Quantum Pranx

ECONOMICS AND ESOTERICA FOR A NEW PARADIGM

Posts Tagged ‘implosion of global bond markets

Printing and Propaganda

leave a comment »

From Mike Krieger of KAM LP
Posted May 19th, 2011

Desolate and without purpose
Radiating from so many septic sources
Forming the fabric of a wayward people
Disappearing as the vestiges of our past

Scratched like tartan into virgin soil
A substrate for progress and disarray
A spreading network of broken dreams
Searching for a thoroughfare to take us away

Just a little tale from the streets of America
Sparkled promises paved with pathos and hysteria
Trenchant, weary native sons
Step back, step back
And see the damage done
Shoot straight to the horizon
The streets of America

– Bad Religion, “Streets of America”

A nation that is afraid to let its people judge truth and falsehood in an open market is a nation that is afraid of its people.
– John F. Kennedy

AS I HAVE BEEN SAYING FOR THE PAST SEVERAL YEARS, the misguided Keynesian witch doctor central planners unfortunately in charge of our economic fate are attempting a grand experiment on us based on completely insane and nonsensical theories that have no chance at success. These clowns claim to have all sorts of “tools” but in reality they have nothing. When faced with a complete credit collapse of proportions never seen before in recorded history there were and are only two “tools.” It’s the two P’s: Printing and Propaganda.

While I have written about both of these “tools” before I am going to focus on the propaganda part today since it is the most applicable to the current state of the financial markets. We all know by now that the centrals planners believe the tail wags the dog. So the economy doesn’t lead to higher stock prices but higher stock prices will lead to a better economy. Insane? Absolutely. Is it their religion? 100%. The other important thing for investors to be aware of now when they are comparing the current state of affairs to what many lived through in the 1970’s is that the central planners have learned some lessons. What we must always remember about central planners is that they will never renege on their core philosophy which is that an elite academic and political class in their wisdom are better stewards than free humans interacting in a marketplace.

That said, most people do not share their worldview for obvious reasons (who wants their lives micromanaged?) so the trick of the central planners is to micromanage your life while you think you are in charge. As Goethe said “None are more hopelessly enslaved than those who falsely believe they are free.” He didn’t just make up this clever quote, it is a tried a true method of the most successful control systems throughout history.

So even the brainwashed masses out there understand that price controls were tried in the 1970’s and failed. We also know why. Therefore, the last thing the current group of central planners will want to do is announce price controls. That doesn’t mean they don’t attempt them anyway. They have been rigging stocks in the United States consistently for the past two years and most people get this and accept it as a part of the current state of disunion we are in. However, as I wrote last week we have now entered Phase 2.  This was represented by the raid on commodities.

A tried and true strategy that TPTB have used in precious metals for years has been to create such tremendous volatility in gold and silver and especially the shares that most investors stay away since they can’t stomach it. This strategy is now seemingly being employed to a much wider spectrum of commodities, hence my warning on trading futures last week. The entire game was perfectly summarized by a quote in the most recent 13D report where it was stated:  “Unfortunately, this battle between finding a safe haven and the authorities’ desire to render it ‘unsafe’ is only in its earliest stages. Our mantra since 2007 – governments can and will do anything to survive.”

The Bernank Bluff    

So part of the propaganda “tool” used by the central planners is the manipulation of financial markets, which seems to increased in emphasis in recent weeks. The other consists of outright lies and disinformation. Put yourself in The Bernank’s shoes for a moment. This guy loves printing more than Hewlett Packard. He is despondent beyond belief that the markets and an increasing amount of financial commentators have criticized his precious QE insanity. Meanwhile, the economic data is starting to roll over and housing looks set to launch into another spiral lower. So what is a Bernank to do? Bluff the heck out of the markets. He knows that the only way he can have cover for his printing party is to smash commodities because the rise in commodities is the biggest point of contention amongst the masses.

Read the rest of this entry »

The Middle East is lost as gold, silver, oil rocket higher

leave a comment »

by Roger Wiegand
Editor, Trader Tracks Newsletter
Originally posted Mar 23 2011

Since origination of our Federal Reserve in 1913, banker-controlled dollar devaluation has been ruinous.

When a long list of really bad stuff piles-up over several years the ending is beyond ugly. We suspect the crack-up-boom ending is near as this fundamental list has grown way too long and those allegedly in charge are way beyond stupid as to potential outcome. Geopolitics was so mishandled it appears deliberate.

Since the Napoleonic Wars when the Rothchild’s lent cash to both sides, crooked bankers have been busy planning the final solution for a one world government power using one currency. While this nefarious plan has worked so far, we have to wonder how it ends in America with millions of guns, super angry citizens and global banks holding treasury paper as valuable as potty tissue. How lovely that their own toxic paper takes them down.

The bond-credit-currency-confidence-games end when confidence leaves town.
We think it went away earlier this year.

Where’s the Money? Money is the real stuff made from commodities, commodities themselves, and hard asset manufactured goods. Play money is all the fiat currencies and bonds produced from and backed by nothing. Even some stock markets are play money.

As we’ve written several times lately in Trader Tracks, the list of naughty stuff is a mile long and growing. Some of the more critical problems are:

Credit:

In our view government credit for nations, states, municipalities, and that of most private, commercial, and citizens, has been severely damaged and in many cases irreparably damaged. The QE2 continuation digs the hole deeper and we think the end is in sight when former buyers of USA paper quit buying. In many cases buying has already either slowed or stopped. Bond markets are damaged and being further damaged by the printing binge of Bernanke and Geithner. We are not alone. Other nations are doing the same thing in varying amounts. Budgets are shattered and in most cases there is little hope of full repayment. No bonds; no system. As we write today, Portugal is on the brink.

Food:

There has been no major improvement in food growing, crops or farm management in the past decade. Yet, over one billion new mouths were born and must be fed. Next, Asia that formerly existed on a modest diet, is demanding up-grades in most all food groups because they can afford it. This imbalance appears to hit the world food system this year as weather is not cooperating and grain supplies are way too low. One US grain analyst said we had better have a big corn crop this year along with wheat or, we are into major problems with prospects of rationing. With USA corn reserves at a 37 year low, I suspect rationing is inevitable with higher prices; either in 2011 or 2012.

Energy:

Energy production and demand has been fractured with nuclear problems in Japan, disruptions in the Middle East and lack of a coherent energy policy in America. Crude oil is now firmly supported at $104 per barrel and our forecast for 2011 is much higher on forthcoming shortages and new inflation. USA refineries are shrinking in number as it costs $6 Billion to build a new one, and operators can’t get permits to build them, and refinery profit margins are too small to match investments. Consequently, the US is purchasing about 35% of its refined unleaded gasoline demand from imports, with fuel arriving on ships daily. In our view, big global producers prefer to buy out wildcatters and not take drilling risks. Next, they also prefer to tap foreign oil sources, first leaving domestic reserves in the ground for later production. This creates a higher risk for America, being dependent on others; particularly geopolitically unstable others.

Read the rest of this entry »