German suffered a "disastrous" bond sale today, puffing up fears that the go-wheel of the European Economy might itself be threatened by the debt crisis. The German debt agency couldn't sell almost half of a 6 billion euro bond sale -- no bids. That pushed Germany's cost of over-ten-year borrowing above the US for the first time since October. (paraphrased from a Reuters report.) It gets worse. Belgian government's deal with France to bail out the bank Dexia for $120 billion is unravelling. Fitch Ratings reported that France was bumping up on limits that threaten its AAA credit rating. The Germans won't budge toward taking on the debts of all Europe, and the banks won't write off the debt, & the junior Euro countries can't stop spending without facing revolutions. No statesman appears to cut this Gordian knot, so they keep on dithering at loggerheads, the most surely fatal response in a crisis. To all this fun the euro responded by gapping down 1.38% to 1.3325. It's nearing the last low at 131.64. When it breaks that, well, imagine one of those gigantic slides at a fun park that somebody has rubbed down with lard, & you'll get a hint of how fast the euro will drop. The yen dropped 0.53% to 129.22c/Y100 (Y77.39/$1). One must suspect that the yen had official help doing that. US dollar index punched through 78.50 resistance & rose 82.2 basis points (1.06%), surmounting the round number 79 to trade at 79.09. Last high (October) reached 79.84, & that's the last resistance standing in the dollar's road. A close above that sets it flying. Of course, Bumbling Ben may decide to intervene before that happens. Funny, although nobody admits it, currency markets are playing out just like they did under the competitive devaluations during the 1930s, and, I suspect, for much the same reasons. I am writing this at 13:16 Central time, before the market closes at 15:00 my time, but there's not much doubt which way stocks will close today, since they're already swirling the drain. Dow has fallen 212.82 (1.85%) to 11,280.90, right at my 11,250 target. S&P500 is down 23.63 (2%) at 1,164.41. Good chance Dow will bounce from here, but if it slices through 11,200, say Good-bye! to another thousand points. GOLD reached up for that overhead $1,712 resistance but only got to $1,709.88. Low was $1,677.37, while the Comex closed $1,695.90. This tells us little we didn't already know. It underscores gold's present weakness, and highlights importance of that $1,675 support. There is more support -- how strong I'm not sure) at $1,646.58, the 150 day moving average. Below that lies $1,605 support (last low) and 200 DMA at $1,591. Five day chart clearly shows silver peaked yesterday at 3303, eased off, then fell steeply in overnight trading. High today was 3262, low at 3127.5c, while Comex closed at 3188.4, down 106.7c. Support now stands at 3125c, but the issue will be settled at 3065c - 3000c. Both 2850 and 2600c are possible targets. The bull market in silver & gold & the bear market in paper currencies and stocks continues. Debt crisis emphasizes & examples all the problems with maintaining a paper currency, & continue to confirm our suspicion governments can only inflate. Use this correction to buy more silver & gold on the cheap. Several Northern readers wrote yesterday chastising me for referring to Washington as the "yankee government." I need to make plain the exactness of that expression, for I fear that I might otherwise unwittingly and unwillingly give offense to some Northern folk of good will and sound sense, which would deeply grieve me. So I'll take a minute here before Thanksgiving to explain. There are two kinds of people from up North: Northerners and yankees, not at all the same thing. Not even all New Englanders are yankees. Northerners are normal human beings who mind their own business, and are pretty much like us except they don't eat grits, collards, or turnip greens and sometimes wear black socks with shorts. Yankees, on the other hand, are tyrants who must re-make everyone in the world to their own self-righteous image, who know better than anyone what is good for everyone and don't mind killing you to enforce it. Behind them, they leave a desert and call it peace. Most if not all the politicians sent to Washington from the South are yankees. I will momentarily drop my mask of the unlettered fool -- Oh, I still don't claim to be anything but a natural born fool, but in fact I am not an uneducated fool -- and try to explain the tragedy playing out in history, the destruction of human freedom under the guise of liberty. Lincoln's war against the South was based on One Idea alone: if a man insists on his right to self-government, he has earned a death sentence. That is the heart of all Revolution, and the root of freedom's annihilation in this country. Washington today believes The Idea as strongly as Lincoln and the Radical Republicans. If you don't understand this root, you won't understand events: why Janet Reno was willing to kill the children at Waco to save them, or why the US had to destroy Iraq & kill hundreds of thousands of Iraqis to spread democracy, or why the War on Terror overseas means the end of rights at home, or why sellers of raw milk must be raided with SWAT teams. I don't think most Northerners believe in The Idea, but still it runs America, in the hands of yankees (remember my definition above). So if you are from the North and not a yankee, don't let me rile you when I use the word yankee to describe the tyrants in Washington, because I'm not referring to you. I have as good a will toward you as I do toward any Southerner. With sorrow I concede that the myths of American history inculcated in government schools contradict everything I've written, & that may make you mad, but I'm not trying to make you mad, only to tell you the truth. On 4 November 1866 that great English lover of freedom, Lord Acton, wrote to Robert E. Lee, "I saw in State Rights the only availing check upon the absolutism of the sovereign will, and secession filled me with hope, not as the destruction, but as the redemption of Democracy. . . I believed that [the Confederacy's] example would have blessed all the races of mankind by establishing true freedom. . . Therefore I deemed that you were fighting the battles of our liberty, our progress, and our civilization, and I mourn for the stake which was lost at Richmond more deeply than I rejoice over that which was saved at Waterloo." On 15 December 1866 Lee replied to Acton, that he considered the "maintenance of the rights and authority reserved to the states and to the people" as the "safeguard" of a free government's survival, "whereas the consolidation of the states into one vast republic, sure to be aggressive abroad and despotic at home, will be the precursor of that ruin which has overwhelmed all those that have preceded it." Truth is the daughter of time. What is the United States today but "aggressive abroad & despotic at home"? Abroad its armies wage countless wars. At home, its agents steal your money, fondle your wives and daughters at airports, stop and search your cars without warrants, and meddle and regulate every act and even every thought of your life. So if you are one of those criminals who insist on your right to self-government, even if you were born north of Mason & Dixon's line, you are my friend and ally, but I would never call you a yankee. And y'all don't bother writing me one of those "The War's over, get over it" letters, because I have a handy delete key on my computer, & I will use it. Besides, the War is NOT over, & they're still waging it -- against YOU and me. Y'all have a happy and blessed Thanksgiving, & remember that the FIRST American Thanksgiving was not celebrated in New England in 1621, but farther south at Berkeley Plantation in Virginia on 4 December 1619.
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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