We Are SO Screwed

276
Thu, Apr 19, 2012 - 10:23am

Before we get into the usual metals discussion today, I thought I'd take a moment to discuss what is being called "Taxmageddon". Not for the fiscal or economic policy ramifications but as a perfect example of just how hopelessly broken the political system in the United States has become.

If you haven't heard of Taxmageddon, don't feel badly. It was a topic that ramped up in popularity into Tax Day back on Tuesday but now will surely drift back into obscurity in the weeks and months ahead. What Taxmageddon essentially is is this: Without Congressional action, almost all tax cuts and changes initiated within the past 10 years will expire on January 1, 2013. This includes changes to the Alternative Minimum Tax, the "marriage penalty", rates paid on dividends and interest, the "payroll tax deduction" and so on and so on. For a more detailed summary, here are links to a New York Times story and a Fox News story on the subject:

https://www.nytimes.com/2012/04/15/sunday-review/coming-soon-taxmageddon.html?pagewanted=all

https://www.foxnews.com/politics/2012/04/17/taxmageddon-coming-answer-could-cost-americans-500-billion/

I bring up all of this NOT for a discussion about tax policy and "fairness". That's all bullshit and, frankly, anyone that falls into the trap of arguing about this stuff is simply playing into the politicians hands. What I want you to take away is this:

Congress knows that this is a MAJOR PROBLEM. Coming up with a plan and fixing this should be THEIR PRIMARY OBJECTIVE over the summer. BUT THEY WON'T DO IT.

Instead, everything out of Washington will be simple theater ahead of the November elections. The Republicans don't want to be seen as raising taxes ahead of the election and the Democrats don't want to be seen as lowering taxes. None of these freaking politicians will DO THEIR JOB because they are more concerned about KEEPING THEIR JOBS.

So, what will happen? After the election, Congress will be called in for a "lame duck" session in December. It's called that because, typically, nothing substantial gets done, primarily because a significant portion of the reps have just been voted out. This lame duck session, however, will be charged with fixing all of the Taxmageddon problems, in about 3 weeks, again using the votes of representatives and senators who have just been removed from office but whose terms don't expire until January. Ain't that great???!!! This also means that, for the rest of 2012, no individual and no corporation can make any concrete plans (including hiring) because of the utter uncertainty regarding the tax code for 2013. And these political deltabravos can't seem to figure out why the economy isn't "recovering"!

Do you see now why we are so helplessly screwed? It's all about politics and control. None of the Republocrats gives a rat's behind about you or me or anything. All they care about is getting re-elected. Period. And if there are any of you out there naive enough to believe that if we can just get O'Bomney (re)elected all will be well, I suggest you get up from your computer right now and go stick your head back into your kid's sandbox.

Next, I suggest you read this. I don't agree entirely with the author's opinions but I certainly share some of them: https://www.zerohedge.com/news/guest-post-fake-conservatives-dangerous-freedom-obama

Anyway, I don't mean to sound hopeless and defeated but it's always a fine line between realism and cynicism. As we plod forward, we all simply need to stay on the side of realism. Pay attention, think for yourself and trust your instincts. The current system is not fixable and the status quo will not be maintained. If you think you can affect change on a grand scale, please give it a try. We are counting on you and hoping you will be successful. However, in the interim, the only sensible option for everyone else is to continue to prepare accordingly for the end of the Great Keynesian Experiment and/or the end of the Great American Experiment, whichever comes first.

The metals are rebounding this morning after being savagely beaten during London trading. On the bright side, chart support continues to hold on the Comex. Gold is still stout above $1630 and silver keeps catching a bid every time it moves toward $31.30. I don't know about you but I'll take it! Of course we still run the risk of a brief, gun-the-stops drop but, as long as we continue to set a base here, the chances are increasing that bottoms are in and the next UP move will soon commence.

Following on with the technicals are the fundos. Below is a C&P of a comment I tucked into the last post regarding the latest OI numbers and the coming CoT. I thought I should reprint it here so that you were sure to see it.

This week's CoT is going to be extremely interesting!
For the reporting week, here's what we have:
GOLD down about $10 and total OI down about 5,400 contracts. Almost certain to show a bullish improvement.
SILVER down 15 cents and total OI was UP by 7,000 contracts. May show a significant improvement.
​So, anyway, you know that I think the stage is set for a massive silver short squeeze. The silver CoT on Friday should only add fuel to the fire. We'll see...
Lastly, tonight's OI numbers are also amazing. Again, this data is basis yesterday's Comex close:
Gold total OI fell about 2300 contracts yesterday to 398,526 while price rose a scant $1.60. Not only is this a new low for 2012, it's a new low for the last 2.5 years.
Silver OI rose yesterday by 3,200 contracts (while price rose just 30 cents). At 121,448, total OI is, by far, the highest it's been for all of 2012.
Something very unusual is taking place here. Very unusual. We'll look back, 6-8 weeks from now, and be able to say that "the clues were there, why didn't we see it coming?".

Here's one bit of commentary for you today from JS Kim. It seems the brutal, 6,000+ contract dump on Tuesday caught his attention, as well: https://www.zerohedge.com/contributed/2012-16-19/weekly-dose-gold-silver-market-manipulation

Lastly, just an additional THANK YOU to all who Fed The Turd over the past 24 hours. We have now successfully raised enough funds to pay any outstanding bills as well as make the adjustments necessary to hopefully stop the site from crashing so often. Your generosity continues to amaze me and I am truly humbled by the outpouring of support. It is my sincere hope that I can continue to provide insight that you deem worthy of your attention and interest.

TF

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