The Israel Deception

Is the return of Israel in the 20th century truly a work of God, or is it a result of a cosmic chess move to deceive the elect by the adversary?

Saturday, January 7, 2012

As the Euro turns

Not more than a month after the US Federal Reserve tried to backdoor bailout Europe and the Euro by lowering the dollar swap-rates, the western currency has fallen well below its level at the time of the Fed intervention, and is falling towards the dangerous levels of 125.

Because of this inevitable fall, short action in the markets on the Euro is at an all-time, thus increasing the pressure on the Euro Zone, and the central bank's ability to purchase dollars.

The trend of relentless shorting of the Euro currency in the form of non-commercial spec contracts, and as reported by the Commitment of Traders, continues for one more week. As of January 3, EUR shorts rose by another 9%, hitting an unprecedented 138,909 net contracts short - a fresh all time record. What is curious that unlike previously, when an increase in EUR bearishness implicitly meant a increase in USD bullishness, this time that is no longer the case as net spec USD contracts actually declined, and are trading at relatively subdued levels. - Zerohedge

With this increased pressure on the downside, the markets are almost forcing the ECB and the Fed to intervene... and intervene soon.  These same short traders may very quickly reverse course if an whiff of QE3 comes to the forefront.

Silver now in backwardation as paper and physical prices much different

Wall Street always wants people to focus on the paper products they sell, and in doing so, try to establish false prices for commodities such as gold and silver.

Fortunately, those who own physical metals are usually not fooled when the paper prices fall, or rise based on rumors and manipulation.  This can be expressed in no better terms than backwardation.

Take for example Eric Sprotts PSLV etf which is truly backed 100% with physical silver.  Even as the futures price at the CME and NY markets have fallen some 30%, the premium for the actual physical silver has JUMPED 30% to equate the actual price value vs the paper price. can either try to procure gold and silver at a retail merchant, or one can look to the premium of a dedicated physical ETF over spot. Such as Eric Sprott's PSLV which as of today is trading at an all time high premium of 30%! In other words, someone is willing to pay up to 30% over spot for the right to be closer to the physical metal than merely have a paper claim on a paper claim (pre hyper rehypothecation and what not). - Zerohedge

Courtesy of Zerohedge

So always check and double check the claims of price falls on silver and gold, especially if you hold the physical metal.  Supply and demand rule the actual price much more than bank determination to prop up the fiat dollar, and keep the people in the dark on the metals true value

Friday, January 6, 2012

Debt Ceiling countdown begins with $25 billion left until the end

Its January 2012, and do you know where your governments fiscal responsibility is?  For the US government, it is business as usual as the Super Congress failed to reach spending cuts as promised when the House voted to raise the debt ceiling, and now, the government is down to just $25 billion left to borrow before we start the battle in Congress once again to raise it.

Courtesy of Zerohedge

Ann Barnhardt reports the Fiancial System is ready to topple

Commodities broker Ann Barnhardt spoke recently with investment strategist Jim Puplava on the state of the financial system in the after-effects of MF Global.  Ann intoned that the entire system is teetering on the brink, and is a house of cards ready to topple.

You can listen to the entire interview by going to Financial Sense.

Gold has bottomed and cleaned out its liabilities from the MF Global scandal

Gold has been steadily climbing since the beginning of 2012, and many of the reasons behind its 20% retraction have finally been flushed out of the markets.  The effects on the futures and gold markets after the MF Global scandal, coupled with the rise in the dollar compared to other world currencies, were the main antagonists forcing gold liquidations across the globe.

In spite of some short-term fixes, there remains no real resolution to the sovereign debt issues in many European countries. We're certainly not spending less money in the US, and now we're bailing out Europe via currency swaps with the European Central Bank. Shouldn't gold be rising?
Yes, but nothing happens in a vacuum. There are some simple explanations as to why gold remains in a funk.
  1. The MF Global bankruptcy, the seventh-largest in US history, forced a high degree of liquidation of commodities futures contracts, including gold. Many institutional investors had to sell whether they wanted to or not. This is similar to why big declines in the stock market can force funds and other large investors to sell some gold to raise cash for margin calls or meet redemption requests.
  2. The dollar has been rising. Money fleeing the Eurozone has to go somewhere, and some of it is heading into US bonds, which means first converting the foreign currency into dollars.
  3. It's tax-loss selling season, something that's also impacting gold stocks. Funds and individual investors are selling underwater positions for tax purposes. Funds also sell their big winners to lock in gains for the year and dress up quarterly reports.
These forces have all acted to depress the gold price.  - Jeff Clark of Casey Research

Courtesy of Casey Research

Now that most of these market forces have receded, gold is slowly moving back up towards $1700.  Additionally, the more Europe and the US continue in crisis, the more the chances of central bank easing become assured.  Once that happens, then the upper reaches of QE3 will move the price of gold to new records, make fools of many analysts who jumped at the chance to claim the gold bull market as over.

Phil Donahue stands with Ron Paul on Iran and foreign intervention

Old standby Phil Donahue spoke as a guest on the January 5th Piers Morgan show on CNN discussing the GOP candidates, and their stances on Iran and foreign intervention.  As they moved past frontrunner Rick Santorum, Donahue raved about Ron Paul and said he was the ONLY CANDIDATE who was speaking about America's warmongering ways, and the only one seeking a change to the status quo.

We are so like 1976 and the end of Vietnam... and the American people are tired of the US being the policeman to the world, the effects of bankrupting the country by our military interventions, and the blowback that comes from propping up dictators against the will of a nations people.

Thursday, January 5, 2012

The best laid plans of California and eco-nuts

California is still sitting on massive budget deficits, and with a falling muni bond market still hovering over the landscape, now is not the best time to spend cash on a massive boondoggle.  But California has never been known for sound thinking, especially in the fiscal arena, and the power of the eco-nuts to push through a high speed train project is another microcosm of the California fiscal nightmare.

They offered voters a plan and a website with renderings of cool-looking trains. It would connect LA and the Bay Area with extensions to San Diego and Sacramento. The initial stage would be funded with California general obligation bonds and federal dollars. The vast majority would be funded later in some unknown manner. Cost would be $35.7 billion. Voters approved it by referendum (Proposition 1A). That was November 2008.

By November 2011, cost estimates had ballooned to $98.5 billion. Voters realized they’d been had and became restless. The California High-Speed Rail Authority (CHSRA) made a formal request for $2.7 billion—the first tranche of the $9.95 billion in Prop 1A bonds. The federal government would chip in $3.5 billion. It would fund a 130-mile segment of civil works and track between Bakersfield and Fresno in the Central Valley. However, it would lack electrification as well as high-speed train control and communication systems. So it can’t be used as testing ground for high-speed trains. At the most, it might be used by regular diesel trains. -

Progess and attempting to move away from fossil fuels is one thing, but not when you are nearly bankrupt and losing both jobs and industry at alarming rates.  This isn't the 1930's, when WPA projects can be built in a cost efficient manner, but instead it is a time of growing inflation, and progressivism that doesn't realize the money they are spending is limited, and that when people can't find work, they can't be taxed.

Investment banks trading amongst themselves as retail pulls out more money from markets

2011 ended with retail investors pulling out more than $140 billion from the markets, leaving volumes low, and most trading occurring between investment banks.

The Santa rally into the year end was taken good advantage of by retail America. As ICI reports, in the week ending December 28, investors pulled another $3.988 billion out of domestic equity mutual funds (and $1.2 billion out of foreign equtiy funds). This represents the 19th consecutive outflow since a tiny inflow in mid-August, which if excluded would mean 36 consecutive weeks of outflows beginning in late April, or roughly the time when the market peaked. Altogether a whopping $140 billion has been redeemed from domestic equity-focused mutual funds, which compares to "only" $98 billion in 2010. - Zerohedge

While the markets have a long way to go to divest the more than $14 trillion in mutual funds and IRA's, many people who chose the stock markets as their retirement avenue are reading the writings on the wall, and figure its better to be first, than to be someone trying to catch a falling knife.

Euro falls below 128 as Italian econic crisis grows

The Euro has dropped more than 2 points over the past two days, to fall to a nominal low of 127.90 as new out of Italy led to the halt of Unicredit in overnight trading.

Following the 4th unhalt of UniCredit, its stock is now down 15% on the day as it scrambles to catch up to the fair value represented yesterday courtesy of the rights offering to be about 43% below the market price. As a result while the robotic decoupling in the US continues, as somehow America is supposed to be able to import and export from and to itself and completely ignore that it has about $3 trillion in European bank exposure, the EURUSD has just dipped to below 1.28 for the first time in over a year. - Zerohedge

In tandem, the dollar has risen more than .78 points to rise towards the 81 barrier on the index, and create a stronger scenario for the Fed to start warming up the printing presses.  US exposure to Euro banks assures that the US central bank will have little choice but to intervene at some time in the future to protect its own banking interests.

Wednesday, January 4, 2012

Pullbacks appear done as gold begins moves back up in 2012

With two straight days of positive moves, gold appears to have reached the end of its pullback from the $1700's, and may be headed towards stronger highs.  2012 gold prices have been predicted by several banks this year, with estimates ranging from $1830 to over $2000 an ounce.

See bank estimates for gold in 2012.

Wondering why gold has moved by over $20 in the last few minues? Wonder no more - according to a note just released by Citi analyst Tom Fitzpatrick, the gold correction "has run its course and a rally is now back on the cards." Granted it is not all smooth sailing - "Gold may drop to $1,550 before turning", but when the turn comes, Fitzpatrick sees it as going all the way up to $2,400. He has the following technical observations: "Only a weekly close below $1,535/oz means corrections may be deeper." - Zerohedge

Chart courtesy of Citi