Is Desperation Setting In?

Central banks in the West are emptying their vaults in an attempt to maintain the illusion that the national currencies they manage are immune to monetary debasement.  The central banks are trying to perpetuate a system in which governments believe they can borrow and print money endlessly to fulfill the impossible promises of politicians.  – James Turk on King World News (link)

After the metals staged their usual overnight rally while the physical gold hoarding Asian markets were open, this morning featured two HFT-algorithm flash crashes.   One at 7:00 am. EST and one right at the Comex open (the latter occurs at least 85% of the time).

This graph illustrates the action – note the long “wicks” at the bottom of the red candlesticks, which is our indication that the flash-crash operation triggered computer-driven “stop-loss limit” selling from the hedge funds:

(click on graph to enlarge)


Neither attack on the metals was accompanied by any possible news triggers.  The dollar didn’t move, which is something we would have expected if there had been some kind of fundamentals-based trigger.  The SPX futures ramped up at the same time the metals were hit in the first flash crash.   It is clearly unmistakable Fed intervention designed to keep a lid on the recent rally in the metals.   But why?

The intervention in the gold/silver market reflects desperation from the western Governments/banks, especially the U.S., in order to prop up the U.S. dollar.   Russia and China are getting ready to sign a series of gas/oil deals which will be transacted using rubles/yuan.  Russia’s main bank just signed up for China’s equivalent of Visa/Mastercard after the U.S. sanctions restricted the use of Visa/MC in Russia.   The dollar has dropped back below the critical 80 level (US dollar index) just as quickly as it popped back over 80 after Janet Yellen delivered her highly “engineered” post-FOMC meeting press remarks.

It is becoming increasingly clear – at least to me – that the U.S. economy is now a walking corpse.   The housing market is about to go into free-fall like it did starting 2006.  How do I know this?  Because of the exhaustive analysis I’ve been doing on the housing market data and because the homebuilder stocks are now diverging significantly to the downside from the rest of the stock market.   The homebuilder stocks behaved this way starting in mid-2005, about 6 months before housing market reflected the deteriorating fundamentals of the housing market back then.   The homebuilder stocks similarly peaked in May 2013.

There is a big “accident” in motion for which impact could occur at any time.   The stock market action from Friday thru Tuesday is an obvious signal.  The quick reversal from its recent dead-cat bounce is another.  The dollar is in big trouble and the Fed is trying desperately to fight that by suppressing the metals. When that fails, I bet we’ll see an escalation in military operations.


8 thoughts on “Is Desperation Setting In?

  1. Yep, military action will be the catalyst to allow the system to fail. They need this cover in order to distract from the currency plunge. They will not sit back and have the financial system implode, which will lead to their lynching. They MUST create a crisis that stuns the population into submission.

  2. I think the biggest tell of all, requiring zero technical analysis, fundies, etc is the news yesterday of goldie sacks exiting major sectors where they were previously making tonnes of money (never a bad losing day in trading).

    does this mean they’ve also cancelled their Goldplan subscription to the newsletter of that notorious bankstah brown-nosing peddlar Armstrong, because even they don’t believe his unique delusional steaming swill anymore?

    I can still find many articles saying “reeeelllllaxxx, Dave, nothing gonna happen till 2021”–here’s another:

    See? rates will be staying low= NO financial crisis till after 2021! LOLOL.

  3. Toyota is recalling over 6.4 million vehicles globally. I couldn’t begin to count how many recalls I have now seen over the last 60-90 days from pretty much all auto makers. There are the obvious reasons for this (safety, liability, huge settlements, etc). I just wonder how much of this is to try and drive traffic to the showroom. Some of these parts replacements can’t amount to much more than a $50 gift certificate to come and look at new cars without all of these safety concerns. May need to factor that into future auto sales figures being reported.

    1. The stock of high quality used cars is piling up like crazy because all these dealers are offering deals to trade in your old car for a new one at zero or near-zero financing. The dealers then shoot the used cars thru the auction system and the usually seedy used car dealers have used stock in very good condition AND they’ve already been thru any recall repairs PLUS you can finance your purchase at low rates as long as you can fog a mirror

  4. We are in a process toward market monetization of gold weight now that gold floats in real-time. The stage was set in 1971. The dollar’s true role will show itself soon enough, that of a real-time market measure for gold weight where the weight is the settlement currency. When gold is seen as a currency from this standpoint, it actually serves to save the dollar. This has been baked into the cake since 1944. Circulating bullion as a currency purges debt right out of circulation and makes debt manageable in a Yin-Yang debt-asset monetary hybrid with symbiotic characteristics.

  5. One more piece of the puzzle of how bad things are getting:

    Google the statement

    “Social Security, Treasury target taxpayers for their parents’ decades-old debts”

    and you will see how social Security is going after overpayments that are decades old. The ten year statutory limit has been removed from the law so Social Security is going after any perceived overpayments of benefits.

    My take on this, If the government were on solid financial footing it wouldn’t need to do this, it would just write off the money and not bother trying to collect real old debts. Nowadays, the government is going after the loose change in the couch cushions to pay its bills and maintain the façade that all is well. I think it was George Carlin who said “…. now they’re coming for your Social Security money.”

    How right he was, but they can’t take what they can’t find, just ask the folks in California who found all those gold coins on their property. Neither robbers nor tax collectors nor FDR’s executive order had any effect over those coins hidden in the ground.

    1. You have no right to complain when the choice is clearly available as to whether the market chooses to use debt currency or debt-free currency such as gold and silver. The choice is there as a matter of fact.

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