Beiträge von bullionbulls

Oligopolies: Too Big To Shrink

As regular readers know, one of the first things learned by beginning economics students is that monopolies and oligopolies are unmitigated evils in any free-market economy. They are (by definition) non-competitive and totally parasitic; and in the rare instances when one of these abominations is perceived to be a necessary evil, that inherently parasitic nature demands that they be securely restrained in a regulatory straitjacket.

Sadly, this appears to also be one of the first lessons forgotten by economics graduates, apparently moments after accepting their degrees. For what do we see in the global economy today? A world which is not only saturated with these mega-monstrosities, but where much, most, and in some cases all regulation has simply been put through a paper-shredder – and all with the complete blessing of the intellectual zombies in the economics community.

After a quarter-century of allowing these corporate oligopolies to rampage out of control, the carnage is plain to see. The worst revenue-crisis in the history of Western democracy threatens to bankrupt most if not all of these economies. Our tax-base continues to wither and die. We see on the one hand Big Business and the ultra-wealthy refusing to be taxed (while parasitically enriching themselves at the fastest rate in history). Meanwhile everyone else simply has nothing left to tax.

Forty, solid years of declining wages (in real dollars) combined with forty, solid years of rising structural unemployment has not only caused our poverty rates to more than double (and created millions of homeless), but has transformed most of our former middle-class into a brand-new class: the “working poor” – drones who exist merely to service the Corporate Oligarchs. The result of this forty-year slide in our standard of living is that it now takes two incomes in a household to provide the same standard of living as was formerly provided by one-income families a mere generation ago.

However, you would never know of this crisis by reading/viewing any of the outlets of the Oligarch-controlled, mainstream media. In the world of Big Media, our governments are being bankrupted by “too much spending”. The disconnect with the real world only intensifies when Big Media tells us what it thinks we “can afford” and what we “cannot afford”...

Full commentary: http://www.bullionbullscanada.…opolies-too-big-to-shrink

The Virtues of the Humble Investor

Ironically, there are few if any virtues in our society which are as under-appreciated/under-respected as humility. Living in a me-first world which worships the “Alpha wolf”, who aggressively takes what he wants in life; humility is mistakenly confused for weakness or timidity.

Yet being humble in no way implies being meek. One can be humble while still refusing to be anyone’s doormat. In fact all that is implied by humility is the opposite of arrogance. The arrogant individual is prone to being impulsive, over-confident, and careless (if not reckless). The humble person is none of these things, instead leaning towards prudence and caution.

While so much of what is taking place today in the global economy is confusing (and frightening) to the ordinary person, what is utterly unequivocal is that people need to be completely focused upon prudence and caution when handling their financial affairs. We have already seen once (in the Crash of ’08) what happens to the arrogant; and as many commentators (including myself) are warning people, 2008 was nothing but a warm-up for the economic chaos which lies ahead.

Clearly it is the Humble Investor whom people should be placing upon a pedestal as their role-models to emulate, were it not for the fact that their humility prevents these individuals from accepting such a position in the spotlight. And it is “humble” investment strategies which investors should embrace today, as opposed to the world of high-frequency trading, exotic financial products, and endless acts of paper-fraud – epitomized by the ultra-arrogant bankers of Wall Street.

Understand that with the most rigged, corrupt markets in history, with unprecedented volatility, and with entire governments literally declaring bankruptcy; now more than any time in our lives (no matter how old we are) we must be “playing defense” with our investing. It is important to note this explicitly, because of what playing defense implies.

When we are in a defensive mode as investors, the primary objective of any/every investor is preservation of capital. Period. I completely understand that because of the gross economic mismanagement of our corrupt, incompetent governments that many people feel they need to focus (first) on maximizing return. That is the path to financial suicide. It was the people who were looking to “maximize return” who were especially devastated in 2008, and it those people who are certain to be wiped-out (again) in the years ahead...

Full commentary: http://www.bullionbullscanada.…es-of-the-humble-investor

Deutsche:

Die Tugenden des Humble Investor

...Glücklicherweise gibt es einen bescheidenen Anlagestrategie, die wir nutzen, um unsere bescheidenen Investitionen in Gold und Silber anhäufen können: Cost-Averaging. Für den Neuling Investor nicht vertraut mit dieser Sicht ist Cost-Average-nichts weiter als ein Investitions-Quote des Kapitals in noch (mehr oder weniger) regelmäßigen Abständen.

Zum Beispiel, wenn ein Investor hatte 10.000 $ zu investieren jedes Jahr dann Cost-Averaging diktieren würde die Investition 25% des (oder $ 2500) pro Quartal, oder vielleicht investieren $ 1000 zehnmal im Jahr, wenn jemand wollte, Mikro-Management ihrer Investitionen mehr aktiv .

Die (bescheidene) Theorie hinter Cost-Averaging ist, dass wir nicht so tun zu können, aus-klug (oder Out-Vermutung) der Markt - offensichtlich eine sehr kluge Vorgehen heute. Durch die Investition gleiche Mengen an Kapital in regelmäßigen Abständen, ob wir glücklich sind und geschehen zu kaufen, wenn die Preise relativ niedrig sind, dann werden wir erhalten eine größere Menge zu diesem günstigen Preis. Umgekehrt, wenn wir das Pech, zu kaufen, wenn die Preise relativ hoch sind, dann kaufen wir eine reduzierte Menge an diesem (ungünstige) Preis.

Wir erkennen an, dass dabei unsere Kaufentscheidung bei "der perfekte Zeitpunkt" nicht möglich ist, auf jede Art von konsistenten Basis. Also haben wir stattdessen übernehmen die konservative (und bescheiden) Strategie der regelmäßig den Kauf eines wenig in einer Zeit, wissend, dass (basierend auf dem Gesetz des Durchschnitts), dass zumindest manchmal werden wir unsere Kauf nur zur richtigen Zeit zu tun...

Volle Kommentar: http://translate.google.com/tr…es-of-the-humble-investor

The Dangers of Ideology

Labels and dogma sabotage communication, and thus they sabotage understanding. However these mental short-cuts undermine our intellects and analysis in very different manners. Any/every label is a simplistic representation of what it portrays, with the exception of totally generic labels/nouns.

As a general example, if someone saw me walking through a crowd of people they might label me “that tall man”, or “that bald man”. Either label doesn’t come remotely close to identifying what I’m all about as a person. However, if someone were to label me a capitalist or a communist, they have engaged in a very different type of simplification.

They have attached a discrete set of intellectual properties/qualities to me. Some of these properties may be accurate, all of them could be accurate, or none of them could be applicable. Because these traits are not tangible, it is impossible to discern if that label is partially correct, entirely correct, or totally inapplicable. Thus as soon as we begin to introduce such labels into any discussion we immediately “muddy the waters” intellectually, and undermine any message or analysis we are attempting to convey.

Dogma is an entirely different form of intellectual sabotage: it is a mental straitjacket. Dogma is nothing more than a “one size fits all” form of thinking, and thus rarely offers any insights into any analytical activity – as once again we are dealing with simplistic thinking.

In a recent commentary I dissected a particularly abused piece of economic dogma: “free trade”. I pointed out that this phrase (or label) was continually tossed around by one economic ideologue after another. While I had numerous criticisms of the zealots preaching this dogma, the most obvious one was that nothing close to “free trade” has ever existed in our global economy...

Full commentary: http://www.bullionbullscanada.…3-the-dangers-of-ideology

Credit Default Swap Fraud Exposed/Confirmed

One of the most poorly kept secrets in Wall Street’s empire of fraud was that credit default swaps were never anything but pretend-insurance. The credit default swap market is a $60+ trillion paper Ponzi-scheme. The Wall Street crime syndicate claiming to “back” this insurance have nothing more than a few $billion of liquidity apiece. It is a fact of arithmetic that these fraud-factories never intended to honour these contracts.

Given the magnitude of this fraud and the audacity of the perpetrators, this alone is reason enough to abolish the Wall Street fraud-factories, abolish the credit default swaps market, and (indeed) to abolish the entire derivatives market – so that the banksters cannot perpetrate a similar crime again in the future. Indeed, credit default swaps were banned in th U.S. for many decades, based upon anti-gambling statutes.

However the CDS fraud itself only scratches the surface on the monstrous evil behind this scheme. As I have written about frequently in the past, the CDS fraud is a tool which the banksters have used to perpetrate an even greater crime: the sabotage and/or destruction of most of Europe’s debt markets.

Here is how this particular Wall Street scam operates. First of all the banksters pile on massive shorting with respect to the credit default swaps of a particular European debt-market. This drives the prices of credit default swaps sky-high. Meanwhile, the banksters’ accomplices in the mainstream media then all perform their best impersonation of Chicken Little: “the sky is falling on Greece’s economy.” At this point the third partner of this illegitimate tag-team chimes in: the ratings agencies. Based on nothing more than changes in credit default swap prices and media rhetoric, the ratings agencies downgrade the debt of these Euro markets – immediately driving interest rates higher.

This significantly raises the interest payments on these debtor economies, instantly making those economies less solvent. This is then followed by another shorting operation in the credit default swap market, more media rhetoric, and more bogus “downgrades”. And thus the perfect vicious-circle of crime is established. Through the fraudulent manipulation of Europe’s debt markets, Wall Street’s economic terrorists have been able to drive Greek interest rates as much as 50 times higher than U.S. interest rates, despite the fact that the U.S. economy is more fundamentally insolvent than that of Greece...

Full commentary: http://www.bullionbullscanada.…ap-fraud-exposedconfirmed

Bernanke’s B.S. Bludgeons Bullion

Gold and silver prices plummet because the U.S. economy is so healthy that the Federal Reserve won’t have to print any more money, and so there won’t be any more inflation. Lol! While it made good fiction for the mainstream pablum-dispensers, it certainly has no connection whatsoever with the real world.

The U.S. economy is “healthy”? As I have pointed out on previous occasions, 0% interest rates are nothing less than an economic defibrillator – a (temporary) desperation measure to attempt to breathe life into a dying economy. Permanent 0% interest rates simply mean that economy is already dead, as we have seen with Japan. All that remains to be done is to put these zombie-economies out of their misery, through debt-default followed by massive restructuring.

As I have stressed in my recent commentaries, it is also beyond absurd for B.S. Bernanke to pretend that the Federal Reserve has ceased its money-printing orgy. The gravity-defying U.S. Treasuries market provides conclusive, mathematical proof that such a claim is tantamount to an admission of massive fraud.

Maximum bond prices at a time of maximum supply defies every economic principle in the books. Maximum bond prices at a time of maximum supply, when the largest buyer (China) has been selling Treasuries for more than a year, when the “economic surpluses” which financed Treasuries-buying have nearly vanished, when Treasuries auctions have been rigged so that no one knows who the buyers are, and at a time when the U.S. economy is obviously and hopelessly insolvent defies legality.

Someone, somehow is financing the totally opaque purchases of $trillions in U.S. Treasuries, and the list of suspects is rather short: the Federal Reserve. If the Fed is not financing those purchases with its officially/legitimately created funny-money then in must be doing so in some less-than-legitimate manner...

Full commentary: http://www.bullionbullscanada.…nkes-bs-bludgeons-bullion

The Gambler Economy

In a recent commentary I pointed out how ordinary investors were being “forced” to funnel most/all of their savings into precious metals – due to the lack of any rational alternatives. I pointed out how ordinary people were being denied any other opportunity to “invest”, but rather were being forced by their financial advisors to become “traders” (i.e. gamblers).

I devoted the rest of that commentary to explaining how and why converting our paper currencies to gold and/or silver did not represent gambling. However, there is plenty more that can (and should) be said about our “gambler economies”, and so that will be the purpose of this effort.

As is often the case, the only way in which we can properly understand our present circumstances is by stepping back (in historical terms) to provide ourselves with the necessary context to properly comprehend these modern day parameters. The first point which must be made is that if we go back even a century, the concept of investing was almost entirely alien to the average person. Instead our markets were 100% the playgrounds (or casinos) of the wealthy.

Why was this so? In part this was a function of opportunity. A century ago ordinary people were much less sophisticated in their understanding of finances. Financial advice was reserved exclusively for the wealthy. So to some extent ordinary people were shut out of markets. However that is literally only half the story.

More importantly, ordinary people didn’t need to “invest” (i.e. gamble with) the fruits of their labours. In part this was a function of lower expectations with respect to our standard of living. A century ago we were not being continually bombarded with advertising first telling us how we “needed” an infinite number of consumer goods for a normal existence, while we were simultaneously bombarded telling us how easy/affordable it was to get credit. Thus a big part of the reason why ordinary people a century ago did not need to invest while ordinary people today are forced to invest is that today people have to find a way to pay off their debts (along with a hefty rate of interest) incurred buying a plethora of consumer goods which they never needed...

Full commentary: http://www.bullionbullscanada.…24231-the-gambler-economy

The $15 TRILLION Money-Laundering Mystery

Where did it come from? Where did it go? These are the two principal questions being framed today, after Lord James of Blackheath (a member of the UK House of Lords) unveiled documentation (and accusations) concerning a mounting of illegitimate cash: $15 trillion USD.

At the moment, only Lord James is asking these questions. However, if he gets his way there will be an official inquiry into this massive, money-laundering operation. Already, Lord James possesses documents with the signatures of people like Alan Greenspan and Timothy Geithner on them, as well as massive transfers of funds to virtually every mega-bank in the U.S. and UK.

While Lord James (himself a former banker) is holding the “paper trail” for all of this dirty money, he himself has no firm ideas about either the source of the money nor the intent of all of these massive transfers (all in the $100’s of billions) to U.S. and UK banks. Perhaps I can help him out?

Regular readers will be familiar with some of my own speculation into U.S. money-laundering (and counterfeiting of its own currency). Of interest, my own theorizing was based on a series of logical deductions which implied that some massive money-laundering operation (of counterfeit currency) must be taking place in the dying U.S. economy. And now we have a detailed paper-trail on the largest (known) money-laundering operation in history.

To refresh the memory of regular readers and to inform new readers, back on January 3rd I published a commentary titled “Maximum Fraud in U.S. Treasuries Market”. In that commentary, I outlined a series of simple-yet-obvious deductions pointing out the following facts:

1) There are (virtually) no visible buyers for U.S. Treasuries on the planet (at any price).

2) Even if there were interested buyers, there are no sources of capital available to mop-up all the $trillions in supply being dumped onto the market each year.

3) Even if there actually were interested buyers, and even if they could scrounge the $trillions to buy this worthless paper, it is utterly absurd to suggest that these buyers would pay (by far) the highest prices in history for this paper at a time of maximum supply. It defies every basic principle of supply and demand.

4) Taking this scenario from “absurd” to outright insanity, the U.S. economy has never been less solvent in its entire history. This directly implies that U.S. Treasuries should be fetching the lowest prices in history – not the highest – just like the worthless bonds being flogged by Europe’s deadbeat-debtors...

Full commentary: http://www.bullionbullscanada.…-money-laundering-mystery

The Foreclosure Fraud Fantasy

As pressure mounts on hold-out states in the U.S. to ratify a shameful deal on Wall Street mortgage-fraud, the mainstream propaganda machine continues to circulate a Big Lie as justification for this despicable sham: that a deal would help to “fix” the U.S. housing market. Not only is this wrong, but it is entirely opposite to the truth.

What the media continues to deliberately obscure is what is actually being negotiated here. You can’t ‘negotiate away’ 10’s of millions of fraud-infected mortgage documents. All that is currently being done with this “deal” is to absolve the Wall Street fraud-factories of responsibility for the this massive, deliberate, systemic fraud – which will permanently cripple the U.S. housing market.

Once a deal is done, all of the fraud will still be sitting in those mortgage documents: 10’s of millions of infected land titles, which can only be purged of their fraud through being litigated one at a time, through a U.S. court system which is already hopelessly clogged with Wall Street fraud.

By simply “sweeping under the carpet” these countless millions of acts of systemic fraud, rather than helping to fix the U.S. housing market, it guarantees decades of massive uncertainty and insecurity regarding land titles in U.S. residential real estate. Put another way, it makes title security in the U.S. grossly inferior to any/every other reputable land title system on the planet.

Until these 10’s of millions of acts of fraud are (eventually) purged from the U.S. land title registry – one by one – U.S. real estate will trade at a permanent discount in relation to all of those other real estate markets. What person in their right mind would pay full price for a piece of real estate where there is always a lingering doubt about actual, legal ownership of that piece of land?...

Full commentary: http://www.bullionbullscanada.…foreclosure-fraud-fantasy

Deadbeats ‘Bailing Out’ Deadbeats

A few weeks ago I wrote a piece noting that Western regimes had mismanaged their economies to the point of structural insolvency, and were thus now only able to forestall their own debt-defaults by resorting to “cheque-kiting”. That is, it has been many decades since most of these nations have actually been paying their bills.

Instead, Western economies have been financed by these Western governments simply writing new cheques (with nothing backing them) to cover the old cheques they wrote (which also had nothing backing them). This is cheque-kiting, pure and simple. And the only reason that these sovereign deadbeats haven’t (yet) suffered the inevitable fate of all deadbeats – having their credit refused and thus being forced into bankruptcy – is because somehow their propaganda machine has been able to prevent that realization from sinking in with the masses.

This apathy and/or lack of comprehension by the citizenry is disturbing (but no longer surprising). However, where we move past “disturbing” and into the realm of the totally absurd is when the media propagandists write about these economies being “bailed out”.

Once again, to truly illustrate this insanity we need to define our terms. A “bail out” (in the financial context) implies some entity which possesses financial assets bestowing those assets (either via gift or loan) on some entity lacking financial assets. Immediately upon engaging in this simple exercise we can state a definitive conclusion: none of these deadbeat-debtors have been “bailed out”. Indeed we can go farther than that: it is not even theoretically possible to bail out any of these deadbeats.

Why? Surely the answer speaks for itself: all Western entities are net-debtors – their “national account balance” is less than zero. Surely even the media drones and market “experts” can understand the concept that one deadbeat with no money cannot (financially) bail out another deadbeat with no money?...

Full commentary: http://www.bullionbullscanada.…ats-bailing-out-deadbeats

Exposing Silver Mythology, Part III

In Parts I and II, we were presented with a shocking perspective on the silver market. The principal record-keepers for the silver sector, and the largest single regulator of the silver market both display not only an abysmal level of ignorance concerning the silver market, but the seeming incapacity to even understand basic arithmetic operations.

The result of this display of ineptitude is that the mainstream data and analysis which reaches the market from these official and quasi-official sources has absolutely no basis in reality. It is precisely this sort of vacuous nonsense which is relied upon by mainstream silver bears when they spew their negative drivel.

And one cannot say the words “negative drivel” in connection with precious metals without immediately thinking of Kitco’s Jon Nadler – the man who has gone through a 10+ year bull market for gold without ever once stating that today was a good day to buy it. Apparently his banker biases simply run too deep. Speaking of Nadler’s biases, they were clearly on display in a recent hatchet-job on silver by the Globe & Mail which was so shoddy that it didn’t even rank as good fiction. First the context:

Some market watchers are warning that silver faces a vicious bear market that could eventually take the price to the mid-teens…

Well, we know what the silver-hater who wrote this piece thinks about the silver market. What we don’t know is what planet he is writing about, because it obviously has nothing to do with the planet Earth. The near-total depletion of inventories, and the imminent default-event which that portends, suggest nothing other than that the upward move in the price of silver has just begun...

Full commentary: http://www.bullionbullscanada.…ver-commentary&Itemid=130

Exposing Silver Mythology, Part II

In Part I, I laid out for readers the extraordinary scenario which exists in the silver market today. The individuals/entities operating the silver market; compiling data on it; and reporting on it (at least from the mainstream) display no understanding of either the general principles of markets, nor of the specific fundamentals of their own sector.

In the first part of this series I focused on analysis provided by GFMS, one of two quasi-official consultants for the silver (and gold) sector who provide the data most widely relied upon for this market. Specifically I looked at GFMS’ reporting on the silver market for the year 2002. I noted that despite the price of silver hovering near its 600-year low; despite the fact inventories had plummeted by more than 75% in little more than a decade; and despite the fact that production was currently falling; GFMS saw neither any need nor any indication of higher prices for silver. Indeed, these “experts” even mused that the price might fall further.

How utterly flawed was what GFMS passed off as “analysis”? Even after the roughly ten-fold increase in the price of silver which immediately followed this, inventories have continued to decline. Meanwhile the silver sector itself remains so depressed that even after this massive surge in the price, silver miners have been unable to increase production by more than a percent or two each year. In short, GFMS has displayed zero comprehension of this market, and the fundamentals which comprise it.

This brings us to the official regulator of the ‘rigged casino’ known as the Comex silver futures market: the CFTC. As with GFMS, the CFTC claims unrivaled expertise but displays nothing but ignorance and ineptitude. In 2004, the CFTC dared a rare response to the ongoing accusations of “manipulation” in this market. To the CFTC’s credit, it almost managed to competently frame the issues:...

Full commentary: http://www.bullionbullscanada.…ver-commentary&Itemid=130

Exposing Silver Mythology, Part I

Advanced economic analysis involves high-level mathematics at least as complex as the realms of physics or engineering, accompanied by equally convoluted jargon. As a result, it is virtually incomprehensible to the ordinary person.

Conversely, the basic principles of economics are very straightforward. Indeed they could be summarized as little more than a combination of common sense and simple arithmetic. As a result, fundamental economic analysis is highly accessible to the ordinary person – because of its relative simplicity.

What then are we to make of the fact that the self-described (mainstream) “experts” on the silver market; the quasi-official sources for data on the silver market; and the primary regulator of the silver market all regularly and consistently demonstrate complete ignorance of even the most elementary of economic principles? Are we to attribute this to gross incompetence, inherent bias, or an intentional attempt to deceive?

I will leave it up to readers to reach their own conclusions. This piece will simply lay out the positions of these individuals and entities (past and present), lay out what little reliable data is available to us; and then apply the simple, common sense principles of economics to this data. It will focus on the three most basic aspects of any market: supply, demand, and inventories.

First, however, I will refer readers to some previous, elementary economic analysis. As I established with simple numbers (and logic), in any market shorting always “consumes” while investing always “conserves”. In other words, in any market which is dominated by shorting we will see a substantial increase in consumption, and (over time) a radical decline in inventories/stockpiles. On the other hand, in any market dominated by investors (who are invariably mis-labeled as “speculators”), we will see consumption decline and inventories swell – due to the rising prices generated by increased investor-buying.

Meanwhile, the entities/individuals mentioned previously do not merely regularly engage in analysis which is wildly erroneous, but in many cases is totally perverse. It is with respect to this last point where it becomes more difficult to ascribe this behavior to mere incompetence and rather more likely that there is some degree of malice involved...

Full commentary: http://www.bullionbullscanada.…ver-commentary&Itemid=130

The ‘Perils’ of a Gold Standard?

Among my own list of “pet peeves”, near the very top are systemic flaws in analysis. Put another way, I am infuriated by seeing analytical mistakes which “everyone” makes, because when the supposed “experts” in our society insist on repeating flawed analysis again and again they teach flawed thinking to those exposed to this defective logic.

At the top of the list of “mistakes made by everyone” is the complete incapacity of commentators (in virtually all fields) to properly analyze the analytical principle known as “causation”. One could write an entire book on this one subject, because there are so many different variations of this flawed analysis.

I will focus on a single example – the inability to distinguish between “causation” and “correlation” – for two reasons. First of all this is (by far) the single largest category of flawed analysis on the subject of causation and because it is essential to understand this distinction/principle in order to debunk one of the central myths which has been perpetuated about a “gold standard”.

Let’s begin with the general principle. The reason why virtually no one in our society engages in competent causation analysis is because this term is so poorly understood. To illustrate this defect in thinking (as always) we must start with definition of terms. Sadly few analysts have more than a vague understanding of the word “correlation”. Once one understands this term/principle correctly it becomes much harder to continue to make the same mistakes in causation analysis.

A correlation is nothing more than the simultaneous occurrence of two events. In short, correlation suggests nothing more than “coincidence”, and (most particularly) correlation implies nothing about causation. To comprehend this, I must repeat one of the earliest lessons I learned while studying economics.

To illustrate the complete absence of any connection between correlation and causation, economists provide the example of the “high correlation” between economic booms and sunspot activity. The “joke” among economists (who aren’t exactly the wittiest group) is that economists are still trying to determine whether economic booms “cause” sunspots; or whether sunspots “cause” economic booms...

Full commentary: http://www.bullionbullscanada.…old-commentary&Itemid=131

Gold/Silver Price Ratio Getting Silly Again

Arithmetic is a harsh mistress. Irrespective of how badly the banking cabal wishes to suppress the prices of gold and silver, and irrespective of how much brute force they are able to apply to the market over the short term with their (illegal) manipulations; the inexorable pull of supply and demand will inevitably overwhelm any/all such operations.

This is not the whimsical theory of some ivory-tower economist, but a simple fact of markets which has been demonstrated to us all in totally unequivocal parameters. Thus back in the “bad, old days” of manipulation – when the banksters still had large hoards of bullion to dump onto the market and crush the price – the price of silver was pushed to a 600-year low (in real dollars). What did the extreme manipulation of the silver market in the 1990’s reap for the banksters? A 1,000% increase in the price of silver over the following decade.

[chart available with original link]

The misunderstanding of most novice investors in this sector (and a source of tremendous frustration) is that these short-term episodes of manipulation somehow delay (or even prevent) gold and silver prices from reaching their “maximum” levels. In fact the precise opposite is the truth: each and every manipulation operation translates to even higher long-term prices for gold and silver. It’s all just simple arithmetic.

Perhaps the easiest way to illustrate these dynamics is through comparing the gold market and the silver market. While both of these markets have been subjected to extreme manipulation, it is clear that manipulation of the silver market has been much more severe. There are two related numbers which illustrate this point.

Knowledgeable investors know that the long-term price ratio of gold versus silver (i.e. over roughly 5,000 years) has averaged approximately 15:1. This closely coincides with the ratio of the natural occurrence of these two elements in the Earth’s crust (approximately 17:1). Not only did this price ratio remain relatively constant over several millennia, but the fact that the price ratio so closely mirrors the rate of occurrence of the two metals shows that (in relative terms) our species has demonstrated a roughly equal preference for the two metals throughout recorded history.

These facts establish beyond any possible contradiction that over the medium or long term the price of silver must remain at close to a 15:1 ratio versus the price of gold. There is only one factor which could alter this arithmetic: if our preference toward the two metals changed. Has any such change in preferences occurred? Yes. Silver has become much more popular...

Full commentary: http://www.bullionbullscanada.…ver-commentary&Itemid=130

When ‘Statistics’ Become Gibberish

This is a topic which was pushed to the back-burner in favor of larger, more important news items. However, it is an important issue to cover since it perfectly symbolizes the trend away from providing informative data and toward ever more mindless propaganda.

Case in point is a new “statistic” which Bloomberg felt compelled to trumpet a couple of weeks ago: the Citigroup Surprise Index. Even before I learned what this propaganda tool was supposed to represent I had to laugh. Given the endless, serial-fraud from Wall Street, I couldn’t help noting that a “Citigroup Surprise” sounded like the sort of sickening discovery that MF Global’s clients made the morning after discovering that roughly $1 billion of their funds had been plundered by unscrupulous banksters.

In fact, however, the Citigroup Surprise Index is not some “thermometer” providing us with data on the current level of Wall Street thievery. Rather, it is something much more absurd: a measurement of how often the U.S.’s blatantly fraudulent economic statistics “beat expectations”.

One could easily write several chapters mocking this utter nonsense, but hopefully I can expose this “Idiot Index” for the vacuous drivel that it is in much less time. The fundamental criticism of this silliness is that it obviously has no meaning whatsoever, or more specifically it could be interpreted to mean anything.

The propagandists claim that when the Citigroup Surprise Index shows that the official statistics “beat expectations” on a regular basis that this is good news. There is absolutely no logical validity in such a conclusion...

Full commentary: http://www.bullionbullscanada.…:us-commentary&Itemid=132

Zitat von buddhalf

bullionbulls
thanks a lot for your contribution, amazing how the modern mechanics of our ponzi scheme aka financial system work.

As a supplement here some other news from the world of fraud:

Es ist eigtl. immer wieder u n g l a u b l i c h wie der Rechtsstaat sich auflöst, am hellichten Tag.

http://www.youtube.com/watch?v=N_AuvLTJN?player_embedded

Alles anzeigen

Danke for the link Buddhalf! I'll listen to it as soon as I have a few spare minutes.

As one of the few HONEST experts in the U.S. on the serial fraud committed by Wall Street, he was one of the first sources I latched onto when I was learning about the bankers' misdeeds myself.

Even if I don't learn anything new from this particular clip, Black is ALWAYS good for some juicy quotes... (lol)

Maximum Fraud in U.S. Treasuries Market

Spending as much time as I do writing about the Land of Fraud, I never thought I would see myself using the phrase “maximum fraud” to describe any U.S. market. Each time I thought I had witnessed the apex of human fraud, within a matter of weeks or perhaps months I would witness some even more extreme outrage.

One should never underestimate Federal Reserve Chairman B.S. Bernanke, however, when the subject turns to fraud and deceit. This is the same man who told the world (day after day) that the U.S. had a “Goldilocks economy”, where U.S. markets and house prices would keep going up forever – at the very peak of the made-in-Wall-Street U.S. housing bubble. This is the same man who then promised the world (again and again) that the U.S. economy would experience a “soft landing” after that gigantic bubble had already burst. This is the same man who has announced more “exit strategies” than Harry Houdini – with not one of them ever materializing.

Yet even the infamous “Helicopter Ben” Bernanke has outdone himself with his latest operations in the U.S. Treasuries market. For those who missed the news, foreign central banks (the largest holders of U.S. Treasuries) have been frantically dumping more Treasuries onto the market over the past four weeks than at any other time in U.S. history.

Those with even the tiniest understanding of supply/demand fundamentals understand how markets operate in such situations. When there is a sudden explosion of supply, the price buyers are willing to pay for that good plummets until enough new buyers enter the market to soak-up all of that excess supply.

So how far have U.S. Treasuries prices fallen during this “panic” in the U.S. Treasuries market? Zero. To comprehend the absolute absurdity of this situation requires adding one more piece of data to our scenario: U.S. Treasuries prices are currently at their highest level in history – despite the fact that the United States has never been less solvent.

Readers need to realize how a bond market works. Prices and yields (i.e. interest rates) move in a precisely opposite/inverse manner to each other. As yield goes up, bond prices decline in a precisely proportional manner (and vice versa). Given that yield is (supposedly) a function of risk, with the U.S. economy being less solvent than at any other time in history, this implies record-low prices for U.S. Treasuries – not all-time highs...

Full commentary: http://www.bullionbullscanada.…:us-commentary&Itemid=132

How The Bankers Drive Up Bullion Prices, Part II

In Part I, I observed that if we really wanted to understand how the short-term manipulation/suppression of the gold and silver markets leads to even higher longer term prices we needed to focus on the relentless attacks by the bankers against the miners.

I explained why the bankers have such a pathological hatred toward the miners:

1) Higher valuations for the miners are seen as a bullish “buy” signal for the sector as a whole.

2) Gold and silver miners are certain to decouple (to the upside) from all other classes of equities.

However, by suppressing the share prices of the miners even more ruthlessly than they suppress the bullion market itself, the bankers are not only ensuring even higher long-term bullion prices but ultimately better/higher valuations for the miners as well.

The mechanics of this progression are yet another illustration of the “irresistible force” represented by the principals of supply and demand. I was tempted to include a chart of bullion prices versus miner share prices. Unfortunately, the only proxies available for miner share prices are one of the miner indices: either the HUI or XAU. However, those indices are dominated by the larger cap miners, and more importantly are comprised almost entirely of producers.

This distorts our picture of the gold and silver miners in several respects. First of all these companies at the top of the “food chain” represent only a tiny minority of the total number of gold (and silver) miners. Secondly they understate the level of suppression taking place, since whenever these troughs in the sector occur the junior miners are punished much more severely in markets than the larger-cap companies...

Full commentary: http://www.bullionbullscanada.…old-commentary&Itemid=131

How The Bankers Drive Up Bullion Prices, Part I

Regular readers are excused for being confused by this title, or perhaps even suspecting a misprint. After all, having written numerous commentaries documenting the activities of the bullion banks in suppressing bullion prices, at first glance the title appears nothing less than perverse.

At the same time, I have previously observed that what the banksters are able to accomplish in depressing prices over the short-term must lead to a boomerang higher in prices over the longer term. In our markets we see yet another example of the principles of economics mirroring the laws of physics: for every action, there is an equal and opposite reaction.

There is a particular reason for me to raise this issue at this particular time. While the predatory actions of the bankers in the bullion market are frequently highlighted by precious metals commentators, much less often discussed is the even more rabid suppression of the gold and silver miners.

To understand why the bankers are terrified of seeing gold and silver miners valued at fair multiples, we must first understand what those rational valuations imply. First of all as I have explained in previous commentaries, commodity producers provide natural leverage on the price of the commodity they produce (for better or worse). A rising price makes these companies more profitable in multiples of the increase in the price of the commodity, and similarly decreasing prices exert a greater than 1:1 impact on the way down as well.

Thus with gold prices having risen by roughly a factor of six from their absolute bottom, and silver prices having risen by roughly a factor of ten; we should see these miners sporting fantastic valuations to reflect their record (and rising) profitability. In reality, at current valuations many of these miners have not even matched the rate of increase in bullion prices – and in fact there are plenty of actual laggards.

Because of the fact that commodity-producers provide natural leverage on the price of the commodity they produce, rising prices for the producers are seen as a bullish indicator for the sector. Immediately we see the primary basis for the bankers’ hatred of the miners: allowing them to rise to their fair market value would be like a neon sign for investors, highlighting the stellar returns from investing in gold and/or silver...

Full commentary: http://www.bullionbullscanada.…old-commentary&Itemid=131

The Land of Anti-Gold Propaganda

When it comes to “realms of fantasy”, the title to this commentary doesn’t flow nearly as smoothly from the lips as “The Land of Oz”. However, the two fantasy realms share so much in common that I felt somewhat compelled to use this allegory.

To begin with, in both realms we regularly witness the most fantastic events; events not even slightly constrained by the laws of science (or economics) or simple common sense. Illustrating this concept beautifully is another piece of gibberish churned out by the anti-gold propaganda mill.

“Gold posts weekly loss as EU jitters boost dollar”, reads the title; immediately identifying this piece as more nonsensical propaganda. As I have noted in many previous commentaries, all of our governments have declared us to be living in a world of “competitive devaluation”: where our governments “compete” to see who can destroy the value of their banker-paper the fastest.

In such a world it is absolute nonsense to talk of any currency being “boosted” – easily illustrated with a simple analogy. Two people jump off a 100-storey building at the same time. On the way down, one person climbs on top of the shoulders of the other. Obviously the dominant fact of this hypothetical example is not that one person has “boosted” himself, but merely that he will go “splat” on the pavement a millisecond later.

This is a constant illusion from the propaganda machine, because it is their chief means of deception in delaying hyperinflation – i.e. the final collapse of the paper currencies and the reassertion of “good money” (gold and/or silver). Being in the final death-throes of the collapse of yet another paper-currency Ponzi scheme, competitive devaluation is the perfect bankster smoke-screen.

Getting all governments to devalue their currencies simultaneously is the most effective means to hide the total destruction of our currencies from the near-comatose sheep. Returning to the analogy of two people jumping off a tall building, to each other neither appears to be moving – or at the very least it drastically reduces their perception of the speed at which both are falling.

It is only those who are standing on the ground who are capable of perceiving how fast the two jumpers are plummeting. However, in an era of competitive devaluation, then by definition there is no one “standing on the ground”; we are all falling – together...

Full commentary: http://www.bullionbullscanada.…old-commentary&Itemid=131