-- Posted Thursday, 9 October 2008 | Digg This Article | Source: GoldSeek.com

US MARKETS

The Party's Over

The party's over
It's time to call it a day
They've burst your pretty balloon
And taken the moon away It's time to wind up
The masquerade Just make your mind up
The piper must be paid

The party's over
The candles flicker and dim
You danced and dreamed through the night
It seemed to be right
Just being with him Now you must wake up
All dreams must end
Take off your makeup
The party's over
It's all over
My friend

You danced and dreamed through the night
It seemed to be right
Just being with him Now you must wake up
All dreams must end
Take off your makeup
The party's over
It's all over
My friend

Lyricists: Betty Comden (born 1915 in New York City) and Adolph Green (also born 1915 in New York City)

            Indeed, the party is over.  You have all watched in horror as five years worth of stock market gains have been vaporized since the peak on October 9, 2007, almost exactly one year ago, when the Dow closed at a bogus 14,164.53.  Yesterday, on October 7, 2008, the Dow closed at 9,447.11, a loss of an astonishing 4,717.42 points, or 33.3%, precisely a one third loss in only one year.  The last time the Dow closed at a lower level than this was September 30, 2003, when the Dow closed at 9,275.06.  As astonishing as these losses are, they should come as no surprise, especially to our subscribers, who have been warned that this was coming for several years running.  All the gains for the past 8 plus years have been illusory, and the losses suffered over the past year are the direct outcome of an economy that has been based on nothing but smoke and mirrors ever since the dot.com collapse in 2000.  All of our financial markets have been propped up falsely by the illegal manipulators who comprise the Plunge Protection Team (PPT), also known as the President's Working Group on Financial Markets, and by false economic statistics so warped and inaccurate by virtue of hedonics that they read more like a fiction novel than the official statistics of what was once the world's greatest economic power.

            Hey Congress.  Guess what?  You have all just been purchased, compromised, threatened and/or duped by the same satanic trillionaires who manipulate your puppet strings from their ivory towers in our evil shadow government.  You have sold out the American people, who you falsely purport to represent, by approving the Paulson Ponzi Plunder Plan (PPPP), a gift of 700 billion to the same elitist scum who have intentionally and malevolently ruined our economy to pave the way for their precious New World Disorder, after packing this traitorous piece of legislation with 150 billion of pork, no less.  The approval even occurred contrary to well established Constitutional procedure.  You all had myocardial infarctions when the PPT took the Dow down 777 points on the day of your first vote on September 29 to extort your approval of their filthy bailout money, scaring your constituents by trashing their savings and pension plans.  You then turned the plan down only because you thought you might be lynched by constituents in November.  Then the PPT did this to you again, after pushing the Dow up almost 500 points the following day, by trimming off almost 500 points in the two days leading up to your second vote on October 3.  The Dow was again pushed up about 300 points in the early going in anticipation of a positive vote on October 3, making you believe that you had to pass the plan to save the markets.  Then surprise, surprise, the markets get trashed, after you approve the PPPP.  This was the plan all along.

            They led you to believe that the markets would recover if you passed the PPPP, but they had no intention of supporting the stock markets, which are now being sacrificed once again to support the dollar and the bond markets, and to suppress precious metals, all in anticipation of a worldwide reduction in interest rates.  The Fed is going to lower rates again, and they said as much in their most recently released statement.  And the world is going to follow suit very soon.  Some, like Australia, have gotten a jump on the Fed.  That is why gold and silver have been trashed the way they were.  They wanted to do as much technical damage to gold, silver and their related shares as they could, thus lowering the bar and forcing the precious metals to rally from a much lower vantage point than would have been set by free and fair markets, without interference by the fascist players in the PPT.

            Yes folks, that's right, the stock markets have yellow fever once again.  You would think they would have become immune by now after having several severe cases over the past couple of years.  We suspect that stock markets do not function quite like human bodies, unfortunately.  We have told you all along the gold suppression is JOB ONE at the Fed, and that the bond and derivative market is their source of power.  The bond market includes treasuries, the perceived quality of which is directly related to the performance of the dollar.  And that perceived quality is all-important in order to maintain the successful auction of treasuries to foreigners, and to keep their exports to the US competitive, which is especially important as trade slows due to a worldwide credit-crunch and recession.  Knowing these priorities of the Illuminati makes it quite easy to figure out what they are up to.

            So here is what they are doing:  The idea is to boost the dollar to support the treasury market by instilling confidence in these dollar-denominated assets, increase the value of bonds by strengthening the dollar and by lowering rates, thereby improving balance sheets of financial institutions which own such bonds, and to simultaneously suppress precious metals by virtue of the strengthening of the dollar and the liquidations of metals and other commodities positions to cover margins generated by crashing stock values.  By falsely suppressing precious metals and boosting the dollar, the Illuminist hope is that the real damage that has been done to our economy and to our dollar by inflation of the money supply by the Fed, and by free trade, globalization, off-shoring, outsourcing and both legal and illegal immigration, will be successfully hidden until it no longer matters whether such damages remain hidden or not.  This is also why they won't admit to a recession.

            The strategy then, is to use the stock markets and the oil and commodity markets as the sacrificial lambs for the bond and derivative markets, and as support for the dollar.

            To accomplish this, the US stock markets are allowed to crash by the PPT which withdraws its support, allowing the stocks to fall based on horrendous negative fundamentals and de-leveraging.  Everyone runs for treasuries, pushing bond prices up and rates of return down.  The US stock markets then usually cause a sympathetic explosion in the Japanese markets, and everyone in the Japanese and Asian stock markets start to sell their stock and run for the cover of Japanese bonds in much the same way as we run (stupidly) for US treasury paper in the event of a crisis.  The non-yen currencies, which are obtained via these stock liquidations are then converted to yen and used to purchase Japanese bonds and treasuries.  This process strengthens the yen, thus starting the cascade of losses as carry traders run to cover their margins.             As the carry traders bail out of foreign stock holdings, they convert the proceeds, which are in foreign currencies, into dollars, so that they can purchase US treasuries, where the money is then temporarily and (they think) safely parked.

            In the current case, the PPT withdrew its support on Friday after the PPPP was approved.  This, together with a worldwide banking and liquidity crisis caused Japanese markets on Monday to react badly to the US markets' treatment of the PPPP on Friday, and the yen became super yen once again, soaring from 105.76 yen per dollar to 101.26 yen per dollar, and from 146.118 yen per euro to a stupefying 136.782 yen per euro (that's almost 10 yen per euro in one day!)  With the bloodied carry traders in full retreat, the European and US markets also got taken to the cleaners on both Monday and Tuesday.  So what happens as a result of all this financial carnage is that many traders located abroad, or even here in the US, liquidate their foreign stock holdings into whatever currencies they are denominated in, and then use that currency to purchase dollars which are then parked in US treasuries for perceived safety.  That process bids up the value of the dollar, thus suppressing precious metals and increasing the attractiveness of US treasuries.  The increased demand for US treasuries also boosts their value, thus strengthening the balance sheets of Wall Street fraudsters, who now own a considerable number of treasuries, which they have received in exchange for their toxic waste.  Meanwhile, institutional carry traders are also in a mad dash to cover their margins as well, and precious metals and commodities get liquidated to raise the cash needed to cover.  This is why we have recommended for over a year now that those dealing in precious metals and commodities maintain un-leveraged, long-term, stock index puts and yen calls, to counteract these PPT maneuvers by maintaining liquidity via these puts and calls without selling off their metals and commodities.

            The oil market is a special case, not only due to its vast size, but because the hammering of oil prices is the only financial manipulation available to the Illuminati which has the effect of simultaneously suppressing precious metals while supporting the value of the dollar and boosting the economy.  No other manipulation can accomplish all three objectives simultaneously as powerfully as oil can.  Take a rate change by the Fed for example.  If the Fed hikes, precious metals are suppressed and the dollar is boosted, but the economy suffers.  If the Fed cuts, the economy gets some relief, but the dollar gets hit and precious metals rally.  This special case for oil is due to the euro effect of petrodollars and the extensive use of oil in the production of goods and services.  Because OPEC nations tend to spend their money in Europe, as opposed to spending it in the US, they take their gargantuan sums of petrodollars and convert them to euros, thus weakening the dollar.  When oil prices decline, the flow of petrodollars is slowed and there are less petrodollars to convert. This process supports the dollar by lessening the number of dollars that are being sold to purchase euros.

GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS

Unfortunately what we predicted for the market on Saturday became a reality quickly on Monday early. The bear market is upon us, all regular stock and stock funds should be sold even after Dow has fallen 4,000 points. Only keep gold, silver shares and perhaps oil and gas and special situations. There will be a handful of stocks that will run counter to the market. Early Monday was a bloodbath worldwide. In spite of the carnage the US Treasury the Fed and other central banks insist on manipulating the dollar upward. A dollar that now seems to have decoupled from gold and silver.

old open interest fell 4,703 contracts to 327,748, as traders in large numbers leave the Comex due to government manipulation. Silver OI fell 961 contracts to a new low of 101,834. The big Tocom shorts reduced net shorts by 1,257 to net 20,680, as Goldman added 43 to be net short 925 contracts. The same group went from long 12 silver contracts to short 57. The XAU fell 6.86 to 105.23. The HUI closed at 252.49 off 16.59.

 

Big buyers who are requesting gold delivery from the Comex are getting phone calls trying to persuade them not to take delivery or they are being threatened not to take delivery. This is a perfect example of today’s free markets. A CIA mentality of anything goes.

 

Considering all that is going on in the financial world we do not see much in the way of gold sales from European central banks. This now is their only safe reserve asset.

 

South African gold production fell 10.4% in the second quarter due to the electricity crisis. First half production fell 13.6%.

 

If you live in Australia you had best buy your gold coins before January 1, 2009. After that dealers will have you fill out forms and you’ll provide ID before you can buy gold. This needless to say is to combat terrorism. Buy while you can.

 

Coin shortages exist all over the world and premiums climb.

THE INTERNATIONAL FORECASTER

WEDNESDAY, October 8, 2008  -  100808(3)_IF

P. O. Box 510518, Punta Gorda, FL 33951-0518

An international financial, economic, political and social commentary.

 

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-- Posted Thursday, 9 October 2008 | Digg This Article | Source: GoldSeek.com

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