STOCKS – ACTION ALERT – BEAR – MARKET IN CORRECTION.
If you’re been following my recommendations, you know that I’ve been short or long inverse ETFs in the financial sector. I have been short JP Morgan, long FAZ (the triple inverse ETF for the financial sector), and short the financial ETF, XLF. So, the ‘surprise’ we received yesterday afternoon from Jaime Dimon at JP Morgan Chase comes as no surprise to me. As you know, I am no fan of JP Morgan or Jaime Dimon. My position is that JP Morgan acts the Fed’s right hand in executing its market manipulation objectives. Acting in behalf of their ‘client’, JP Morgan does the Fed’s bidding (dirty work) which includes intervening, as needed, in the European markets and suppressing the price of gold and silver by selling naked contracts what I’ve often referred to herein as the ‘phony’ paper market at the CME/COMEX. Jaime Dimon is almost a clandestine Fed Governor. Apparently, they (he) screwed up and incorrectly hedged their positions when executing instructions from Bernanke. When the light of day finally shines on all of this, it will the ammunition that will end the Fed as we know it. Ron Paul will have his victory. As you know, I support this and have been adamant antagonist since I read the landmark work by G. Edward Griffin – ‘The Creature from Jekyll Island’. As you know, Jekyll Island, Georgia was the location where the clandestine planning for the creation of the Federal Reserve occurred over 100 years ago. When Bernanke loses his job I nominate Ron Paul to be the interim Fed Chairman during the period in which it is dissolved. Jaime Dimon will need to be looking for a new job and a new partner. The system needs what I term an ‘enema’. Hopefully, this JP Morgan affair will be a step in the right direction in a desperately needed cleansing process – a process which I don’t think will occur overnight, but there is always a first good step in any worthwhile endeavor.
I remain positioned on the short side and we’ll take it a day at a time. We all know Bernanke and Geithner will try and pull a rabbit out of a hat and attempt to get these equity markets moving again to the upside to help re-elect our Marxist President. For the sake of the U.S., our religious freedoms, our economic freedoms and for the sake of our children, I pray he is handsomely defeated – though, frankly, Romney may only be the lesser of two evils. The SPX touched 1343.13 on Wednesday. My next downside target is 1320 followed by 1292 in the S&P 500 and we’ll take it from there.
If you’ve forgotten about how Iceland moved to solve its own financial crisis, I suggest you ready the short piece below at the end of this newsletter. Though I do not agree with all their actions, bold steps here in the U.S. somewhat along those lines is desperate needed otherwise we’re going to end up in the same place again and again. The first step has to be the dismantling of the Federal Reserve – its 100 years of tyranny and destruction must come to an end!
Let me share with you a short exerpt from Ben Bernanke’s bio as it appears in Wikipedia. I think you will find it eye-opening. It is part of the powerpoint presentations I give at varios speaking engagements.
“Bernanke is particularly interested in the economic and political causes of the Great Depression, on which he has published numerous academic journal articles. Before Bernanke’s work, the dominant monetarist theory of the Great Depression was Milton Friedman’s view that it had been largely caused by the Federal Reserve’s having reduced the money supply. In a speech on Milton Friedman’s ninetieth birthday (November 8, 2002), Bernanke said, “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna [Schwartz, Friedman’s coauthor]: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” Bernanke has cited Milton Friedman and Anna Schwartz in his decision to lower interest rates to zero. Anna Schwartz however is highly critical of Bernanke and wrote an opinion piece in the New York Times advising Obama against his reappointment to Chair of Federal Reserve.”
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GOLD – ACTION ALERT – BULL
Haven’t you noticed that when economic news, whether it’s related to the European meltdown or evening this morning’s JP Morgan revelation, gold and silver sell-off when presumably they should be rallying? Folks, this is the dirty work of the Plunge Protection Team acting through JP Morgan (and possibly others). It’s counter-intuitive. By attempting to knock down price by hitting the bids on the phony paper market (futures market), they are distracting attention away from what is rightfully one of only safe places for you money – gold and silver. Physical assets, folks! That’s the answer. When the financial system melts down again (and it will) think about where you want to keep your hard-earned savings. Do you trust the banks (like JP Morgan) who are basically speculators and traders and whose very existence depends on the Federal Reserve’s “printing press”? Do you trust brokerage firms like MF Global in the futures business or even household names in the stock brokerage business to be there when you need to withdraw your investment dollars? These are the questions you have to ask. What we’ve learned from the financial meltdown in 2008-2009 is there is no truly safe asset, but I feel a lot better holding a physical asset such as gold, silver, real estate (land), farmland or even your home over keeping assets in the slimy hands of Wall Street. My recommendation is to keep your assets (including currencies) clearly diversified among firms, among locations both domestic and foreign and category. Trust no one for more than you afford to lose. These are treacherous times even though the news is often manipulated or not reported to present just the opposite picture.
Meanwhile, gold and silver remain in a correction. I have been steadfast in my BUY signal even though I recognize the ‘powers that be’ may be temporarily successful in driving down prices. Why? Because they will lose big time and because ultimately surprises will be to the upside. The next big target (support) area is the December 29 low at 1521.80 in Gold and 26.08 in Silver. With the mining shares showing some decent upside action here, let’s see if the physical metals will chime in as well. Keep in mind a ‘May’ bounce may be nothing more than a ‘May’ bounce within the context of the bigger near term corrective cycle. New lows in gold (under 1521.80) will clearly generate further selling. I presume this is what Bernanke and his cohorts are hoping for. But, their strategy is two-pronged. Though they may drive it lower, they are also seeking to enlarge their holdings at lower prices. This, I believe, is one of the reasons China has temporarily played along with the PPT’s suppression scheme. Where could we be headed? Such a move could place gold anywhere from 1400 down to 1275. Not the best of outcomes, but one we psychologically have to be prepared for. On the positive front, should we cross back above 1792.40, I think the chances of then see new highs increases immensely with potential to first the 2200-2300 range.
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BONDS – ACTION ALERT – BULL
Despite the risk of higher interest rates down the road, I believe the perceived flight to safety will be the prevailing motivator over the near-term. Long-term, bonds are dangerous, so I only see them as a near-term positive.
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UPCOMING ECONOMIC RELEASES/MARKET EVENTS
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