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Sprott's John Embry Discusses The Four Horsemen Of The Financial Apocalypse
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A fine compliment and in addition to Sprott:
Hourly Action In Gold From Trader DanPosted: Nov 25 2009 By: Dan Norcini Post Edited: November 25, 2009 at 5:48 pm
Filed under: Trader Dan Norcini
Dear Friends,
The surge by the Euro above major resistance centered near the 1.50 level with a corresponding break of downside support in the US Dollar and a move to a new yearly low, catapulted gold up to within easy striking distance of $1,200.00. If you recall our inflation adjusted gold price chart, a breach of that level on strong volume could take gold into an upside acceleration with a longer term target of $1,750 quite conceivable based solely on the chart pattern alone. It appears as if the $1200 level could fall early next week.
I find it more than disconcerting to see the complacency in the broad US equity markets regarding the near free fall in the Dollar. A falling dollar may generate some paper profits for US businesses, especially those in the export end of things, but it spells disaster for the US consumer, especially both the poor and the middle class, who have yet to understand what is going to happen to their purchasing power as the cost of the basic necessities of life begin an inexorable climb higher. Remember how they quietly switched that 5 pound bag of sugar to a 4 pound bag and left the price the same? Well, get ready for another repeat of that – expect to see smaller bags and boxes of cereal, etc, but with the same sticker price as the former larger quantity size. Suzie Homemaker will be confused as she comes home from the grocery store with another $200 worth of goods but with far more room left in her cupboard after she unloads the bags.
Jim has said it many times – these derivative kings have destroyed us all. While we welcome the rise in gold, we despise the reasons for its rise because it could have been avoided. Now it is too late. The Dollar is finished as the global reserve currency and with its demise, so too goes the position of US preeminence in global economic affairs. As that fades, eventually military power will fade as well. Just like Rome declined, so too America is on the path of long term decline and believe me, it pains me deeply to have to write this. Instead of letting the pond scum bankers and financial wizards who sold the public and the global investment community a bill of worthless goods (read Structured Investment Vehicles and Collateralized Debt Obligations) reap the consequences of their unbridled greed, the powers that be decided to instead debauch the currency, our birthright, and begin a process of nearly unlimited creation of worthless scraps of papers which somehow are laughably regarded as “money”. Gold’s rise is now mocking that “policy” and exposing it for the generational theft that it is.
The idiotic notion that one could print their way to prosperity seems to have completely enveloped our current crop of leaders as if all that is necessary to generate permanent well-being is a perpetually rising stock market. Do you not find it amusing if not somewhat depressing, that we have coined a new term to explain what is sheer stupidity if words mean anything – a “jobless recovery”? There can be no recovery where there are no jobs because where there are no jobs there is no demand from consumers who are clinging to life support and hoping to avoid being the next round of payroll casualties. Businesses are profiting because they have cut the major item of expense in their budgets – payrolls. Even that has a new euphemism attached to it –“increased productivity”. Let me give you the Norcini explanation of that term with a real world definition – Fire half your workers, dump the remaining work on those who are left, make them work twice as hard and keep their salaries the same. That my dear friends is how these heartless fiends who come up with this crap define a recovery.
With the official unemployment record closer to 18%, millions of Americans are now on food stamps, in danger of losing their homes, and trying to keep from losing all that they have worked for the entirety of their lives. Yet we are assured that the economy is recovering and it will just be a matter of time before new hiring kicks in and a new era of abundance is upon us. Make no mistake about it –business owners are NOT going to ramp up employment if they can keep their payrolls lean and mean. There are too many workers looking for employment to allow workers who complain about being overwhelmed by work to be taken seriously. The attitude is: “if you do not like it, someone else is standing in line behind you to take your place so shut up and get back to work”. Owners will hold out to the last moment before taking on additional payroll expenses.
Were it not for the government’s cash for clunkers program and its first time home buyers tax incentive, GDP would be disappointingly low. Just look at what happened to car sales when the cash for clunkers program ran out of money. They fell off a cliff. Expect the same in the real estate markets after the first time credit expires because there is also a glut of homes from foreclosures not to mention the many homes that are up for sale due to economic distress by hard pressed homeowners who are facing unemployment or reduced incomes.
That is why we are seeing bonds moving higher even as the stock market moves higher. Strangely enough, the equities are running in a dollar induced inflationary environment while the bonds are signaling the deflationary aspect of falling home prices and other assets. We are getting a mix of both inflation in some sectors and deflation in others. How would you like to be an automotive manufacturer watching the cost of all of your commodity inputs soaring at the same time the public has no money to buy your cars? What a perfect hell storm!
Back to gold, technically it is overbought but that is a relative term and really does not mean much when a buying frenzy commences. Expect volatility to increase as price moves higher with larger intraday price swings the norm. Margin requirements will increase sharply as well. Buyers of calls in particular can expect to pay some hefty premiums. I keep watching silver to see when it breaks through the $20 barrier. Silver demand is very strong right now especially among those who can no longer afford gold. Let’s see if that is sufficient to take it through overhead resistance at $19.00 on the charts.
The shares are still lagging behind the bullion but at least their charts look very strong.
Enjoy your Thanksgiving.
Trader Dan
Deflationary depression versus hyperinflationary depression... those are the only two choices that are on the table right now. A Japanese "solution" is nothing but a pipe dream.
The die has been cast however... the vested interests will be assisted until they can't be... and the political expediency of the matter will prevent the deflationary scenario from occuring...
The future is clear.
Anybody notice the best analysis always comes out of Toronto? Just sayin' :-)
great article Trader Dan but you and many others are wrong about one thing - it is not a 'jobless' recovery - it is very much a 'JOBLOSS' recovery
May be BB is planning on changing his profession to a dietician(if I spelled that right). I mean sugar is bad for your health,right?
Nothing you can know that isn't known.
Nothing you can see that isn't shown.
Nothing you can do but you can learn how to be you in time.
It's easy.'
-The Beatles
'Ask yourself whether the dream of heaven and greatness should be waiting for us in our graves - or whether it should be ours here and now and on this earth.'
-Ayn Rand
'There's a hole in the sky
We'll all take turns
I'll get mine, too
If man is 5
Then the devil is 6
And if the devil is 6
Then God is 7
This monkey's gone to heaven'
-The Pixies
Faber is one of my favorites. OK, mayhaps he comes off as a bit eccentric when he says buy a farm and a shotgun because things will get bad or buy some farmland as a hedge for when the bombs start falling; continuing that strand he said overnight in Singapore 'in order to distract the attention of the people, governments will go to war.'
Not exactly a news flash for skeptics. Tenuous premises that are heralded as truths and upon which conflict erupts are not beholden to any one country or culture. America certainly has had her share from this chalice. The Mexican-American War was initiated with President Polk stating, 'Mexico has passed the boundary of the United States, has invaded our territory and shed American blood upon American soil.' In fact the claim of American soil was falsely predicated on documents that were neither considered to be treaties nor ratified as such between Mexico and her breakaway Republic of Texas. But hey, we coveted the land. In Vietnam, covert operations moved to open involvement due to the Gulf of Tonkin incident. President Johnson told the American people on August 2, 1964 that the North Vietnamese had launched an attack on the USS Maddox. He requested authority to attack. After a second attack on American forces was reported two days later, air strikes commenced. In fact the second attack was a complete fabrication, and the first attack, as relayed to me by an elder who was an intelligence officer on the USS Maddox on that day, was deliberately provoked. Flash forward to operation 'Get a Load of Us' in Iraq, with Colin shakin' that thang (anthrax) at the UN, unmanned planes with WMD ready to hit the West Coast, and 9/11 as the casus belli - we should of attacked Hamburg on that basis- all so we could save a country best described as 'Tribes with Flags within a square drawn in the sand', where if you put a flagstaff down hard oil would bubble up. Rhyming, the Vulcans proclaimed a Democracy Domino theory ... how did that one work out?
Faber is articulating war as the 'circuses' component of Juvenal's famous quote. But hey Marc, there's a plenty going on under the big tent already. The manufacture of consent and content may not tip J6P to contempt.
And ain't no doubt that there is plenty of bread flying around.
In social animals, the alpha is the individual that ranks the highest. A beta animal will act as a new alpha animal upon the latter's death. The omega is the lowest caste of the hierarchical society, and they are usually the last that is allowed to eat.
Will our Alpha Males be able to maintain Omega Zen?
Regardless any 'revolution' that might occur will most probably be plagiarized.
That is, if it ain't vaporized first.
On a brighter note, have you caught the new 'Prisoner' on AMC? Très cool.
"Prisoner" is a snoring bore.
Braavo (standing encore clap)!
I am not worthy to expound,but here's a clip from one of my favorite moves, The Deer Hunter:
http://www.youtube.com/watch?v=RaXteVh8y4k&feature=related
Or a collage:
http://www.youtube.com/watch?v=xAAiYMgFcbw&feature=fvw
Great article. Bernanke et al walked into an economic disaster. They had to choose between a deflationary collapse by not printing FRNs, or a hyperinflationary currency collapse by printing FRNs. They have chosen to kill our currency to save the banksters. Got gold?
Bernanke et al walked into an economic disaster
I would substitute "created" for "walked"
I think Volcker helped fix the easy monetary policy of the 70s. Then Greenspan undid everything Volcker fought for and spun bubble after bubble in equities, then real estate with his too-easy for too-long monetary policies. It is obvious now what Greenspan's 1% interest rates in 2001 did to us--it just set the stage for a worse crash in real estate in 2008.
These 1% rates were originally created to alleviate the bust following the Nasdaq crash. But look what happened in 2008! If only Greenspan kept interest rates higher in 2001, we never would have had the 2008 crash be so severe.
So, when Bernanke walked into this monetary policy disaster that the Maestro left for him, he could have done the right thing and let the banksters fail. Instead, he chose to jeopardize the US currency itself with destructive 0% interest and QuantEasing. Insanity. Got gold?
I believe you may have missed DH's point. Fed Funds was at or near 1% from July 03 through Jun 04.
From Bloomberg: "Ben S. Bernanke urged a readiness for a steep interest-rate cut in 2002 in his first meeting as a Federal Reserve governor"
Connect the dots, Bernanke walked into nothing that he did not help create.
They have done nothing but put Volcker in a closet pretty much. If you dont tow the party line of fiscal insanity, then you get ignored. They used Volcker for his name... and he knows it now.
If he has any integrity left he should start talking. What has he got to lose at this stage of his life?
He is part of the Trilateral machine just like Chopper, Greenspan, Rubin and Geitner. He isn't go to say anything.
Good read-
I will use the 2nd to last paragraph as a greeting and my signature, it says it all.
Yes it surely does.
I hope they have fun spending those fiatsos in the sun somewhere. They better be wearing disguises or be in the witness protection program.
Because there are going to be a whole lot of pissed off people with allot time on their hands.
QFT
(sorry, edited for...stuff)
Yukon Cornelius got it right the first time: Gold!! Silver!!
i might be watching that one twice this year.
Christina Romer has dibs on Famine.
I am a peasant,
and god help me;
I Thank GOLD (go up ) and GOD
Thank you.
Gold is not a steak!
Herrie@
What happens if the dollar just goes down a little bit?
Will it be time to party again?
Fantastic piece!
Lul, misschien maar what ever.
It's the mystery of Inequity...
Said it's the misery of Inequity...
Said it's the history of Inequity...
When it all...
All falls down...
Telling you all...
It all falls down
Children...
Eat your bread
Little children...
Eat your bread
Cuz it all...
All falls down...
Telling you all...
It all falls down
[First and only verse]
Yo!
Ya'll can't handle the truth in a courtroom of lies
Perjures the jurors
Witness despised
Crooked lawyers
False Indictments publicized
Its entertainment...the arraignments
The subpoenas
High profile gladiators in bloodthirsty arenas
Enter the Dragon
Black-robe crooked-balance
Souls bought and sold and paroled for thirty talents
Court reporter catch the surface on the paper
File it in the system not acknowledged by the Maker
Swearing by the bible blatantly blasphemous
Publicly perpetrating that "In God We Trust"
Cross-examined by a master manipulator
The faster intimidator
Receiving the judge's favor
Deceiving sabers doing injury to they neighbors
For status, gratis, apparatus and legal waivers
See the bailiff
Representing security
Holding the word of God soliciting perjury
The prosecution
Political prostitution
The more money you pay.. the further away solution
Legal actors
Babylon's benefactors
Masquerading as the agency for the clients
Hypocritical giants
Morally non-compliant
Orally armed to do bodily harm
Polluted, recruited and suited judicial charm
And the defense isn't making any sense
Faking the confidence of escaping the consequence
That a defendant is depending on the system
Totally void of judgment purposely made to twist em'
Emotional victim blackmailed by the henchmen
Framed by intentions
Inventions whereby they lynch men
Enter the false witness slandering the accused
Planting the seed openly showing he's being used
To discredit, edit, headed for the alleged
Smearing the individual fearing the unsuspected
Expert witness (the paid authority)
Made a priority to deceive the majority
Of disinterested peers
Dodging duty for years
Hating the process
waiting to be returning to their careers
Do we expect the system made for the elect
To possibly judge correct?
Properly serve and protect?
Materially corrupt
Spiritually amuck
Oblivious to the cause
Prosperously bankrupt
Blind leading the blind
Guilty never defined
Filthy as swine
A generation pure in it's own mind
Legal extortion
Blown out of proportion
In vein deceit
The truth is obsolete
Only two positions:
Victimizer or Victim
Both end up in destruction trusting this crooked system
Mafia with diplomas keeping us in a coma trying to own a piece
of the "American Corona"
The Revolving Door
Insanity every floor
Skyscraping, paper chasing
What are we working for?
Empty traditions
Reaching social positions
Teaching ambition to support the family superstition?
When the Son of Perdition is Commander in Chief
The standard is Thief
Brethren can we candidly speak?
Woe to the men
Trusted in the chariots dem'
Leaning on horses
They run their intellectual sources
Counterfeit wisdom creating the illusion of freedom
Confusion consumes them
Every word they speak it turns them out really white
Internally they absent of light
trapped in the night and bonded to the Cain of the night
Under the curse
Evil men waxing more worse
Faxing the first
Angelic being cast to the earth
It's time for rebirth
Burnin up the branch and the root
The empty pursuits of every tree bearing the wrong fruit
Turning me ill
Let him who stole, no longer steal
Oh it's real
Surrender for Jehovah is real
How long will you sleep
Troubled by the thoughts that YOU keep
The idols YOU heap
Causing the destruction you reap
Judgment has come
Find it and return to the One
Abandon the flesh
Self-interest: Broadway to death
Pride and the Greed
Hide and subdividing the seed
The knowledge of Good and Evil is what caused us to lie
Caused us to die
Let your emotions be crucified
Renounce all your thoughts
Repent and let your mind be re-taught
You'll find what you sought...was based on the deception you bought
A perception of naught
Where the majority remains caught
Loving a lie
Not realizing in Adam, all die
Loving a lie
Not realizing in Adam, all die
Loving a lie
Not realizing in Adam, all die
Loving a lie
Not realizing in Adam, all die
[sing song Chorus Outro]
It's the mystery of Inequity
Say it's the history of Inequity
Say it's the misery of Inequity
When it all...
All falls down
I'm telling you all...
It all falls down
Nice!
Observe that there must be an inflection point between deflation and inflation...where this is is a mystery, but printing money and using it for QE is unconstitutional. Our government has done other unconstitutional things in the past but if it actually breaks the currency it may spell the end of these United States as we have known them.What's worse is to have the retarded Kenyan and his merry band of lunatics leading us into this "change".
When did the people of the United States have an obligation to buy GM???? It never needed to go BK either. A haircut for retirees and wage reductions would have saved the day. AIG ....haircut for bondhoders and all would be well. I don't get it. GS hands out more in bonus than the GDP of many nations. I don't get it. Millions unemployed and they aren't besieging Congress and the Precedent. I don't get it.
Middle class americans were too intoxicated by their plastic cards the last decade to think what a hole their politicians were leading them into. Last 2 years they were too enchanted by the pied piper talking "change" but actually bankrolled by Wall Street. Now they are too busy worrying about their jobs or if they are jobless, whether their politicians would extend their jobless benefits. In all cases, they are always led by their noses into servitude by politicians. If history is precedent, it would be at least 2 or 3 generations before they realize their emperor is naked. Enjoy your Thanksgiving turkey, America, because there might not be any turkey next year.
"Millions unemployed and they aren't besieging Congress and the Precedent. I don't get it."
When their super-extended unemployment benefits run out -- or when those benefits no longer buy the basic necessities -- J6P will get fired up and do a French Revolution number on those Washington elitist idiots. Then it is off to take care of 50 Broad MF's and the rest of the Gangster Banksters.
This is about ushering in serfdom. Max pain = dollar rally, the cover is there to "protect the dollar" = equity /401k crash + gold crash = max suckers/losers..serf creation.
Too many peeps lovin on gold for this to keep going.
Clearly the trend in gold is up. Time to get long, put your trailing stops in and make some money. Conversely, the trend in the USD is down. Get short USDX, put your trailing stops in and make some money. Why ask why?
It is certainly not the time to short dollar, it is ripe for a spike up of 15 to 20%...
thank you john embry... excellent piece.
The Dow/SP500 primary trend remains down (since early 2008) and the monthly charts will eventually have the last word.
Am still expecting a USD rally.
http://www.zerohedge.com/forum/market-outlook-0
So do i
embry + sprott = +100 for analysis
They better hurry up and crash the stock market or the bullion banks are going to be in deep trouble.
Do you laugh or cry?
Michigan's Silverdome sells for $583,000. Yes, you read that right.Here's all you need to know about the real estate market in Michigan: The 80,000-seat enclosed Silverdome, built for $55.7 million in 1975 to house the Detroit Lions, has sold for $583,000.
And you thought your home had lost its value during this recession.
Think about it this way: $583,000 will get you a decent, but not terrific, house in a nice neighborhood in Northwest Washington.
According to this story from the Detroit News, the Silverdome -- which is a bubble dome, pictures of which you can see here and here -- was hoped to fetch at least $1.3 million; maybe as much as $3 million. The dome comes with 27 acres.
This may be the king of all commercial real estate horror stories of this recession.
I just can't throw enough "Wows!" into this story. Imagine if the Washington Redskins left FedEx Field for a new stadium and the area around it degraded so far so quickly that only 30 years from now, the $250 million stadium sold for $2.5 million, or 1 percent of the cost to build it, as the Silverdome has.
Michigan's economic woes are well known. The state's unemployment rate is 14.3 percent, well above the national rate of 10.2 percent. Two of the state's Big Three automakers went through taxpayer-funded bankruptcy. Heck, the Lions even went 0-16 last year.
Pontiac, the Detroit suburb where the Silverdome is located, is even worse off. The 60,000-person city is in dire straits. It could no longer afford the $1.5 million upkeep on the Silverdome, which has been largely empty since the Lions left for their new Ford Field in 2002.
The city of Pontiac was named for an Ottowa Indian chief but became known as the home and namesake of the GM Pontiac, which was developed and manufactured there, providing decades of prosperity for the city.
But like Pontiac -- which post-bankruptcy GM is allowing to wither and die -- hard times have fallen on the city of Pontiac. In February, the state government declared a financial emergency in Pontiac, which had a $12 million budget shortfall, and placed the city into receivership. The city's unemployment rate is near 35 percent, which is just unimaginable.
This story gets even more bizarre. The Silverdome's new owner, Canadian real estate developer Andreas Apostolopoulos, mailed in a bid for the dome on a whim, when he saw an ad for building's auction in the back of a newspaper, according to this piece in the Toronto Globe and Mail.
According to the paper:
One more time: Wow.
-- Frank Ahrens WaPo blog
Yeah, that's how it is here. The freeway signs saying "Wecome to Michigan" should be amended with "Sorry."
We could take some comfort in being on the leading edge of what's to come, but people are mainly cashing those "Don't Hate Us" unemployment extension check bribes and abusing their substances of choice.
I feel the pain--grew up in Upstate NY and worked in a steel mill--
Listening to Embry on television (six years ago now... how time flies) is what finally got me to wake up to the madness. Turned me onto the gold bug sites and ultimately to ZH so I have to thank him for his plain, insightful, common sense analysis. He and Sprott are very refreshing to listen to in a sea of perma-bull mutual fund salesmen.