstance and coincidence. Of course it is! The odds of nearly identical performance at nearly the exact same time of the year, two years in a row, are only...astronomical. And then consider this further coincidence...Shirley, there's nothing to see here: QE∞ gets announced in September and confirmed in December. All the while, stocks rally and gold dives.

So, anyway, what's the point of all this? I guess it's just to remind you that it's all an illusion. Back in October, I wrote this post and perhaps it's time to read it again. (http://www.tfmetalsreport.com/blog/4246/corner-copperfield-and-blaine) To save time, here's a c&p of the final paragraph:

"So remain patient and buy the dip. Keep stacking and continue preparing. Though any quality magician can temporarily suspend your belief in reality, in the end it's all just an illusion. The laws of physics eventually trump the magicians skills just as the laws of economics will, one day soon, blunt the accumulated efforts of The Fed, the banks and their willing accomplices in government and the media."

The magicians have now suspended reality with this current trick for nearly six months. I suppose that they can continue this illusion even longer...but not indefinitely. This will end eventually and reality will, finally, return. Of that you can be certain. In the meantime, try not to be discouraged. You have done well to prepare yourself for the inevitable. Believe in what you know and act accordingly.

TF

356 Comments

Turd Ferguson's picture

Today's price action

MODERATOR

Don't get too worked up over today's price action. It is simply HFT stop-running and Cartel CoT-painting on full display. Check out this chart from earlier today. Note the six, different surges forward that were all beaten back. HFTs (whether spec or Cartel) run the buy-stops and sell their own shorts into them. Price dips back lower, you wait a few minutes and run the same trick again. Over and over as long as it's profitable.

And then, when that stops working because you've exhausted all of the buy-stops, you run the trick the other way and harvest some of the sell-stops below $1580.

Expect more of the same into the close and then, hopefully, a positive Globex session where longs are put back on post-survey.

Double Bogey's picture

Shazzam!

I can now cross off being first from my bucket list.

They say a broken clock is right twice a day. The stock market will have its day again.  But so will the metals.

ag1969's picture

2nd Ammendment

A well regulated militia being necessary to the security of a free state, the right of the people to keep and bear arms shall not be infringed.

Big L's picture

Thurd? No, it's Fourth for me....

Right after two dots, and a comment. This position stuff is getting pretty competitive isn't it?

Turd Ferguson's picture

New from ZH

MODERATOR

Apparently Morgan Stanley see it much the same way:

http://www.zerohedge.com/news/2013-03-05/gold-and-next-great-monetary-easing

erewenguy's picture

IN!

IN!

Edit- Now that I'm in, I placed  my bets that today is the "top" in SPY, and bottom in gold and bonds. Let's ride.

Big L's picture

Interesting charts

on that link Turd.

Big L's picture

It's really hard to imagine

how this manipulation could have gone on this long. It doesn't seem like it could go on much longer.

Having said that, if there is no concern about the consequences what-so-ever by the people responsible for this deplorable state, I suppose it can go on for quite a bit longer.

How terribly discouraging. But not surprising.

sengfarmer's picture

top 10

Yes.

Road_Scholar's picture

It's all rigged, and a distraction

to keep the sheeple's eyes off the grand con.  Weeeee, look at the Dow go up.  I guess everything is good?!  Marge, let's put our money in too...

If you can't figure out who's being conned then you're the mark.

chickenshellgame.jpg

Mammoth's picture

The Theme Drones On...

MLK said, “I Have a Dream…”
Obama says, “I have a Drone…
- – – – – – – -
FAA investigating report of drone spotted near NYC March 05, 2013 14:51 GMT

NEW YORK (AP) — The FBI and the Federal Aviation Administration are investigating a pilot’s report that he spotted a small unmanned aircraft at John F. Kennedy International Airport.

The Alitalia pilot told air traffic controllers that he saw the aircraft as he approached the runway at Kennedy at 1:15 p.m. Monday. The pilot said the aircraft was 4 to 5 miles southeast of the airport and was flying at an altitude of about 1,500 feet.

An FBI spokesman says the pilot reported that the aircraft was about 1 meter long.

The pilot can be heard on radio calls captured by LiveATC.net, a website that posts air traffic communications. The pilot said, “We saw a drone, a drone aircraft.”

The FAA says the pilot did not take evasive action and the plane landed safely.
- – – – – – – – -
Aside from the implications of the .gov spying on Americans, and possibly targeting them with missles or other nasssty intentions – if they fly these Drones in the vicinity of airports, the odds are that sooner or later there will be a horrific mid-air collision between a passenger jet and a Drone.

(But at least that Drone will have kept us safe from terrorists before its untimely demise.)

Sandiaman's picture

Next Mission

Now they will have a major distraction.War? False Flag?Assassination?

ctob's picture

Its a building with sick people in it ...

and don't call me Shirley.

NonoverlappingMagicCereal's picture

Similarity of last two februaries...

Is TF suggesting that not only can the fed manipulate the value of the stock index with 500 components, but can tune it to a precise slope with similar peaks and valleys? 

(A) How?

(B) What ever on earth for?

His estimate that the odds of the similarity being 'astronomical' is, to put it kindly, lacking in mathematical rigor.  Really grasping at straws here...

Road_Scholar's picture

@ Turd

There is 'nothing to see here', but stop calling me "Shirley"...airplane-movie-image-leslie-nielsen-01.j

Himalaya's picture

The Last Time The Dow Was Here...

"Mission Accomplished" - With CNBC now lost for countdown-able targets (though 20,000 is so close), we leave it to none other than Jim Cramer, quoting Stanley Druckenmiller, to sum up where we stand (oh and the following list of remarkable then-and-now macro, micro, and market variables), namely that "we all know it's going to end badly, but in the meantime we can make some money" - ZH translation: "just make sure to sell ahead of everyone else."

  • Dow Jones Industrial Average: Then 14164.5; Now 14164.5
  • Regular Gas Price: Then $2.75; Now $3.73
  • GDP Growth: Then +2.5%; Now +1.6%
  • Americans Unemployed (in Labor Force): Then 6.7 million; Now 13.2 million
  • Americans On Food Stamps: Then 26.9 million; Now 47.69 million
  • Size of Fed's Balance Sheet: Then $0.89 trillion; Now $3.01 trillion
  • US Debt as a Percentage of GDP: Then ~38%; Now 74.2%
  • US Deficit (LTM): Then $97 billion; Now $975.6 billion
  • Total US Debt Oustanding: Then $9.008 trillion; Now $16.43 trillion
  • US Household Debt: Then $13.5 trillion; Now 12.87 trillion
  • Labor Force Particpation Rate: Then 65.8%; Now 63.6%
  • Consumer Confidence: Then 99.5; Now 69.6
  • S&P Rating of the US: Then AAA; Now AA+
  • VIX: Then 17.5%; Now 14%
  • 10 Year Treasury Yield: Then 4.64%; Now 1.89%
  • EURUSD: Then 1.4145; Now 1.3050
  • Gold: Then $748; Now $1583
  • NYSE Average LTM Volume (per day): Then 1.3 billion shares; Now 545 million shares

http://www.zerohedge.com/news/2013-03-05/last-time-dow-was-here

Dr G's picture

Nice charts, Turd. But that's

Nice charts, Turd. But that's nothing. One of my holdings is up 247% this year alone :) That profit buys a lot of silver, gold, ammo and food.

SteveW's picture

Seems to me that the MO has changed

and the smash is now at 7 am EST coincident or just after the afternoon London gold fixing.

Coincident? There are no coincidences.

sideshow03's picture

CoT Lie?

As we have seen, the managed money funds are the majority shorts in the market recently and the bullion banks covered a good amount of positions.  Some have been saying that it’s a sign that higher price could be coming.  While that is true it also gives the bullion bank the chance now to RESHORT the market and go after the ultimate goal --- breaking that 1520 support area.  If they do that then the stops that get tripped there will be big and the market will most likely capitulate. It would not surprise me if the BULLION banks have a break of 1520 as their GOAL here and this is their best chance they’ve ever had. 

-GoldTrends.net

dropout's picture

Hot Air & Fundamentals

Hot air rises until it cools then falls.

That is a law of nature. The stock markets are full of just that - HOT AIR!

Central banks manufactured hot air in the form of freshly printed (digits) liquidity.

It will cool as confidence in this ponzi game wanes. Then crash.

Looking at non-manipulated, real time data, from the HARPEX, BDI, AAR, and other global shipping indices, the news is not good. With the exception of some small improvement in some of the lessor indices, the overall trend is down. Global trade is falling off what small increase that was apparent six months ago and has been increasing its rate of decline since.

These are leading economic indicators that are insulated from governmental interference and report each day in real time. How is there a recovery without a correspondingly increase in global trade? There simply isn't! What we do have a massive increase in is, central bank liquidity. Hot air.

There are no markets any longer, just manipulated, controlled, fraudulent shadows of their former selves. A big casino where the house (central banks) always win.  

sandy beach dave's picture

Hot air and fundementals

Measuring the Dow in dollars is measuring with an elastic yard stick. It has no relationship with reality. 

LOUP-GAROU's picture

I love it when

the sheep panic, just bought 100 0z  2010 sae's @ $28.00 @ oz, keep it up weak sheep! gift from the silver gods!  thanks for the update turd!

buzlightening's picture

Remember

It's all black magic illusion.  Gold & silver still keep pace with purchasing power for goods and services.  Can't kill the worlds real reserve currency gold.  As noted on urban survival, as the black magic illusionists gov goon platoon twinks all things in the govs favor, cola on Soc Sec=CPI mark to fantasy, we get a real number of 16,012 DOW for real new high after 5 years and a watered down USDinker dollar in buying power.  The blatant bankstering and accelerated drain on wealth the passed half decade show history repeating.  Buying power eroding as the USDinker is 82.  bankstering can float this as long as the rat bastards want, while all around some phony bench mark USDinker maintained in OZ's back room,  reality screams you're paying more in food and energy; USDinker dollar death dance. Stay awake and don't get lulled to sleep.  Your gift has been the thing didn't collapse and you've had 5 years to pack your economic life boat for disaster, while you hope the mope doesn't fail.  It does; it will.     An iceberg is vaporized hurling to the suns white hot center, as truths flashing bright light of lasting illumination sends all the blackest, darkest lies; those loving them and making them, to the far reaches of the infernal of dante's bottomless pit; the heights & depths of such misery reserved only for the partakers there of.  I pity the fools!

The Watchman's picture

True

bernanke+dicking.jpg

dropout's picture

Hot Air

Governments around the globe continue to manipulate statistics in an effort to paint a picture of recovery and a return to normalcy. Despite their best efforts to fabricate positive employment numbers, GDP growth, currency stability and stock market health, the stark reality is that the global economy is at a standstill, and has been since July 01, 2008.

mrneutron's picture

Time to turn to Nostradamus and see what he had to say.

C8:Q28

Les simulacres d'or & argent enflez,
Qu'apres le rapt au lac furent gettez
Au desouvert estaincts tous & troublez.
Au marbre script prescript intergetez.

The copies of gold and silver inflated,
which after the theft were thrown into the lake,
at the discovery that all is exhausted and dissipated
by the debt.
All scrips and bonds will be wiped out.

Byzantium's picture

Stock market highs

I think that this is more than just about a feel good factor & MOPE news headlines.

We suspect that $35 and $1800 are vital lines of resistance for the cartel, beyond which they may lose control. Likewise, if the massive pensions industry loses its credibility, the implications could be profound for Wall St plc; the retail suckers will stop giving free money to the banks and fund managers, and will instead adjust their current spending accordingly in light of a new appraisal as to their actual future income. Disillusioned savers may even seek refuge in gold and silver.

Pensions have to get a return from somewhere. They ain't getting it from government bonds (except the risky ones, and there be other dragons). A stock market crash this time round will be a seismic event, and not at all like past crashes. Combined with low bond yields, once savers get to see the impact on their annual statements, it might have a snowballing effect on where the public channels its money.

JohnnyR's picture

Turd paraphrased Churchill the other day

May I do the same. This one may be pertinent on a day like today.

October, 1941.

"Never give in, never give in, never, never, never, never-in nothing, great or small, large or petty - never give in, except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy."

MrGuboci's picture

YAY

We are currently in a win win situation for paper traders . If you go long paper here @ 28.5 and it goes up you win , if it breaches the 28.4 level you turn longs to short position and you win on the way down. How cool is that ??

thesandbox's picture

YAY

..."and the minstrels rejoiced".... My great buy on sub $2 GPL is almost at $1!!! Only got 3 weeks left till my 401K distribution deadline and I am forced to give my shares back at these ridiculous prices....oh well it was company money right? Anyway, bought a roll of Bisons from Provident and a roll of ASE's at my LCS to make me feel better....and yes, celebrate Ben's victory....to Ben.

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