Yesterday I fouled up sending out my daily commentary, but it contained the following, so I am sending it again to make sure you all see it. Yesterday I left out the detail that China, too, climbed aboard the Great Ship Inflation by lowering bank reserve requirements. All & sundry, East & West, still believe a lie & strong delusion, namely, that printing money will somehow fix the problem that printing money caused. And for you titillation, amusement, & satisfying vindication of the truth, I offer the following figures on PREVIOUS Federal Reserve swap initiatives, such as the one they announced yesterday to bail out Europe. I have given below the date of the initiative, the Dow on that date, the number of days later the next Dow reading was taken, & the LOSS by that date. Forget not, neither overlook ye, that in every single case the Dow INITIALLY rose strongly, then shortly began falling again. Wow, it's almost as if the stupid swap initiative actually DROVE STOCKS DOWN. 12 Dec 2007, Dow 13,473, 41 days later down 11%. 18 Sept 2008, Dow 10,605, 22 days later down 20% 13 Oct 2008, Dow 9,387, 14 days later down 13%, and, learning nothing from experience, in two weeks the Fed tried it again, as follows: 27 Oct 2008, Dow 8,175, 24 days later down 8%. Them's the numbers, folks, & I hope y'all get the message: the Fed is NOT coming to save you, & all their fancy moves are just so much feckless shuffling on their way over the cliff. But watch out as the mad-man goes screaming over the brink: he is grabbing everyone to drag them over with him. Miss not this point: by yesterday's action the Federal Reserve made itself Lender of Last Resort to Europe and the world. SOMEbody called the Germans' hand & told Ben the Bernancubus to print a-pace. In a paroxysm of Double-Speak, Dallas Federal Reserve President Richard Fisher said, "We are not bailing out . . . Europe. We are trying to meet a shortage of dollars." Right, right, and "the check is in the mail," too, etc., and all those other mighty uncandid & disingenuous protests to the contrary. They did what they did, & the thing speaks for itself. Don't try to play Adam on us and re-name the giraffe a hippopotamus. It's a giraffe -- see the 12 foot neck? All right, enough of this fun! Point for y'all to take home is NOBODY IS GOING TO SAVE YOU. Every government in the world & every central bank is working together & employing the same failed & unworkable strategy: print more money. 'Twill not work. Has reached the limits of its historical epoch. 'Tis dead as a dodo, but if you act not to protect yourself, 'twill suck you down the drain with it. Only three ways to protect yourself: silver, gold, & productive assets: farms, businesses, all enterprises that produce an ongoing & recession-proof stream of income. Or you can sit there waiting for the Fed's cavalry to come save you, until you turn green with slime. [End of yesterday's commentary] I based this week's scorecard on last Wednesday's closes, since last Friday was a holiday. What leaps at your eyeballs first? Stocks jumped nearly 7% this week, thanks to the Fed's propaganda move, the swap initiative. The quotation above shows you what I think of that, namely, it will accomplish no more than a brief flash in the pan, then stocks will fall to lower levels than they enjoyed before the Fed's trick. Count on that. The Fed's dog & pony show didn't hurt silver & gold, either, up 2.3% and 3% respectively. Clearly, very few in the public have yet realized what central banks are doing to them, since the Fed has now joined them all in a cartel to inflate even more -- proving once again, as if any of y'all were blind, stupid, & deaf enough to have missed all the previous occasions when they've demonstrated the same, that they have no other remedy but to inflate. And as long as they inflate, silver & gold will keep on rising & the economy will keep on dying. Dow closed at 12,019.42 today, grinding lower all day to end at 0.61 points down. S&P500 dropped 0.3 to 1,244.28. Overhead 12,200 is resistance, below support lies at 11,200. That latter will be the next level broken. US DOLLAR INDEX dropped with the Fed's announcement, but has recovered. Today it rose 30.9 basis points (0.4%) to 78.637. The top of the foregoing trading channel comes in today about 77.50. Truly, though, I will count the dollar as rising & likely to rise much more, as long as it remains above 78.50. There might be some undertaking more inefficient, froward, & moronic that a central bank, but it hasn't been seen since the Soviet Union collapsed. Fed's dancy-dance did almost nothing for the Euro. It rose two days, then today gave back almost 100% of the gain. Closed 1.3394, down 0.52%, & still sinking like a lump in a churn. Yen remains under the thumb of the Nice Government Men. Closed today at 128.320c/Y100 (Y77.94/$1). I keep looking at these gold and silver prices & closes this week, and my suspicion rises like a Tyrannosaurus rex when he's hungry. Monday & Tuesday before the Fed's trick gold traded in an identical range, virtually to the penny. Then it jumped $32.10, but struggleth still to pierce $1,750. Now if I were the Nice Government Men -- and I thank God I am not -- I would try to stifle gold in anticipation of the Swap Initiative. And of course, tis always easiest to do that by hitting silver with large selling. So Tuesday when gold rose slightly ($2.60), silver dropped 30.8c. Next day came the announcement & gold leapt $32.10 while silver vaulted 87.8c. Does any of that look suspicious to y'all, or am I just a paranoid-conspiracy-theorist-seeing-evil- government-agents-behind-every-market-move? Mercy, it don't matter two hoots & a holler, because the dimwits trying to manipulate the market will never succeed at it, more than a day or two at a time. If they are so powerful & were really able to keep the gold price down, why has gold risen from $252 in 2001 to $1,745 today and silver from 401c to 3262.1c today? Yeah, boy, they're as adept at that as they are at delivering mail. Gold closed today up $11.70 to $1,747.00 while silver fell off 7.4c to 3262.1. Now that might be manipulation & conspiracy, but it might merely represent longs taking profits on silver at week's end. Lines are plainly drawn in the sand. Gold must pierce $1,750, silver must pierce 3300c, then 3400c. Down below gold must not drop lower than $1,720 or silver lower than 3150c. I am still hesitating to decide, but as day passes day it looks less and less like silver & gold will hit lower lows than those we've seen. Lift up your eyes to the horizon, & think. Silver & gold are rising, all else falling. If the US government and the Fed wants to offer you a SUBSIDY to buy silver & gold by driving the price down temporarily, why wouldn't you take the subsidy and buy? Zut alors! On 2 December 1804 Napoleon Bonaparte was crowned emperor of France at Notre Dame Cathedral in Paris. Let us think. The French Revolution began in 1789 with a king on the throne, declared a republic, killed the king, his wife, and a million or so aristos & bystanders, waged war all over Europe, and 15 years later ended up with another king -- well, an emperor. Don't look like progress to me. On 2 December 1852 Louis Napoleon Bonaparte was crowned the Second Emperor of France. Let us observe charitably that he was not the man his uncle was. The words "feckless pipsqueak" spring to mind, but perhaps that is too harsh. Then again, mayhap not harsh enough. On 2 December 1859 John Brown, insurrectionist, murderer, & terrorist, danced in the air when he was hanged for his raid on Harper's Ferry Armory the previous October. Odd, ain't it, that a man who claimed he was fighting to free black slaves would begin by killing several of them, and some free ones as well. But then, you can't make a terrorist omelet without breaking eggs. Ask Joe Stalin. Y'all enjoy your weekend!
Argentum et aurum comparanda sunt —
Silver and gold must be bought.
— Franklin Sanders, The Moneychanger
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