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Dang!

I was hoping to have a “quietish” morning free of the usual dose of “horrible headlines,” but the early trickle as usual turned to a rapid outpouring in the last few hours.  For PM investors angered and disgusted at this week’s pre-options expiration action, have no fear, as options expiration is TODAY.

In Thursday’s RANT, “TOP-CALLING FALLACIES,” I presented data stating that contrary to prior years, options expiration has NOT been a major event in the Precious Metals markets during 2011.  Irrespective, I noted that with the European crisis threatening to implode the GLOBAL economic system, “all bets are off” related to historical market manipulation strategies.  The Cartel moved to a higher plateau of intensity a year ago, on “D-Day” (the first day they showed FEAR of an imminent PM MELT-UP), and the PPT similarly upped its game THE DAY AFTER LABOR DAY this year, when it DESPERATELY sought to reverse the well-deserved market carnage from August.

It has been painful dealing with not just September’s PM DEATH STAR attacks, but this month’s renewed suppressions, particularly given the MASSIVELY gold-positive nature of worldwide news flow.  However, the fact remains that the CARTEL/PPT are LOSING!  Gold was $1,620 in early August, compared to $1,690 today, while nearly ALL Western BANK stocks are at or near new lows.  Yes, the Dow is roughly flat, but the companies that MATTER most to the PPT are floundering badly, such as Bank of America, America’s largest bank, soon-to-be non-marginable (when it falls below $5/share), and subsequently, bailed out or bankrupted despite the piddling investment of scum-of-the-earth Warren Buffett.

Anyhow, PMs were walloped this past week, and whether the reason was options expiration or pure suppression in the face of the imploding European financial situation matters not.  If you own PHYSICAL gold and silver, this past week’s shenanigans are meaningless, as your metal isn’t going anywhere, and likely never will.  If you have been considering ownership, good golly you’ve been given an opportunity to buy at lower levels and, more importantly, at a time when supply is available and delivery times short.  As I RANTED about several weeks ago, PM buyers move like a herd of cattle, and once they decide it’s time to buy PHYSICAL gold and silver, premiums and delivery wait times can spike up VERY rapidly.  I cannot emphasize enough how important it is to POUNCE on opportunities like this, as the LAST thing you want to deal with is buying in an evaporating market.

Gold Falls Again on Options Expiry -Supported by Global Debt Crisis & Iranian Oil Jitters

To wit, the investment world is still in the phase where it is willing to believe, and WANTS to believe, gold is in a bubble.  They WANT to believe “all’s well,” that the past three years, and particularly the past three months, was just a bad dream, which can and will end momentarily.  They refuse to realize gold and silver are DESTROYING all other asset classes this year DESPITE massive Cartel attacks in January, March, May, September, and now November, or that PMs have risen for eleven straight years.  Such universal bearishness in the face of raging fundamentals and long-term technicals, and stellar DECADE-LONG performance, should hint just how powerful the bull will become once the 99% of the population that DO NOT own gold and silver decide they MUST, at ANY COST!

So WAIT, gold is NOT outperforming stocks 23% YTD?

Who knows what will wake them up?  I don’t know, but the list of potential “black swans” is as long as my “horrible headlines,” and getting longer by the day.  Perhaps an Italian debt default, another MF Global fiasco, or perhaps….a major offering by the Sprott Physical Silver Trust, which quietly filed a $1.5 BILLION shelf offering last week.

Sprott PHYSICAL SILVER Trust files SHELF

A year ago, PSLV completed its $575 million IPO at $10/share, and once this prospectus is approved, the fund’s management (Eric Sprott) will have the option to sell receipts backed by up to $1.5 BILLION worth of PHYSICAL silver to investors, overnight.  As you can see, last year’s PSLV IPO, which occurred concurrently with an offering from sister PM closed-end fund Central Fund of Canada (CEF), presaged the silver price surge that caused the Cartel to resort to its “D-Day” tactics on November 9, 2010.

Alternatively, how about an unprecedented surge in Indian gold buying, given that we are amidst the seasonally strongest buying period and the price of gold, in RUPEES, recently touched an ALL-TIME HIGH.  As noted in numerous RANTS in recent months, U.S. investors need to cease being so secular in their view of the world.  America is NOT the only country on earth, and the dollar NOT the only currency.  It may be the “world’s reserve currency” (for now), but the majority of the world uses other forms of money (all fiat, of course), and at the moment the Indian Rupee is in freefall, down 18% in the past six months alone.  The cumulative effect of MASSIVE, GLOBAL money printing and “quantitative easing” has wreaked HAVOC on foreign exchange rates, with many second-tier currencies, such as the rupee, the Mexican peso, the Brazilian real, and the South Korean won, experiencing massive declines versus the dollar, and thus surging local inflation rates.

Indian Rupee Falls to All-Time Low Against U.S. Dollar

Or, how about a resurgence of “Arab spring,” given that EGYPT MELTDOWN II appears to have commenced…

EGYPT’S cabinet RESIGNS amid WIDENING PROTESTS

…or, a catastrophic “event” in Iran, where essentially all of America’s puppet governments appear to be inciting that nation’s volatile, America-hating President, Mahmoud Ahmadinejad.

Sarkozy Reminds Market Of Geopolitics, Says Iran Nuclear Program “Serious And Urgent Threat”

OK, let me quickly get through today’s European horror stories so I can get to the subject of today’s RANT, the good ol’ US of A.  Not that these headlines are any less horrible if I discuss them briefly, but some days I just need a break!  Let’s face it, the PIFIGS are goners, as is the entire Euro Zone and Euro currency, it’s only a matter of when.  And frankly, I don’t believe it will survive through 2012, if you want the honest RANTING ANDY opinion.

Essentially, the article below explains all.  NOTHING has been fixed, and EVERYTHING exponentially worsens each week, and will continue to do so until the END GAME commences.  The European populace and “leaders” alike are silently praying something positive will happen; but like a “watch pot,” nothing is boiling.   Of course, in this case, the watch pot doesn’t even have a flame under it.

Waiting to Exhale – Desperate PLEAS for ECB to DO SOMETHING

Across Europe, interest and CDS rates are soaring to new highs, while bank stocks conversely plummet to new lows.  The debt contagion is growing more virulent, yielding runs on the largest banks, such as Commerzbank, the second largest bank in Germany…

Commerzbank Monkeyhammered On INSOLVENCY Concerns

…the largest insurance companies…

Scramble From European Insurers ACCELERATES

…and the largest sovereign nations…

Spain Election And Benchmark Switch DUDS, As Country Pays Record Yield In Bill Auction

Spanish Yield Curve INVERTS most since 1994

Speaking of Spain, I learned a STARTLING fact today about the land of tapas and bullfights.  Thanks to its gargantuan housing mania and crash, Spain is now MORE INDEBTED than Italy, which itself is the world’s third most indebted nation, trailing only the U.S. and Japan.  Yes, Spainophiles, if you add together all debts (government, corporate, financial institution, and household), Spain has MUCH MORE debt than Italy!

And given that Europe is tied at the hip, with Italian GDP plummeting into the nether regions, you can bet that EVERYTHING we have experienced in the past month with Italy is about to be repeated in Spain.

To finish the thought, let’s see which European nations are most exposed to the coming Spanish debt implosion.  And whattya now, it’s those two stalwarts of fiscal “conservativism,” FRANCE and GERMANY.  Just wait and see readers; the German people will be shrieking in fear at ANY mention of further German involvement in the Euro Zone, and my bet is a German exit from the Euro is as likely to happen in 2012 as a Greek expulsion.

Now that the European dirty laundry is cleaned up, and PAPER gold successfully capped YET AGAIN at the ROUND NUMBER $1,700 just hours before options expiration, not to mention at EXACTLY the PM FIX at 10:00 AM EST, as usual, let’s move on to the topic of this RANT.

I titled it “BACK IN THE USSA” as a satire on the classic Beatles song, but also the not-so-subtle reference that America, which for decades proclaimed its hatred of “the Red Menace,” has in just a decade morphed from the world’s most open, capitalistic economy to one combining the worst aspects of socialism, fascism, and yes, the dreaded “C-word,” COMMUNISM.

There is no need to rehash the TOMES of data from prior RANTS regarding how low the American political system has sunk in its quest to “save us from ourselves,” or better put, take everything from us in the name of “national security.”  Famous last words from numerous murdering, totalitarian regimes throughout history, by the way.  However, I want to put the U.S. back into the spotlight today, as it deserves given that it has the MOST DEBT IN GLOBAL HISTORY, growing at the rate of $1 TRILLION per quarter and getting set to accelerate upward in 2012.

Europe is currently hogging the headlines, and may do so for some time given that the Euro Zone could break up any day now, but that doesn’t make it’s situation any worse than the granddaddy of global irresponsibility and profligacy, America.  As far as I’m concerned, the only things separating Europe from the U.S. are the facts that 1) Europe does not have the global reserve currency (and thus cannot print its way out of debt), and 2) it is comprised of 27 disparate governments with their own languages, economies, and even bonds.  Yes, I have written countless times about how the U.S. is far less homogenous than most people think (I expect numerous States to secede in the coming years), but the level of heterogeneity is far greater in Europe, where each nation in the Euro Zone is SOVEREIGN, as opposed to the U.S. states, which are all SUBORDINATE to the Federal government.

Nevertheless, American SOVEREIGNTY, too, will be challenged in the coming years when the world finally accepts the REALITY it cannot pay off its debts.  This acceptance will be the most difficult of all to accept, given that nearly all countries hold DOLLARS as their reserve assets, and thus keep a blind eye to U.S. problems whenever possible, just as they consciously, and unconsciously, ignore what gold is telling them.

In my view, 2011 America is the GREATEST FINANCIAL CATASTROPHE IN HUMAN HISTORY, soon to be unleashed on the world in DEATH STAR fashion.  The “Super Committee” fiasco is icing on the cake, a key inflection point reflecting the exact date when the world starts to recognize the U.S. is bankrupt.  Not only did American politicians destroy the nation with heinous fiscal, monetary, and trade policies, but they didn’t even attempt to cooperate in the eleventh hour, where even a semblance of bipartisanship might buy a bit more time.

Super Committee Says It’s Unable to Agree on Debt Reduction Deal

Even better, I’m about to reveal yet another BAZOOKA that will blow away even the most Pollyana-ish government apologists.  I just looked into the details of the supposed “automatic cuts” scheduled to kick in due to failure of the Super Committee…you know, the cuts that don’t even commence until 2013, AFTER the next presidential election.

And look at this, 18 percent of the automatic savings are assumed to come from interest costs the government would save from reducing the debt!   In other words, if the Super Committee fails completely, out of the $1.2 trillion in automatic savings, $216 billion would be assumed interest savings!

HUH?  With interest rates at record lows, and thus having only one way to rise – UP, particularly following failure to even put a dent in the nation’s EXPLODING debt and deficits, the government is ASSUMING INTEREST RATE SAVINGS in the coming years?   AAAAAAAAAAAAAAAAAAAHHHHHHHHHHHHHHHHH, PUT ON THE STRAIGHT JACKET, RANTING ANDY HAS OFFICIALLY SNAPPED.

Moreover, such “interest savings” are predicated on an improving economy, which in turn would generate additional tax revenues to pay down debt.   So much for that, as 3Q GDP was just dramatically revised downward, AS I SAID IT WOULD BE.  Amazing how the “Wall Street Economists” were assuming 2.5%, but I said it would be 2.0% or lower with absolutely no statistical models to work with, just plain old common sense.  Of course, if the REAL inflation rate were utilized in the GDP calculation, U.S. output would look a lot like the Italian chart above.  But why quibble about 4%-5% of GDP here and there?

Revised Q3 GDP Drops By 20% To 2.0%

And true to form, S&P didn’t downgrade the U.S. after yesterday’s Super Committee failure announcement, even though the announcement fit EXACTLY the criteria they wrote of in August determining why they would downgrade again.  Of course, S&P was practically tarred and feathered following the August downgrade by the U.S. government, which had the gall to tell S&P their math was wrong, before forcing its CEO to resign with a figurative gun to his head.  Moody’s and Fitch, frozen in fear at the thought of being tortured or killed themselves, conveniently left their ratings at AAA, and have been curiously quiet this week.  They are the first to SCREAM how Italy and Greece must be downgraded, but facing the “leaders” of the Nazi States of America, they suddenly become blind, deaf, and dumb (emphasis on dumb).

S&P says NO CUT PLANNED in US credit rating

And don’t expect the PAIN to let up any time soon in “the world’s greatest superpower,” which will shortly be front and center with its financial implosion, which by the way is tied by the hip to Europe as well (can you say Morgan Stanley?).  It shouldn’t be long before Helicopter Ben comes up with some new Greenspan-speak to explain why he is doing QE3, while vehemently claiming it is not really MONEY-PRINTING – count on it, and count on it SOON!

Not only do major U.S. banks face myriad death knells from the collapsing real estate market, imploding economy, and massive exposure to European debt, but they OWE TENS OF BILLIONS in TARP-like bailout repayments, NOW!  And look who owes $7.5 billion THIS MONTH, JP MORGAN.

$52.5 BILLION of virtually free U.S. bank DEBT DUE NEXT MONTH

Before I conclude, I need to point out YET AGAIN why EVERYONE that attempts to invest in the stock market will be DESTROYED, whether they are long, short, straddled, “hedged,” or otherwise.  I cannot SCREAM this loud enough – the STOCK MARKET is DEAD, with the GOVERNMENT and HFT ALGORITHM PROGRAMS accounting for nearly all the volume, with just two goals – to STEAL YOUR MONEY with every illegal trick possible, and influence PERCEPTION by keeping the 30 bleeping Dow stocks from imploding.

Unfortunately, individuals do not have a personal PPT team, but instead an AAPIT, or ASSURED ACCOUNT PLUNGE TEAM, which I will lovably call ARMPIT.

Margin Debt SOARS, most since June 2007, just in time for NOVEMBER ROUT

Readers, you are running out of time to PROTECT YOURSELF, as once the U.S. economy and financial system is back in the media crosshairs, CHAOS will rapidly ensue.  Buying PHYSICAL gold and silver will become much more difficult once the $2,000/oz and $50/oz are breached for good, and NOTHING will compare to the frenzy to buy PHYSICAL metal during a FEAR-based buying frenzy.  And I mean NOTHING!

Moreover, store shelves could quickly empty during times of extreme crisis, and given the irreparable damage to the futures markets done by government manipulation, unfathomable Wall Street leverage, and the loss of CONFIDENCE resulting from the MF Global fraud, don’t be surprised if such events unfold far more rapidly than most can imagine.

PROTECT YOURSELF, and do it NOW!