We’re now more than halfway through August, and (for me at least) it’s impossible to view recent events as anything other than a clear warning that some major economic inflection-point lies directly ahead of us.
As a Big Picture guy, I pay very little attention to the short-term minutaie upon which the propaganda machine focuses (and uses to mesmerize the Sheep). However, when I see series’ of such data, and collections of such series’ all pointing toward a similar conclusion; then that’s when my own personal radar starts to generate warning-blips.
In previous posts, and previous editions of This Week In Precious Metals I have endeavoured to string-together this confluence of data and economic anecdotes, so the list below should be thought of as only recent supplements to that steady trickle of news items – and not any kind of comprehensive summary:
1) More lawlessness in (U.S.) banking. In two recent legal developments, we first heard of a settlement to a five-year old fraud litigation (very similar to the plundering of MF Global) where the conclusion was essentially that it’s just fine for bankers to steal the money out of their customers’ accounts. Concurrent with this, we hear word that there almost certainly will not be any criminal charges relating to MF Global itself. If stealing is legal, then where’s the “crime”?
2) More rapid economic deterioration. As most of the U.S. economic indicators go from bad-to-terrible, the collapse of Europe’s fraud-crippled economies also continues to accelerate. The propaganda machine was so alarmed at this obvious trend that it felt compelled to publish a (new) Big Lie, “explaining” why Iceland’s economy (which did not capitulate to the banksters) is doing so well, while all the other banking-serving economies of the West are plummeting toward collapse.
3) Supply/demand factors within the precious metals sector become steadily more bullish. While I plan on expanding on this thought in considerable detail in an upcoming commentary; let me just say for the moment that taken together that data is also strongly suggestive that we are heading toward a powerful rally
4) The “technical base”. Regular readers know I have little use for almost all T/A, since it is based upon a list of hopelessly flawed assumptions. However, there are limited facets of this branch of statistics which retain some level of validity – even in manipulated markets. In this case, when we see a market trade sideways over an extended period, the reason why we suspect that this market is about to erupt is that in relation to other asset classes this market has become steadily more under-valued.
While I wrote an article last year entitled Why 2111 Is Not 2008; this year on several occasions I’ve come close to writing “Why 2012 Is 2008.” Indeed, the parallels are more than a little eerie. To begin with, we are again nearing the end of another U.S. election-cycle. Despite the fact that a “crash” has not yet been manufactured this year (as occurred in 2008), we certainly cannot rule-out another U.S. made-for-election “crash”.
The reason why a manufactured crash remains highly likely is because of one of the few differences between 2012 and 2008: oil prices have not (yet) exploded into a wild price-spiral. When the bankers and the Bush regime orchestrated the Crash of ’08, the timing of that event was not of their own choosing. There was literally no other way to abort the commodities price-spiral then in progress – with the likely outcome (even back in 2008) being hyperinflation.
Today, the Obama regime can afford to be more strategic about when it chooses to “crash” markets (and economies). As they themselves observed in 2008, allowing enough time for Americans to actually think after the initial crisis proved fatal for the Bush Republicans. Having castrated the U.S. economy, and inflicted their phony “War on Terror” on the world; even the brainwashed American public wanted nothing more to do with the odious Republicans.
But that was four, whole years ago. Now the American amnesiac-voter already tires of Tweedle Dee, and many are (amazingly) yammering for Tweedle-Dumb to be restored to the Throne in this pointless exercise in political “musical chairs”. Thus the Obama regime worries that they may not be given two, full terms to wallow in the public trough – as did their Republican predecessor.
Apart from the greed-factor there are also egos to consider. Could anything be as humiliating as not being able to get elected as often as George Bush Junior? Thus we cannot underestimate the desire (need?) of the Obama regime to manufacture some hysteria just before election day.
In a moment of panic, the American amnesiac-voter can absolutely be counted upon to totally forget every “reason” they had in their minds for voting only days earlier. Instead, they would be ripe for the lies of a smooth-talking Incumbent – warning the frightened Sheep that only he has the “experience” necessary to deal with this self-inflicted crisis.
As I’ve noted before, in any crisis scenario it’s very possible that gold and/or silver could first move lower rather than higher. This has nothing to do with what these markets should do during that crisis and everything to do with what the banksters are capable of manufacturing during a general panic. When we think of how easy it is for the banking cabal to lead the Sheep around by the nose in general, think of how much easier it gets to herd the Sheep when they are all in a panic.
This does not mean we will have a panic/crash in the next few weeks, I merely explain why this remains a likely scenario. Never forget that markets can move in two directions…even when they should only be moving in one direction.
For the moment, precious metals prices continue to drift aimlessly. Gold is set to close the week somewhere above $1610/oz, while silver appears to have found a new “magnet”: the $28/oz level – after spending weeks gravitating around $27/oz.