America's Back! Or Is It Just The Stock Market?

Did ya hear? The economy is back! No, check that, it's roaring like a hungry, untamed beast! You want proof? Why, just look around, the signs are seemingly everywhere. The DOW has skyrocketed to a new all-time record above 18,000.

Real estate, which collapsed only five short years ago, is once again paying out jackpots and being bid up by frenzied speculators hopping aboard the pleasure boat of unlimited opportunities. Yes, glory days are here again, folks! Cue the banjos or whatever it is they play when euphoric times are afoot.

What, still skeptical? Well, I can't really blame you since this does sound suspiciously familiar. In the words of the ever quotable George Bush "fool me once, shame on - shame on you, fool me - can't get fooled again."

Er right, but we know what he means, well sort of anyway. So it makes sense why we may want to be cautious this time around, especially since the vast majority haven't recovered from getting burnt to a crisp after the last few "glory days" fizzled. 

The greatest proof being presented that this time is really different and good times are here is that the fear trade of gold & silver prices have tanked. And I mean tanked bad during the past two years of this seemingly unstoppable economic "recovery" locomotive.

Record unemployment: Gov't idea of  recovery

Gold has plummeted from 2011 highs of $1900 oz to $1160 today and silver has been bludgeoned even worse, $49 down to $15 during that time. Yowch! It appears all those Austrian economists (sound money advocates) who have been screaming from the rooftops (like this author) "the end is near for the US dollar and Euro" must have a lot of egg on their (my) faces right about now.

After all, even as we've been pointing out what should be obvious: amassing greater and greater debt,  printing unlimited amounts of funny money to support that debt, then continually raising the debt ceiling to spend even more is a recipe for disaster, the markets have responded by rocketing ever upwards, defying the law of sanity itself!

Economic numbers reveal joblessness and welfare rolls are increasing, markets move up. Inflation moves up, markets move up. GDP slides downward, markets move up. The Federal Reserve Committee announces $85 billion per month in further quantitative easing (QE) on top of the previous trillions thrown at the failing banks, the markets cheer and move up. The debt ceiling keeps getting surpassed, markets move up. States and counties default on bonds, resulting in massive layoffs and theft of worker pensions, the markets move up.

Less than sturdy White House of cards

Over in the Eurozone, member nations default one after another and the markets move up. A desperate Japan announces a "brilliant" unlimited QE plan to create horrific inflation in the hopes of reviving its hopelessly crippled country, the markets move up. The LIBOR banker interest rate rigging scandal erupts, the markets  yawn and move up. HSBC admits knowingly laundering $100s of billions  in drug cartel and terrorist money, the markets move up.

And what's the best evidence of all that the economic recovery is now bulletproof? Cyprus's banking system collapses, new banker bail-in laws are hastily crafted to save them by stealing trillions from depositors, and the markets respond "awesome, dudes, that's the best news ever!" And up the market go. That's a lot of "pink elephants" being ignored, but perhaps in this Wizard Of Oz economic paradigm, the world can simply close its eyes, click its heels twice and make them go away!

"Welcome to America: where ignorance is bliss"

Maybe an apology is in order for the esteemed leaders some of us so vehemently criticized as monetary lunatics. I mean, yes, during Obama's first term, he and his team increased the U.S. deficit by $8 trillion, more debt and spending than all U.S. Presidents combined in 236 years! That's quite a breathtaking feat.

And to think we doubted his intentions for handing out tens of trillions in taxpayer dollars to failing banks and  corporations as punishment for their misdeeds. I'm sure they'll think twice about continuing to commit crimes in the future, since Obama vowed if they get caught again, he will be forced to punish them with even more money.

It's good to know the Prez has got our backs, even when he does it behind our backs. Ah, maybe I'm just being too cynical. As Hillary Clinton says "what difference at this point does it make?" And the crickets keep chirping across the national landscape.

In the land of Oz-bama anything goes!

In the olden days, prior to 1971, when money was actually backed somewhat by gold, the free-wheeling spending and corporate giveaways would have been deemed unthinkably unaffordable, guaranteed suicide!

But in the Land of Oz, basic math has been banned so Cowardly Lion Obama and Scarecrow Bernanke are hailed as economic saviors for making decisions disastrous to the nation. Once again, in the words of the curious philosopher G. Bush "Mission accomplished!" 

However, in the old fashioned defense of sound money, the nation, much less the world, has never seen this level of monetary printing backed by absolutely nothing but faith so there is no precedent to compare it to. The more they do it, the more the markets get addicted, responding by driving prices and euphoria higher.

The wizard of debt!

Is this the new "normal?" Well, it sure seems that way...so far anyway. So what are we to do now? Well, for those prepared to pierce the veil of illusion, there are endless clues littered across the economic landscape for them to see.

After every market bubble pop, the experts, who previously shouted "this time really is different, the world has changed, ignore the past, this is the new normal, don't be left out, buy, buy, buy!," reverse course and cry "it was so obvious that irrational exuberance caused this. And (clears throat) what I really said before was to be cautious and very selective in that overheated market. Didn't you all get my memo?" 

Screaming "buy!" prior
to the bubble burst in '08. 

Uh, no we didn't because there was no memo. So its best to use those esteemed government economist clowns as contrary indicators because if they are telling you to buy, you can bet they are the very ones selling you a big bag full 'o shit!

Are we about to experience the mother of all economic meltdowns the world has ever seen? Well, if not I'd say we are very close and the ice is getting very thin. Listen, is that the sounds of cracking ice we hear? Let's be old fuddy-duddies for a bit and use our basic reasoning-logic skills instead of blind faith as we've been told.

This way, we can see all the "pink elephants" the government wishes we'd ignore, while keeping in mind what has happened throughout history as our guide, for we know the past predictably remains prologue. This allows us a certain foresight into the future for what is to come and  how to prepare accordingly. 

The government's economic spinmeisters continue to lead the charge, spinning every piece of negative news into a positive, even to the point of faking numbers that counter their conclusions. One of their present conclusions is that the more millions of citizens the government can herd into its Supplemental Nutrition Assistance Program (SNAP), the better it is for the economy.

How, pray tell? "It's obvious," they smugly proclaim. "When poor and unemployed people are given lots of free government money, they go out and buy lots of stuff, thus stimulating the economic recovery. So the more people on welfare, the better. Duh!"

"Come get your SNAP!"

And what a success it is with over 50 million Americans dining at that "all you can eat" buffet. What the government conveniently fails to tell us is where the heck all  that money comes from to pay for all of their generosity. Two sources really. They create it out of thin air by keeping the printing presses cranked full speed and by stealing it from the ever-shrinking taxpayer base, you know the minority of citizens who actually still have jobs! Recipe for disaster? Don't ya know it!

Pay no attention to the man behind the curtain and go back to sleep! Given all the above, how could anyone with even a modicum of active brain synapses still firing believe the clumsy lie that we are in the midst of the greatest economic prosperity the world has ever seen? Well, it's actually because of the above that everyone has been lulled into the present Pollyannic view that no matter what calamity befalls us, the captains of the economic ship know what they are doing, even as water pours into the hull and the ship continues to sink. 

"Full steam ahead!"

"Forget the lifeboats and quit being such a 'boat is half-full of water' party-pooper. Can't ya hear the band playing on-deck? The party's just getting started!" The party continues, but the band plays ever louder in order to silence the screams of those trapped and drowning below deck. Meanwhile, even more suckers jump aboard the sinking ship of fools on its final destination down to Davy Jones' locker! 

I know, you may be thinking "yeah, but the sound money folks have been saying that for a long time and yet, look how high the stock market has gone up anyway. What's going to change that anytime soon?" Very good question and again, as history has so clearly revealed, it's at the point when the majority finally capitulates and says "hey, if ya can't beat 'em, join 'em" is when the disastrous turning point is within reach. 

The evidence! The stock market just surpassed 15,000 as the government claims  home foreclosures have slowed down to "manageable" levels, signalling a new bull market in stocks and real estate. But, wait a minute. With so many "pink elephants" out there, how can the stock and real estate markets continue their uncontested ascent so easily? Well, two reasons really, both of which virtually guaranteed a rise above 15,000.

2013: setup for another housing pop?

First: The Fed continues to pump $85 billion a month into the Wall Street investment banking sector to artificially prop up the "house of cards" and provide them liquidity to make risky bets in the stock and bond derivative markets on the taxpayers' dime.

Second: Because of virtually zero percent bank interest rates, depositors have been forced to gamble their savings just to keep up with the ravages of inflation, so they've been herded into the markets with seemingly no other choice. All the while, mainstream media reminds the people to throw caution to the wind and recklessly pour their savings into the markets or miss the "greatest investing opportunity in history." Yes, greed is a powerful motivator!

And suddenly everybody is an investing genius. Plumbers, hairdressers, cab drivers  and your pet parakeet offer up tips to anyone within earshot on flipping houses or how to day-trade Apple stock like a pro. Sound familiar? Yes, this is exactly what was going on just prior to the internet stock implosion of 2001 and the real estate market bubble pop of 2008. Mere months before their predictable collapses, the mantra was "this time is different!" But it wasn't, not by a long-shot.

Wall Street pumped full of hot air!

Perhaps the greatest sign of things to come occurred the second week of April 2013. Out of nowhere, the gold and silver paper-traded markets collapsed more than 20% in just two days with no economic news to justify such a shocking global sell-off.

The government's mainstream media cheered on the crash, claiming this was incontrovertible proof that the "Chicken Littles," who were annoyingly shouting "the sky is falling," had finally given up on holding precious metals as a safe haven asset. "If you can't beat 'em, join 'em" appeared to be the reason, but as the days progressed and though the media spun their webs of deceit ever thicker, the truth began to emerge.

Because the metals are traded in the form of paper certificates run by entities such as the LBMA (London Bullion Market Assn) and COMEX (Commodities Exchange), which many critics unaffectionately nicknamed CRIMEX, no actual physical metal changes hands when someone buys or sells through these global exchanges. The only thing that really changes hands are paper ETF (exchange-traded funds) receipts which are supposed to be backed by the metals in COMEX vaults.

But, guess what? President Nixon closed the gold window in 1971 because the United States obviously no longer had all the gold in Fort Knox they were supposed to have. That's the moment the US dollar became a currency backed by absolutely nothing but faith and deceit.

The mother of all pyramid schemes - stay away!

The COMEX functions in the same criminal way, selling many times more paper ETFs than metal they actually hold in their vaults. This means most ETFs, just like the US dollar, are not backed by anything other than blind faith that all the gold is still there - even though it's not!

The U.S. government has been able to manipulate and suppress the prices of the metals by allowing their banking agents, JP Morgan, Goldman Sachs, HSBC etc., to fraudulently naked short as much of the metal ETFs as is necessary to give the illusion that the US dollar remains a strong global currency, which it obviously is not.

When gold & silver prices remain stable, (read: low against the dollar) it signals to the world the dollar's strength. But when the metals' rise, it signals the opposite. Since 2000, the stock market has risen about 40% as the dollar's value has dropped much more than that. Gold and silver, on the other hand, have shockingly risen as much as 800% in dollar terms, which is a twenty-fold rise in comparison to the DOW JONES!

Russia's gold buying spree!

This is the reason the government is forced to do what they can to crush the metals' prices as it exposes the ongoing collapse of the US dollar and the stock markets connected to it. When adjusted for inflation (theft of the people's purchasing power by gov't) over the past thirteen years, the stock market has actually gone nowhere, so the so-called bull-market is really nothing more than a whole lotta bull-shit! And guess what, the world has started to awaken to that fact.

In the aftermath of the April 2013 government-sponsored smack-down of gold and silver ETF prices, citizens the world over began to do the exact opposite of what was intended. Because COMEX and LBMA vaults have little actual metal in them to satisfy delivery if too many buyers chooses to "cash in" a metals ETF for the real thing, the government tanks the price to help keep the exchanges from defaulting. This keeps the ponzi scheme going, since the vast majority of ETF investors have been fooled into settling for cash rather than metal.

The banker's "oh shit!" moment just hit them!

More importantly, extreme price drops typically cause panic-selling of the physical metals too. The criminal exchanges then scoop up those metals on the cheap, then turn around and deliver to investors who refuse to settle for anything but the real thing.

In that respect, it works the same way banks do. If even 5% of customers decided to withdraw all the money in their accounts by cash, the banks would go belly up in an instant since they don't have much in their vaults either. It's also why banks encourage customers to use debit or credit cards to make purchases in lieu of withdrawing cash because it keeps the ponzi-scheme alive!

China's 'Gold Rush' is on!

As said earlier, the system we are presently suffering through is an illusory one based on fraud, deceit and bad faith! So, getting back to the recent smack-down, rather than capitulate and panic-sell, the world began buying the physical metals in an frenzied stampede that quickly wiped out available global supplies of it.

People realized finally that ETF gold and silver, traded in unlimited quantities because there is next to zero physical metal backing them, are not the same as the actual very limited quantities of gold and silver that they can purchase and take home with them.

During the smack-down, it was reported that Chinese housewives, aka "aunties" purchased over 300 tons of gold ($16 billion worth) in less than a week and have continued that pace as supplies quickly ran dry in China's massive jewelry districts. The rest of Asia, Europe and the Middle East reported similar buying as well. Just like that, inventories of gold and silver were wiped out by the frenzied buying the world over, stripping the COMEX, LBMA and other member vaults of what little metal they had left to keep their ruse going. 

This is what real money looks like!

In the U.S. retail bullion market, savvy investors traded so many US dollars for every piece of gold and silver they could get their hands on that there is currently a four to eight week wait to purchase anything and US silver and gold eagle coin premiums have skyrocketed.

Though the fraudulent ETF price of silver was trading at around $24, the price to actually buy a US Silver Eagle shot up to around $32, if they were available at all - roughly 30% above what the Crimex would have us believe they're presently worth! This clearly shows that the government went way too far this time by grossly underestimating its people, who, after being fooled for so long, have collectively awoken and decided they "can't get fooled again!" 

Time to tune out the lies!

The writing's on the wall and the government knows their fraud has been uncovered, but their only recourse has been to continue shorting the ETFs in a brain-dead attempt to scare its people and the world's public to reverse course and sell, but that's just not happening.

All this is doing is encouraging them to continue buying even more of the real thing at these artificially low levels, bypassing the  irreparably broken and corrupt paper system altogether. Sadly, the rest who stubbornly continue riding the stock market dollar casino bullet-train, will realize too late that there are no brakes as it careens off a cliff, wiping out everyone aboard once again.

Whether you believe it or not, the signs are all there: the world is once again returning to a gold and silver-backed currency as it always has after every failed attempt in history to subvert it. In case you missed it last year, when Ron Paul asked Mr. Bernanke whether gold was money, he replied "No, it's a precious metal."

When Ron Paul pressed further, asking him why banks hold gold, caught off guard like a deer caught in the headlights of an oncoming truck, Bernanke hilariously blurted "Well, it's a tradition. Long term tradition." Bear in mind, this guy is in charge of the nation's financial future.

"Who needs gold when I'll give
you all this paper for free?"

Do you really want to entrust it to this mindless twit? I mean, since when have banks been so sentimental as to do anything simply for the sake of upholding a tradition? Never! The only tradition they honor is the one to steal, steal and steal again! In fact, the major world central banks have been loading up with real metals in preparation for very, very high prices in the near future as they know the physical prices are going to completely disconnect from the criminally suppressed paper prices soon.

And no, they're not doing it to honor tradition, but rather to make a few thousand metric tons of profit instead! You can bet this is why they are pounding the media airwaves with the message "don't buy gold or silver. They're not real money. Stay in stocks and bonds. They're much safer and look how high they're going!" Remember, in order to succeed financially, do as the super-rich do and not what they tell you to do, unless you actually like being left holding bags of manure.

Why the Chinese really are smarter.
They want gold and the U.S. doesn't! 

The Chinese government though, has been by far the most aggressive buyer, importing over 300 metric tons of physical metal through its Hong Kong exchanges in March and another 400 tons in April! In contrast, most western exchange vaults are becoming completely depleted by this flow of gold and silver from west to east.

Who's going to win the currency war? I'll give you a hint, it won't be the west as China and Russia know the U.S. is economically kaput  and are making strong moves to replace the US dollar as the world's reserve currency with a gold-backed one that they will control!

So, it's clear that you'll want to exit that toxic currency as quickly as possible and begin accumulating real assets, silver & gold, as the rest of the world is presently doing. It's advisable to buy some from local bullion dealers and hold some of it safely in your personal possession as you would cash, while storing some of it in private, allocated metals storage vaults for your safekeeping.

Keeping your money out of harm's way

Having a portion of your metals stored abroad isn't complicated and can protect your wealth from the onrushing economic instability we're currently facing. Vault storage accounts can be set up online in about twenty minutes, are as simple as opening an online bank or brokerage account and function very similarly, except for one very important difference. You are actually buying and storing real physical gold or silver in your account instead of paper or electronic currency that can be wiped out in a nano-second.

Exit their system before this happens, not after!

In fact, bullion accounts can be linked to your bank account for transferring money between them. The advantage of this is if your bank goes under, it does not affect your storage account in any way. You'd just have to link a new account to your vault account.

Two reputable vault companies out of many are BullionVault and GoldMoney, both of which I have experience with. With each, you can buy metals from within their fully allocated and insured systems, which means they can only buy or sell you metals they actually have in their audited vaults - no paper ETFs. You also have the choice of storage in Hong Kong, Singapore, London or Zurich for monthly fees lower than most bank safe deposit boxes.

And when you want to sell some of your metals or take delivery of them, the proceeds can be transferred to your bank account within a day or two or the metals sent to you anywhere in the world you choose, giving you great flexibility. Just try getting through TSA with a few bars of gold or silver if you want to take your metals abroad. Ain't gonna happen. As has been happening with too much regularity, precious metals are being confiscated and its owners sometimes detained as possible terror suspects.

Escape before it's too late!

If you're just starting out with gold or silver though, it's enough to simply buy a few coins here and there to get you acquainted with the idea of sound money once again. And unlike derivative assets like the dollar, stocks, CDs, IRA, 401k, etc., the metals have no counter-party risk.

What this means is because you have possession of the asset, no opposing party can decide to take them away from you at their whim, nor will their value drop to zero like most paper assets eventually do.

In closing, it's become clear that big economic changes are imminently upon us, requiring careful thought and action in response to them. The decisions each of us make and the paths taken will have tremendous impact on our lives, ultimately separating those who financially thrive and those who financially die. With eyes wide open, may your decisions be good ones.

"Just follow the yellow brick road!"