Loading ...Hope Bill Murphy doesent mind…but here is a good portion of his stuff tonite….Midas is Da Man
It was a wild one, so infuriating to gold/silver investors, yet so gratifying to have the world get a glimpse of what many of us on Planet GATA have noticed, and pounded the table on, for years. The US financial markets are one big rig job and evolved into anything but free markets. Stalin would be cheering on the rich and powerful in New York and Washington. The Orwellians would be jumping up and down with joy at what is taking place, etc.
It’s gratifying because the more investors know what GATA knows, the sooner they will pile into gold, sending the price to the moon. It’s that simple.
So is what is going on and why. No sense to repeat the specifics on who is manipulating the US markets. You got that info yesterday and for the past zillion MIDAS commentaries. However, to follow the simple analysis theme, we only need to refer to the action of the DOW and gold again, the two most widely watched barometers of US financial market and economic health. Simply put, the DOW is the positive barometer, gold the negative one, for Planet Wall Street. As we have seen of late, the US economic news can be terrible, as it has been for months, but when the DOW soars, as it did last week, the pundits on CNBC come out with their “Everything is fine” bit … “if things were not actually good behind the scenes, the Dow would not be behaving so well.” Thus, the DOW must be propped up at all times when it appears ready to really tank, or is in the process of collapsing. On the other hand, when the price of gold soars, the cries are that something is very wrong in the US financial market world … meaning too much inflation, notice of the dollar collapsing, or growing fear of a developing financial crisis. All bad for Planet Wall Street. Thus, the price of gold, the badness barometer, must be artificially suppressed.
That’s the game. We have known the drill for a long time. Others are beginning to catch on.
When we left off late yesterday afternoon, the DOW had crashed nearly 300 points, so gold was smashed $15 off its Comex close in the Access Market. It did not take long for THE GANG to react and come up with a plan to make “Everything fine” again…
18:24 (Tuesday) CNBC’s Steve Liesman reports that a Fed source says the Fed is considering actions to address liquidity crunch
Liesman said that a “Fed source” said the Fed “still has under active consideration a set of tools to address the liquidity issue”. He added that the source would not discuss details, and that Liesman’s sense was that the “ideas would be seeing the light of day sooner rather than later”.
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8:40 Reuters now reporting comments from Fed source regarding liquidity issues
After the Dow’s 294 pt decline on the heels of a Fed rate cut, it appears that the Fed is making an effort to deliver the message that it might be planning additional action. As noted in our 18:24 comment, CNBC reported comments from a Fed source. Now Reuters is reporting nearly identical comments from a Fed source, who says that the Fed is actively considering all tools to address liquidity issues, and adds that the Fed is “not unaware” that funding pressures are getting worse. S&P futures have moved higher following the reports and are now (0.2) to fair value, up about 2.5 pts from levels prior to these reports.
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The PPT was now slurping with glee, while most investors were cringing. The Fix for the morning was in. Sure enough, prior to the US stock market open, the S&P’s were called 30 higher. Talk about a windfall for those in the know…
09:03 Federal Reserve, other central banks announce measures to address funding pressures
Today, the Bank of Canada, the Bank of England, the European Central Bank, the Federal Reserve, and the Swiss National Bank are announcing measures designed to address elevated pressures in short-term funding markets. The Fed said that actions taken by the Fed include the establishment of a temporary Term Auction Facility and the establishment of foreign exchange swap lines with the European Central Bank and the Swiss National Bank. Under the Term Auction Facility (TAF) program, the Federal Reserve will auction term funds to depository institutions against the wide variety of collateral that can be used to secure loansat the discount window. The FOMC has authorized temporary reciprocal currency arrangements (swap lines) with the ECB and SNB. These arrangements will provide dollars in amounts of up to $20B and $4B tothe ECB and the SNB, respectively, for use in their jurisdictions. TheFOMC approved these swap lines for a period of up to six months.
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09:05 Follow-up: Fed provides further details regarding new TAF program
The Fed says that by injecting term funds through a broader range of counterparties and against a broader range of collateral than open market operations, this facility could help promote the efficient dissemination of liquidity when the unsecured interbank markets are under stress. Each TAF auction will be for a fixed amount, with the rate determined by the auction process. The first TAF auction of $20B is scheduled for December 17. This auction will provide 28-day term funds, maturing January 17, 2008. The second auction of up to $20B is scheduled for December 20; this auction will provide 35-day funds, maturing January 31, 2008. The third and fourth auctions will be held on January 14 and 28. The amounts of those auctions will be determined in January. The Federal Reserve may conduct additional auctions in subsequent months.
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The Planet Wall Street and CNBC spin on the above plan to increase liquidity in our financial markets and help out the credit crunch were supposed to be in the works for a long time, but just got approved last night. Talk about just in the nick of time luck! To most of us, it is yet just another version of their HAIL MARY play … via another offensive formation.
Whether this latest maneuver to stave off continued market disaster in the US is a good one or not, I will leave to those with a higher pay grade. What I am absolutely sure of is all these latest maneuvers, taken in toto, are SCREAMINGLY GOLD BULLISH, for all the reasons people have wanted to own gold for eons.
What is so wrong here, and has been for some time, is the free markets are not allowed to function properly in the US, which is why they are now breaking down. The engineered MORAL HAZARD investor/market situation in the US is horrifying. The market managers have gone to their same well one time too often now, creating a massive problem that is gradually getting out of control.
None of what is transpiring here in the US is dollar friendly. Just the reverse. None of what is occurring is going to inspire confidence in those running the show here in the US, or in our markets. ALL of what is taking place is gold friendly. The ONLY reason gold isn’t $900 bid right now is because of The Gold Cartel and friends. They keep selling gold when the stock market is getting nailed. They have done it so often that TRADERS go with that scenario now, having undergone Pavlovian Conditioning by the cabal. Can’t blame them. They are out to make a buck.
While this routine IS infuriating now, it is only temporary. Again, The Gold Cartel is fighting a retreating war. They are doomed for the reasons presented here week after week. Demand for physical gold is going to overwhelm their dwindling available central bank supply.
The bottom line to me is the potential for the prices of gold and silver to explode is building by THE DAY.
In addition to the growing hysteria over the US financial market scene, crude oil is rocketing again. It closed up a stunning $4.37 to $94.39.
