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The Pre-Earnings Promote On AMZN Begins
It began last night with FB’s earnings release, which triggered a spike in both FB and AMZN stock after-hours: LINK. I have been very clear to the subscribers of my Short Seller’s Journal to avoid shorting AMZN ahead of its earnings release after the market today. I also advised them to take profits on any short positions or put positions last week. I have been on the record stating that I fully expect AMZN to report a blow-out quarter. The trick is to understand how and where they are using GAAP/non-GAAP to inflate the net income and “free cash flow” numbers they will report. AMZN continues to burn cash and will continue to burn cash. That’s the bottom line.
Point in case is this puff-piece from Bloomberg News this a.m. which describes how AMZN generates revenues – yet it fails to describe how AMZN turns those sales in real net income and real cash flow. FYI, AMZN states in the fine-print of its 10K/10Q filings that its reported “free cash flow” number is not a metric that conforms to Generally Accepted Accounting Principles – a fact that should not surprise anyone who does real research and analysis on AMZN.
John B’s Caravan To Midnight: The War On Sanity
John B Wells hosted me on his “Caravan To Midnight” for the quickest two hours of my day. Caravan To Midnight is a late-night internet radio show covering a wide range of topics which include current events, politics, conspiracy theories and unexplainables. This is the second time I’ve been on his program. John B and crew take a refreshing and entertaining approach to goal of audience enlightenment. Both times I’ve been on his show the two hours seemed to last 10 minutes.
In the two-part podcast linked below, we discuss several current topics including the war on cash, the war on gold and the systemic decay of the United States, among some other timely/controversial topics.
I just wonder if people still have the desire for privacy…I don’t mind a fight – I don’t even mind a fight that I can’t win…I’m okay with that if it’s a righteous fight. The only fight you don’t want to get into is an unrighteous fight because you can’t fight with everything you’ve got if you’re in the wrong. But I really wonder if the citizens of this country and of the world have the desire to really live free. – John B
Wall Street was a big scam when I worked there in 1990’s. The difference between then and now is that the bank personnel who’s job it is to enforce financial regulations and compliance are now in on the scam too. They don’t want you to adhere to the law because it affects their bonus. Wall St. and DC have lapsed into unfettered corruption.
I was raised believing there was right and wrong and you were supposed to do your best to do what was right. I’m not a guy who’s terrorized by the idea of sin but it was not cool to do things that were wrong. Well, when I got to Wall St. it was not uncool to do things that were wrong as long as it helped the bonus a little. But now it’s cool to do things that are completely wrong because it leads to a gigantic bonus. – Dave Kranzler – PART 1:
At the beginning of Part 1, John B had asked me what I thought had changed in the last several weeks that acted as the catalyst to cause the stock market to begin falling apart. We got around to addressing that question in Part 2:
The Government is sensing that it’s run out of room to print another $5 trillion and it needs the money it takes in from selling Treasury bonds for the war on terror, the war on Russia, the war on terror the war on Middle East, the war on China – they need that money for an agenda that does not include saving the middle class. “Whatever is coming that’s going to hit, when it hits it’s going to be a whole lot tougher on the middle class than 2008:”
FB/AMZN: Idiotic Retail Daytraders And Hedge Fund HFT Algos
Facebook reported it’s Q4 earnings today. Its “NON-GAAP” earnings “beat” the consensus “NON-GAAP” estimates. As it stands, “GAAP” accounting standards have become an outright joke. The use of “NON-GAAP” reporting has transformed the entire accounting industry into an adult cartoon. “Beavis an Butthead” for corporate earnings reports.
Why even report financials? Why not just report NON-GAAP earnings per share? Feed the ducks what they want to eat. “NON-GAAP” translated into English means, “here’s our earnings if you exclude all the expenses we take every quarter that we consider to be non-recurring.” It’s income not including recurring “non-recurring” expenses. It’s an absolute unethical perversion of financial accounting – kiddie porn for Wall Street analysts and moronic institutional investors.
Based on today’s GAAP earnings and the after-market level of trading, FB trades at 78x trailing EPS, 16x revenues, and 36x cash flow (EBITDA). This is an insane level of valuation for a company with sales derived primarily from mobile advertising. I guess a fact that escapes most investors is that as the global economy sinks deeper into recession, the decline in consumer spending will accelerate and advertisers will cut way back on ad spending budgets. I’ll let you figure out what that will mean for companies like FB that derive their revenues from corporate ad spending budgets.
Perhaps even more confounding is the fact that the stock of AMZN, which reports its 
numbers tomorrow after the close, jumped $10 in after-hours when FB reported. I’m not sure why online widget sales would be correlated with the growth rate of the number of people who log onto Facebook, but it exemplifies the degree which the U.S. stock market has become disconnected from economic reality. (click image to enlarge)
Having said that, making money by trading irrationalities in the stock market is a big part of what my Short Seller’s Journal is all about. I deliver a weekly newsletter to your email with one long-term fundamental short-sell play and one or two “quick hit” trade ideas. The quick hit ideas are designed to take advantage of stocks which pop in price in absence of any true bona fide fundamental reasons. The textbook example of this is Weight Watchers. Just today in fact, the idiots on financial news tv were reporting how a tweet by Oprah caused the stock to jump 23% to close at $13.75.
What they didn’t tell you is that she pulled the same stunt right after Christmas – only stock after that closed at $23.05. I put this stock in my Short Seller’s Journal released on January 3 at $22.95/share. Subscribers who took advantage of this idea and held until Friday that week made 34% on their short position. The ones who played the puts I 
suggested made 600%.
SSJ is a monthly subscription with four reports each week. I include some fundamentals-based research, ideas for using puts and calls to replicate shorting a stock and capital management suggestions.
I am one of your new subscribers. I am a novice in Option trading field. I am just writing to let you know that I enjoy SSJournal and especially examples of how trading strategies could be executed, with actual described cases – to me that is the best way of learning. I think that is most valuable for me. Shorting companies symbols are, of course, very important to get one going in the right direction as well. – subscriber from Sparta, NJ
Is AMZN’s Genie Finally Out Of The Bottle?
A curious news report hit the tape yesterday which described a “major shift in [Amazon’s] thinking” – AMZN Buys Rights To “Wiener-Dog.” I find it curious because, a) the author of the report clearly has not read my Amazon dot Con stock research report and b) there has not been a “major shift” in AMZN’s “thinking.” (click to enlarge image)
This move by AMZN has been endemic to the way Jeff Bezos operates since he transitioned the Company from a simple-model online book-store into a gigantic Ponzi scheme which has fomented one of the most overvalued high profile stocks in history. Oh by the way, he’s fleeced shareholders for 10’s of billions of dollars over the last 20 years.
This news report embodies the myth of Amazon. Every time Bezos rolls out a new add-on to his business model, the AMZN stock bulls herald his genius and the stock goes nuts. We’ve seen this countless times over the years including recently: drone delivery, restaurant menu delivery, same-day delivery, cloud computing, content delivery…And yet, curiously, Bezos has never been able to deliver bona fide net income to his shareholders from his add-on Ponzi business ventures.
His true business model is selling dreams to AMZN perma-bull shareholders as a technique to trigger a stampede into the stock. Heck AMZN stock jumped when Bezos announced his
personal venture to develop a space travel company.
But perhaps the market is finally catching on. AMZN stock is down 2.5% today as I write this. I suspect the market may see the through the transparency of his latest “major shift in thinking.” He spent a few million dollars of shareholder money on a movie called “Weiner Dog” that was thoroughly panned by critics. One might think a few million spent is a meaningless amount to a company with at $285 billion market cap. The problem is that the “money spent” in recent years is being funded with junk bonds.
This is how Bezos has been operating over the last 20 years. Spending money thrown at him by the stock market into business ventures that lose money and burn cash. My Amazon dot Con report lays this out in detail. The truth is that, over the last 20 years, Bezos has become one of the richest men in the world and AMZN stock recently hit a market valuation of $325 billion. And yet Bezos has only been able to delivery $1.9 billion in net income cumulatively to shareholders over the last 20 years.
An Unavoidable Banking System Collapse And The Winds Of War
We are confronted by a geopolitical situation perhaps as dangerous as any we have faced since World War II: chaos and extremism in the Middle East, Russian aggression and expansion, and a weakened Europe threatened by horrendous unemployment, in no small measure caused by a failure to tackle structural reforms in many of the countries which form part of the European Union,” wrote Jacob Rothschild, a British investment banker and a member of the prominent Rothschild family, in an annual Strategic Report of RIT Capital Partners plc (RIT) – Dark Clouds Forming In Europe
Those are fighting words. Throughout history the underlying cause has always been the constant: an Empire in collapse. On the surface the Empire appears to be the United Stats. But a lot of very bright people with whom I’ve been associated over the years would argue that the nexus of the Empire is the mysterious City of London. To be sure, if the western Empire is interconnected by the bankers, the Rothschild family has its fingerprints all over the Fed, the Bank of England and the ECB – and the BIS.
The above statement by Jacob Rothschild might seem irrelevant on its own. But in the context of the fact hat U.S. Government has been the inflammatory source of the geopolitical tensions described above, Rothschild’s commentary should be examined in the context of the war powers that Congress is about to serve up on a silver platter to the occupant of the Oval Office. Or, should I say, the powers that stand incognito behind the sock-puppet who masquerades as Commander-In-Chief.
Today – January 26 – the Senate will discuss a Joint Resolution slipped into the agenda – LINK, see the last entry – by Mitch McConnell which will give the President the ability to exercise war powers unilaterally without Congressional approval on pretty much anything considered Muslim. Ron Paul has described McConnell’s proposal as “the most massive transfer of power from the Legislative to the Executive Branch in our history.” LINK
Here’s the McConnell resolution: (a) In General.–The President is authorized to use all necessary and appropriate force in order to defend the national security of the United States against the continuing threat posed by the Islamic State of Iraq and the Levant, its associated forces, organizations, and persons, and any successor organizations.”
This is how it compares to the resolution passed in 2001, which triggered the war on “terror:” The resolution passed in 2001 only authorized force to be used concerning those involved in the eventsof September 11, 2001, but it has been wrongly used to justify all sorts of activity and force that it clearly has nothing to do with. But this proposed S.J. Res. 29 has no limit.
One minor correction. This Resolution is limited by Section 5b of the War Powers Resolution passed in 1973 which requires that the President check in every 60 days with Congress once he’s initiated war activity on suspected “terrorists”. Guess what? If you have a beard and suntan, you are a suspected terrorist by the terms of the McConnell proposed legislation.
Quite frankly, especially in the context of the commentary by Jacob Rothschild, this proposal by McConnell is the next step in the direction of giving the President dictatorial authority to start war with anyone, anytime. Anyone who can’t see this coming, or who has “hope” that the next President will derail this inevitability, is either tragically naive or catastrophically ignorant.
Just for the record, the two biggest contributors to Mitch McConnell’s campaign funding bank account are Blackstone Group and Goldman Sachs. With JP Morgan at #3, three of the top five are the most influential financial entities on Wall Street. Any questions about who’s in charge?
Given the source of the monetary control over Capitol Hill in its entirety – yes, including Elizabeth Warren and Bernie Sanders – it makes sense that the impetus to start a world war is coming from bankers, given that the global financial system is on the cusp of an unavoidable collapse.
Those who do not learn from the past are condemned to repeat history (George Santayana). World wars, or their historical equivalent, occur when a previously omnipotent Empire becomes impotent. The only threat to the well-being of the west, specifically the United States, is the unavoidable financial and economic collapse lurking around the corner. History tells us that, unless something statistically improbable occurs, a world war is also right around the corner.
SoT – Peter Schiff: The U.S. Is One Gigantic Bubble Economy
The admission that the economy is so weak that it needs more QE is going to destroy the narrative that the U.S. economy is in great shape and it’s no longer going to be the safe haven for capital around the world…it’s going to prick the bubble in the dollar…and people are going to realize that we’ve never recovered from anything, the economy is sicker than ever, the Fed’s going to make it even sicker with more of its toxic monetary policy, the dollar’s going to tank and the price of gold is going to skyrocket – and people need to prepare for that now. – Peter Schiff on the Shadow of Truth
When Mt. Vesuvius blew, no one knew when it would happen or how big the eruption would be. Everyone knew a volcanic event was going to occur and yet, the magnitude of the event caught a lot of people by surprise. The eruption destroyed two Roman cities and several surrounding settlements. It killed an estimated 16,000 people. The question is, how come more people didn’t leave the area surrounding Vesuvius when they knew that something was going happen at some point?
The United States financial system – including the viability of the U.S. dollar – is analogous to the eruption of Mt. Vesuvius. A lot of people know something is wrong – evidenced by the growing support for the Trump candidacy – and yet 99.5% of the population is ignoring the warning signs of a systemic eruption of unknown magnitude. It’s an event that draws closer with each passing day.
The warning signals of the coming financial markets collapse are in full view. The warning signal from the junk bond market, triggered by but not limited to the collapsing energy sector, is beginning to spread into and infect the rest of the financial markets like an uncontrollable virus. If you are an investor or a professional money manager, what more of a warning do you need that this:
That chart resembles a giant tsunami that has coiled offshore and is getting ready to slam into the the nearby beach. Only in this case millions of people remain on the “beach” to watch the horror show unfold without leaving for safer ground. It’s as if everyone knows a catastrophe is about to occur and yet most remain embalmed with the hope that it can’t really happen.
The willingness of people to park their paper in financial assets like bonds is simply a function of their lack of understanding of the problems that exist and their false confidence in Central Banks. – Peter Schiff
The systemic causes of the financial crisis that hit in 2008 – and which was really a de facto financial system collapse – were never properly treated. Rather, they were medicated by heavy doses of money printing and free money, the latter which is otherwise known as ZIRP. The moral hazards of this monetary policy have fomented in impending systemic eruption which will be the financial market’s equivalent of the historic Mt. Vesuvius volcanic blast. The timing of this is just as unpredictable as the consequences.
The Shadow of Truth hosted a conversation with Peter Schiff to discuss to discuss the impending financial market eruption and the inevitable dollar crisis, which will ultimately rip apart the U.S. financial and economic system:
Why Is This Big Hedge Fund Manager Terrified?
When I saw this comment from Ray Dalio I said to myself, “this isn’t someone trying to be a prognosticator or compassionate person, this is someone that has had an epiphany that his huge success probably had more to do with his rolodex and endless supply of free money more than anything else and is becoming depressed over that realization.” His All Asset fund was down 7% in 2015 and negative 2 of the past 3 years. – A colleague who manages money in an email to IRD today
Ray Dalio has achieved “rock star” status in the hedge fund world. Per a report sourced by Zerohedge, Dalio appears to be frightened by the prospects of the “normalization” of Central Bank monetary policy. In fact, he penned an op-ed in the Financial Times in which he states: “Since the dollar is the world’s most important currency, the Fed is the most important central bank for the world as well as the central bank for Americans, and as the risks are asymmetric on the downside, it is best for the world and for the US for the Fed not to tighten.”
What has Ray frightened? There are several highly problematic assertions embedded in that comment by Dalio. First and foremost is the idea that the dollar is the world’s most important currency. I wonder how China might respond to that comment? China has been methodically getting rid of its use of the dollar. In fact, it can be argued that the world’s most important currency is gold, which is why China and Russia have been accumulating gold on a daily basis with both hands. I find it interesting that Dalio can discuss currencies and monetary policy and not utter one word about gold.
Dalio has been making the argument that economic vitality is dependent on asset levels. This idea is endemic to the hubris behind Wall Street’s financialization of the monetary system. The truth is the only outcome accomplished by a system based on fiat currency, fractional banking and the financialization of assets is the monarchical enrichment of money skimmers like Dalio and his Wall Street bank cohorts. If the Fed were to begin raising interest rates in earnest, it would remove Dalio’s ability to skim the system.
As I discussed in a blog post last week – LINK – contrary to Dalio’s assertion, financial assets do not create real economic growth. If anything, the proliferation of financial assets creates nothing more than Wall Street-enriching bubbles which culminate with a systemic collapse that destroys everything. To correlate the trading level of financial assets with the creation and support of economic growth is either an intentional misrepresentation of the truth for the purpose of self-interested preservation or naive ignorance. My inclination is to dismiss the latter as beyond probable.
Debts have continued to build up over the last eight years and they have reached such levels in every part of the world that they have become a potent cause for mischief…It will become obvious in the next recession that many of these debts will never be serviced or repaid, and this will be uncomfortable for a lot of people who think they own assets that are worth something. – William White, former BIS chief economist – Telegraph UK
The debt referenced above by the former BIS chief economist are the credit market liabilities to which Dalio refers. It is the world’s inability to service or repay them that Dalio fears – not the contraction of economic activity. Real economic growth has been contracting for at least 8 years. Easy monetary policy only serves to exacerbate the predicament. Of course, the removal of easy monetary policy sabotages Dalio’s ability to continue making a fortune off the inflation of financial assets.
A collapsing global financial system will take away Wall Street’s continued enrichment from QE and ZIRP. This is what has Dalio frightened and this is why he is urging the Fed to refrain from raising interest rates. Perhaps he’s also making an appeal for more QE. What better way to re-inflate monetary assets than for the Fed to print more money?
Unfortunately QE will eventually lose its effectiveness as an asset inflator. The old law of diminishing returns. I have no doubt Mr. Dalio is familiar with that law of economics. But he’s lost sight of this reality because he’s been blinded by wealth-induced hubris. At some point that proverbial can being kicked by the Fed and the U.S. Government will no longer move. That’s when the real fun begins and that’s when people will wonder why Dalio never discussed gold except in front of his elitist cohorts at the Council on Foreign Relations.
Energy Debt Is Imploding – Housing Market To Follow
“The banks are still clinging to their reserve reports and praying. The bonds are all toast. Most are in the single digits or teens.”
I asked a former colleague of mine from my Bankers Trust junk bond days who is now a distressed debt trader what was going on in the secondary market for energy sector bank debt and junk bonds. The quote above was his response.
Zerohedge posted a report last night with a Bloomberg article linked that describes what is going on – “Assets selling for far less than what companies owe lenders – Creditors are left holding prospects no one wants to buy.” the article further cites the ridiculously small reserves that four biggest banks in the energy sector have set aside: “Bank of America Corp., Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. — have set aside at least $2.5 billion combined to cover souring energy loans and have said they’ll add to that if prices stay low” – (Bloomberg).
Considering that those four banks combined probably have at least $100 billion of exposure to sector – not counting the unknowable amount of credit default swaps and other funky OTC derivative configurations the financalized Thomas Edisons at these banks dreamed up – the $2.5 billion in loss reserves is a complete joke. It’s an insult to our collective intelligence. Of course, Congress and the SEC took care of the problem of forcing banks to do a bona fide mark to market after the 2008 financial crash.
This is the 2008 “The Big Short” scenario Part 2. The banks underwrote over $500 billion in debt they knew was backed by largely fraudulent reserve estimates. I bet most of the “professional” investors at pension funds and mutual fund companies were not even aware that oil extracted from shale formations trades at a big discount to WTI. When creditors go to grab assets in liquidation, they’ll get a few handfuls of dirt to resell. And when the bondholders go to grab assets, they’ll get an armful of air.
The same dynamic is about to invade and infect the housing market. Notwithstanding the incredulous existing home sales report released on Friday – (how can the NAR expect us to believe that December experienced the largest one month percentage increase in existing home sales in history when the economy is sliding into recession and retail sales were a disaster?) – the housing market is on the cusp of imploding. I was expecting to see a unusually high number of new listings hit the Denver market right after Jan 1st and so far my expectations have been met. The acceleration of new listings is being accompanied by a flood of “new price” notices. I believe a rapid deterioration in home sales activity will take a lot of the housing bulls by surprise.
The stock market’s reflection of my assertions about the housing market is exemplified by the homebuilder stock I feature in this week’s issue of the Short Seller’s Journal. This stock is down 16% from when I first published a stock report on this Company in 2014. This is a remarkable fact considering that the S&P 500 is down only 4% in the same time period AND the Dow Jones Home Construction Index UP 8% in that time period. This company happens to originate a high percentage of the mortgages used to finance the sale of its homes.
The company relies on an ability to dump these mortgages into the CDO and Bespoke Tranche Opportunity configures conjured up by Wall Street in order to seduce dumb pension and mutual fund money into higher yielding “safe” assets. As the energy debt market implodes, it will cause the entire Wall Street supported asset-backed credit market to seize up. The next biggest losers after the energy sector will autos and housing. Businesses owners looking to improve their utility bills may want to check out commercial electricity quotes 2019 for more information on affordable energy.
This week’s Short Seller’s Journal features the above housing stock plus a copy of the report I originally published (the data is old but the ideas behind why the stock is a short are intact, if not more pronounced) plus I have presented two “Quick Hit” energy sector stock short ideas. All three ideas are accompanied with my suggestions for using puts and calls to replicate shorting the stock You can access this report here:
A Quick Note On Today’s Existing Home Sales Report
What about the biggest rise in existing home sales on record in December? These guys are offending my sensibilities. By virtue of all the fake statistics and bogus market action, there has to be something seriously wrong right now. – John Embry email to IRD
Existing home sales are based on a sample estimate of contract closings. The actual “sale” took place when the contract was signed 30-45 days ago. The headline report is based on a “seasonally adjusted annualized rate.” The big farce about statistics, away from the obvious fact that “seasonal adjustments” are a polite way to say “statistically manipulated,” is that the metrics reported in terms of percentage changes can make an economic report sound a lot better than the underlying reality.
The underlying reality in today’s report is that allegedly a technical glitch cited by the NAR pushed some closings from November into December and therefore artificially depressed the November number and artificially inflated the December number. This is only part of the explanation for the 14% seasonally adjusted annualized rate of increase for December vs. November. The balance of the 14% seasonally adjusted annualize rate metric is most likely attributable to the “seasonally adjustments” applied to the sample data. It’s analogous to taking the scraps of pig of the slaughterhouse floor and putting these scraps though a grinder to produce “sausage.”
By the way, does anyone find it a bit suspicious that a “seasonally adjusted annualized rate” metric is used to describe what may or may not have occurred during one month? Think about that.
Notwithstanding this statistical smoke and mirrors, pending home sales for November dropped 1% vs an expected rise of .7%. Pending home sales are contracts signed, most of which evolve into closings, which become existing home sales. Some of this decline in pending home sales should have been reflected in December’s existing home sales – in other words, it calls into question the credibility of the existing home sales report.
Furthermore, the November pending home sale number should translate into lower closings, i.e. existing home sales, for January. That latter assertion relies on an unwillingness of the NAR to completely lampoon the statistics for January’s report- an assumption that may be highly naive based on the degree to which the NAR has been adulterating the statistics for at least the last year.
One last thing. If you find yourself wanting for some intellectual entertainment this weekend, compare the commentary from the NAR’s Larry Yun in the Pending Home Sales report and his commentary in the Existing Home Sales report. It epitomizes the phrase, “through the looking glass.”
The homebuilder stocks are rebounding right now on the back of that rigged existing home sales report. One of the featured stocks in this week’s report will either be a homebulder or a homebuilder supplier. The last h/b supplier I featured is now up (i.e. down in price) over 13% from the 12/7/15 report. The last h/b I featured 2 weeks ago is now down 8%. You can access my Short Seller’s Journal here: SSJ Subscription
The Oil And Gas Credit Collapse Is Going To Be Catastropic
We’re headed toward another big credit explosion and I think what’s happened in the oil market is will trigger that. The perfect poster-child of what’s going to happen to the stock market is what’s happened to Kinder Morgan stock. – interview with CrushTheStreet.com
It speaks volumes about the corrupted nature of our financial markets that this news report does not cause a huge downward price adjustment in the entire stock market: Big Banks Brace For Oil Loans To Implode. This is, minimally, t $500 billion issue and that number does not incorporate at all the size of the derivatives exposure to oil sector debt. Move along, nothing to worry about here…it’s reminiscent of circa 2007, when Bernanke stated that the problems developing in the mortgage market were “contained.”
And speaking of Kinder Morgan, I listened to the Kinder Morgan conference call because I’m working on stock report on KMI. I forgot what a Broadway play production these investor calls are. Richard Kinder is a grade-A snake-oil salesman. Everyone seems to have forgotten that he was the COO of Enron when Enron’s Ponzi scheme was being constructed. He was college buddies with Ken Lay. But he left in 1997, buying out an Enron pipeline subsidiary with William Morgan. Everyone thinks Richard Kinder is squeaky clean and they don’t associate him with Ken Lay. It’s emblematic of the ignorance, denial and fraud embedded in our system. KMI has been issuing debt to make its dividend payments and the only reason they cut their dividend is because their bankers told them they would have trouble issuing more debt this year. Kinder kept referencing the possibility of stock buybacks on the call. Are you kidding me? You can visualize the sycophantic big bank analysts writing everything down word for word in order to regurgitate them robotically in farcical equity reports designed to suck more idiots into the stock.
More on Kinder Morgan soon. As for the manipulation of the gold market, I’ve mostly managed to separate my emotions from the attacks on gold. When you think about it, they have no choice. The ONLY way they can support their lies about the relative health of the economy and financial system is by attacking gold and making sure the price doesn’t take off. Just like they can print an unlimited amount of dollars using Bernanke’s infamous “electronic printing press” to defer the collapse of the banking system, they can print an unlimited amount of paper gold certificates in order to use the paper trading apparatus of the Comex to keep the price contained. Like all paper schemes, this one will fail spectacularly. The only unresolved issue is timing. That’s impossible to predict.
CrushTheStreet.com and I discussed these topics in depth and others, including China and the U.S. economy: