After a particularly nasty global selloff this morning, everything from stocks to crude to the PMs are trying to bounce a bit this afternoon. I wouldn't get too excited, however.
We see this almost every day now...every down equity day, at least. Stocks decline and then, once the bad news flow ebbs a bit, stocks recover. This afternoon, it's not just stocks, it's almost everything. It's tempting to get a little optimistic. You might begin to feel that the storm has passed. Maybe it has. What do I know? I'm just saying...this has looked and felt really bad for about 3 or 4 days now and I feel like things are going to get a lot worse before they get any better.
On the bright side, we discussed this morning how buyers seemed to be emerging at $31 silver. Well, whaddayaknow...$31 continues to hold. In fact, the silver chart even has a little FUBM look to it. Again, caution must be observed here. Do not be surprised if $31 fails tomorrow or Wednesday. Stout and significant support does not look to be prevalent until we reach $30 and continue down toward $28.
Gold, on the other hand, looks terrible. Having decisively broken the trendline from the September lows, it looks almost certain to be headed even lower. I'd say 1650 is not far over the horizon and 1600 is likely. Sorry. I wish I had better news for you but I gotta call 'em like I see 'em.
There is absolutely no doubt in my mind that gold and silver are being deliberately jammed lower by the intervention of the U.S., Swiss and Japanese central banks, through their conduits, The Bullion Bank Cartel. Yes, some spec money is again flowing out of the pits as liquidity is raised worldwide. However, since September, central banks have played an active role in clipping over 10% from the price of gold, all during a time of extraordinary uncertainty and increasing fiat currency devaluation risk. Soon, the time will arrive when no more blood will be drawn from the stone...when all who can sell will have sold. This will be evident by CoT reports that show a stable spec position alongside an increasing commercial short position, all while price is dropping. Again, this day is coming but it's not here yet. Until then, stay cautious and bide your time.
Finally, late last week I promised "Dr Jerome" that I would publish on this main page a missive he included in the comments section of one of my posts. Nice work, Doc.
Before I go back to grading today...
Submitted by Dr Jerome on November 16, 2011 - 6:52am.
I have been ruminating ...
A close friend of mine was murdered last December 2. He was 70. Marched at gunpoint into his cellar and popped in the back of the head with a 22. All for a handful of silver coins. We know who the perp is! But the police have not made an arrest for a lack of evidence. They have a video of him selling the coins to a local dealer. No justice. and I have lost my trust in the police, in the whole system, and in the leadership ability of every politician I know of. And now, banks are ripping off people's trading accounts.
My employer will not allow Fidelity to release my 403b. I have to quit a good job to get the account. that is discouraging. My wife and I began investing real estate in 2006. today I am ready to walk away from 8 underwater properties as good renters are becoming scarce. I am disgusted and ready for a different life. I think I'll get what I want.
Given that Keynensian economics is is sinking and gasping for air, those who wish to defend it now have the burden of proof. Good luck with that. Yet our leaders still embrace it (publicly) and sing its praises to the citizens. But why did I swallow their Keynesian system, hook, line, and sinker, for most of my life? Why did I not start buying PMs years ago as many of you did?
At Harvard University in the mid 1700s, a student was expected to know Latin and Greek upon entry and develop a thorough mastery of logic and argumentation--what we call "critical thinking" today. Theology was a mainstay of education, providing a foundation of ethics. That means every educated person of the day could read legalese, argue effectively, and at least knew right from wrong. After the American civil war education began to change. Industry needed engineers and financiers. The casualties of education were Latin, rhetoric, and theology, as math, the hard sciences, and the social sciences elbowed their way into the curriculum. I don't need to mention what happened to philosophy as Neitchze pushed aside Plato, Benthem, and others. Don't even get me started on Derrida!
Another subject we absolutely do not teach in our school systems is money! People graduate from college with no grasp on credit, compounded interest, and certainly no ability to understand your typical zerohedge article. I wonder how many of you with degrees in economics did not really learn how money works until after you took a job in the financial industry or became a PM bug?
So our educational system turns out sheeple who lack the skills to evaluate arguments and evidence, who are unable to recognize sophism, and have no clue of how money works. Can you imagine a more docile population for the Banksters to fleece?
But the lack of an education in basic thinking skills puts one at a far greater risk than just losing your money to bankers and used car salesmen. You are unable to comprehend and judge the rhetoric of political wannabees at election time. Political rhetoric has degenerated into the shouting of slogans, presidential branding, and attack ads. Where is the honest debate of issues? I thought that was what the new mass media of radio and TV would bring us... Oh, I forgot, you have to have a ton of money to use those...hmmm, who has that kind of money? Only now are the changes wrought by the internet being felt. Look out, EE.
I ran for student council in the 6th grade. IN the polls we were neck and neck. I lost, but I learned a valuabe lesson. "Promise those who vote for me a bowl of ice cream at my house after school!" That is what my opponent did (his name was Clinton, really), and he won. My best friend even voted for him. And he never got his promised ice cream (true story). Aha, Plato was right! In democracy, politicians pander to the voters and get elected. Then they can legislate whatever they want, such as insider trading. And at election time, here come the promises of ice cream again. Why don't people see thorugh it? Oh yeah, they are not really educated. But I didn't need to tell you that.
But I will tell you this: At my large midwest, Big 10 university, where we do NOT teach you to read legal documents, how to argue, or what's right and wrong, we DO promote diversity. Diversity is everywhere! There is a diversity statement appended to almost every document we write--sometimes very awkwardly. So why do we promote this so religiously? It wouldn't have anything to do with a one world government, would it? (couldnt resist). If I were a conspiracy theorist, I would see one grand scheme to shape the minds of people to discount radicals like Turd and embrace a new world.
But silver could bring it all crashing down.
The financial world is precariously hanging by a Keynsian thread hoping for ... something... To to hold it together, to keep inflation in check, the EE manipulates the price of oil, gold, food--every commodity can be controlled by a heavy hitter in the futures market. But there is enough gold, oil and corn to deliver that there really is no risk of the store not being able to deliver the goods. As many people who want it can have it.
Except for silver!
The CME has a measly 32 million ounces of silver on the shelves. 6000 contracts! If the sellers cannot deliver, the CME will be shown to be a fraud--a store that takes your money but cannot deliver. Trust will be broken. The buyers will leave. How would the EE control the price of the big items then?
Nobody could defeat the mighty Achllies. He was invincible. No weaknesses. Divine protection. Dipped in the river Styx to make him unassailable, except for his heel, by which his mother held him as she dipped. A goddes told the wimpy Paris of his weakness, and a lucky shot with his bow, guided by the goddess, felled the hero.
Max Kieser was right! Silver is the cartel's "Achilles heel." If we all keep stacking bars, rounds, eagles, junk & jewelry, eventually the silver will all be hoarded away in holes, closets, safes, and lost in canoeing accidents (alas). And the CME may be exposed.
A default by Italy or France could freeze global liquidity much sooner. If Greece brought down MF Global, perhaps Italy or France can bring down the rest. And if their liquidity dries up, they may not have the fiat available to keep selling the paper silver in the CME. One can always hope. December may be very interesting. I'll be reading Harvey Organ's play by play every night. And I am going to buy some more silver.
Silver! Not an investment... a revolution!
OK, that's all for now. Keep an eye on things overnight. The craziness will continue. TF