By All Means, Sell Your PMs!

228
154
Thu, Jul 21, 2011 - 3:04pm

Word of a pending "deal" between The Regime and The House sent the metals reeling this morning. This once again proves that WOPR does not have actual, human intelligence...at least, not yet.

Of course the debt ceiling is going to be raised in a package with some phased-in spending cuts and tax increases. That was never in question. The only question has been whether there would be a "plan" such as this or whether O'bottom would simply raise the ceiling by executive order. It's quite clear now what will happen. As partially discussed back on Monday, here's how this will play out:

1) The House cast a vote last night on a "Tea Party" package. It passes overwhelmingly but has zero chance of passing the Senate or receiving O'bottom's signature. No matter. It's all about "political cover". More on that later in point #4.

2) A "plan" emerges, brokered by The Regime and the Republican "leadership". 50 or so "safe seat" Repubs will vote for the plan in the House. Those 40-50 votes plus all of the Dem votes will be enough to pass the plan. All of the Senate Dems plus one or two Repubs will approve the plan in the Senate and O'bottom will sign it.

3) Problem solved.

4) "Tea Party" Repubs are able to claim that they did their best. They'll be "on the record" as having voted against O'bottom but voting for their own plan. This is known as "having your cake and eating it, too". On balance, they will be safely re-elected next year and Boehner will keep his job as SOTH.

5) Every politician wins! You lose. Again.

So with that behind us, let's cut to the chase. The debt ceiling is going to be raised again by another $2T or so... (Don't forget about this chart!)

...And it will only take about a year and a half to hit the ceiling again. With the passage of this "deal", all that will have happened is a kicking of the can down the road until early 2013. Hmmm. Early 2013. Why would that be significant?? Let's see, what happens in late 2012? I know it's something but I can't put my finger on it. Let me get back to you on that.

At any rate, the question you need to ask yourself right now is: "From where will this $2T be coming?".

I know! China! (Nope.)

Russia? (Nope.)

Japan? (Sorry.)

The EU and ECB! That's it! The owe us a few favors! (Negative.)

We'll raid pension plans and IRAs! (Someday soon but not yet.)

QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3QE3!!!!!!!

So, by all means, today's news means you should sell your gold and sell your silver. NOT! I sincerely hope all of you are wise enough now to not continue falling for the manufactured SPIN and MOPE of Washington politics.

TF

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  228 Comments

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bullwhip29
Jul 22, 2011 - 9:07am

@ Coldwired

Re: Gold almost vertical

Same type of rally happened on Wednesday. The difference this time around was that the raid was less intense (on Thurs vs Tues) and buyers stepped in soon after the Comex closed yesterday. As I and others mentioned yesterday, it seems as though the EE is becoming more and more inept over time. Is this true or is this what they want us to think? Perhaps we can close well over $1600 today, which would keep us in the green for the week. Given all we've had to deal with, this would be very bullish. Obviously, the day is only beginning so this may not mean a whole lot. No sense getting ahead of ourselves. Think of these small surges upwards as additional protection (like layers of plywood reinforcement for your windows) from Hurricane Blythe. Will she be a category 1, 2, 3...????

Vypuero
Jul 22, 2011 - 9:06am

silver just broke $40 again

see if it can hold today...

kliguy38
Jul 22, 2011 - 9:05am

SPECIAL DAY

This has the makings of an extraordinary day in the PM pit.......

FriedEggs
Jul 22, 2011 - 9:01am

FrieDay

Happy FrieDay! Spark one up if you got one...

Fried(e)

debtless
Jul 22, 2011 - 9:00am

Debt ceiling reached...eventually.

Another idea would be to prepare for the [eventual] passage of the rise of the debt ceiling by preparing to daytrade SHORT/inverse etfs. Which would seemingly be a terrific opportunity for the EE to smack the heck out of the metals. Before investors come to their senses and realize what more debt really means. I got back in ZSL this morning on the dip - and awaiting 5% or more in the next day(s).

ewc58
Jul 22, 2011 - 8:55am

Wax on!

PMs are screaming higher... C'mon happy Friday!

Shill
Jul 22, 2011 - 8:55am

Lou

Surely there has to be a different way otherwise what future do my children have?

Yes I think the same way at times Lou. Again your doing all the right things, so only we as parents and adults can pave the path for our children's future. Educate them early and they will be better people going forward.

I wish you well my long distance friend.

illyasviel
Jul 22, 2011 - 8:53am

Silver looks overbought on

Silver looks overbought on the 30 min chart, well see what happens pretty soon :P

Coldwired
Jul 22, 2011 - 8:45am

Gold almost vertical

Blimey, what's put a rocket up gold? graph sharply up.. silver following. 45 mins away from US open so I'm guessing we're getting ready for a nice jump up. Didn't expect this today..

I gambled on monday and put more money in silver. oops, badly timed. $40.50 please!

duckwomanloulouShill
Jul 22, 2011 - 8:43am

Shill

I hear what you are saying totally. But I have two small children (5 & 3) and I wonder what the world be like for them if this continues as it is. I worry for them and their future. My husband and I are as prepared as we can be here (PM's, cash, dry stores, veg patch, frozen goods, campervan) everything but a gun (not comfortable with this & less common in the UK than the US). I saw the Cormack McCarthy film 'The Road' and although I do not see that scenario playing out unless there is some kind of radical change in the way the existing corrupt system works then I think our future as a human race is going to get progressively worse. The power and wealth already held by the top 10% of the richest in the world is moving up even further to the top 1% at the expense of everybody else. The have's and have not's is getting wider and more out of synch. Surely there has to be a different way otherwise what future do my children have?

Lou

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