Curried Wealth Building
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September 25, 2011
Issue 166  -  What Happened?
 
 
The powers that be are desperate to keep the wheels on the bus.  This past week showed the absolute frenzy of criminal activity that they will engage in to achieve their goals.  The idea that silver, a resource in short supply, could fall over 27% in one week is a non sequitor.  It doesn't jive with reality.  Did someone just discover a chunk of silver the size of house?  This is purely a paper driven exercise.  This has nothing to do with physical metal.
 
If you have physical metal, there is nothing to worry about.  This situation will correct and probably violently.  Until then, there is the pain of watching your assets sink.  If you haven't bought any physical gold or silver, now is your chance to buy at sale prices.   Don't treat this as a downer, try and acquire as much metal as you can.  The situation is WORSE now than it ever has been for the world financial system.  Does that sound like the time to sell the only true money left in the world?  Of course not. 
 
This is the same strategy that was used in 2008.  Take the metals down hard in the COMEX and hope it buys you some time.  Without this blatant takedown, we could be at $50 silver and $2100 gold.  This is only temporary and I believe the effect will be much shorter lived than in 2008.  Get ready for incredibly violent moves up and down.  They will not just let gold take them out.  They will keep fighting.  Use the lower prices to your advantage. 
 
They are carrying out this attack with computers.  Computers so fast that it is impossible for humans to keep up or even watch the trades.  If you were watching the trades in real time it would be a blur.  These computers are controlling things.  They are the man behind the curtain.  The common term for them is high frequency trading.  More appropriately, they should be called high speed criminal trading.  Except that the government is in on the game with the Fed.  Here are more hijinks recently discovered where these trading machines of doom made a trade in the FUTURE:
 

It's Official: HFT Breaks Speed-of-Light Barrier, Sets Trading Speed World Record

Submitted by Tyler Durden on 09/20/2011 11:03 -0400

Submitted by Nanex

Adds a new unit of time measurement to the lexicon: fantaseconds.

On September 15, 2011, beginning at 12:48:54.600, there was a time warp in the trading of Yahoo! (YHOO) stock. HFT has reached speeds faster than time itself. Up to 190 milliseconds into the future, or 0.19 fantaseconds is the record so far. It all happened in just over one second of trading, the evidence buried under an avalanche of about 19,000 quotations and 3,000 individual trade executions. The facts of the matter are indisputable. Based on official exchange timestamps, there is unmistakable proof that YHOO trades were executed on quotes that didn't exist until 190 milliseconds later!

Millions of traders depend on the accuracy of exchange timestamps -- especially after bad timestamps were found to be a key factor in the disastrous market crash known as the flash crash of May 2010. We are confident the exchange timestamp problem has been completely addressed by now: the SEC would have made sure of it. It's not like adding accurate timestamps is rocket science, or even considered a difficult problem. Based on recent marketing materials, the exchanges are practically experts on measuring time. And with hundreds of millions in annual data feed subscriptions paid by the same subscribers expecting quotes with accurate timestamps, there is no shortage of funds to make it happen.

So we can be certain the exchange timestamps were accurate, which means that HFT has truly entered the era of the fantasecond.

But let us suppose for a moment that in reality, quotes became queued (delayed) and were timestamped after leaving this queue. After detailed analysis of the UQDF data feed (see chart below) that transmits this information to traders, we find that the traffic rate for both the total of all output lines and specifically multicast line #6 which carries YHOO, were both well below peak rates. So it doesn't appear there were any capacity problems which have always been an excellent indication of feed delay.

This raises a few thorny questions.

Does this mean there are far more delays than we previously thought? Is there a delay every time we see an explosion of quotes in one stock? Because that sort of thing happens. All the time.

Regulation NMS is pretty clear that direct exchange feeds are prohibited from having a speed advantage over the UQDF data feed. UQDF computes the NBBO after all. So how does one ensure trade-through price protection if the price being protected hasn't even occurred yet? The NBBO lies at the heart of Regulation NMS (Reg. NMS) and is the key concept that assures investors are getting the best price when buying or selling stocks.

Maybe it would be better to just fantasize about fantaseconds after all.

 
Let this sink in for a while.  Trades occurring in the future.  Just what the hell is going on here?  Theft.  Plain and simple.  These cretins are being allowed to game the system to make millions.  They probably got rich over the last week as the "boys" let everyone know a shake down was coming. 
 
Of course this is only temporary.  How long it lasts is a big unknown but I would be surprised to see it last as long as it did in 2008.  Gee, I don't remember this happening in 2008:
 
 
That's right a whole digital gold exchange just shut down!  Hmmmmm....wonder why that is?   The real truth is that people are buying this artificial drubbing of the metals.  They are setting this up for some crazy money printing and must want to start from lower levels for fear they go parabolic.  Here is some input from GATA about demand in other countries:
 

And if you don’t believe me, read these excerpts from Ed Steer (Casey Research, GATA), about PHYSICAL demand in Britain and Thailand:

"My coin dealer told me today that he just does not understand what is going on with the gold price. He opined that the Central bankers are unlikely to succeed if they are responsible for this take down. He is just seeing too much physical demand at the moment. He is turning away enquiries from abroad. The physical supply is disappearing fast, although he managed to find me some sovereigns (these tend to be tax efficient for us in the UK as sovereigns are still legal tender and have been since 1847). I have another coin dealer I occasionally use, he had only 8 gold sovereigns and 4 half sovereigns. The only metal he has to sell at the moment are Silver Eagles and Krugerrands. He tends to sell both silver and gold bars as well, but he has none of those available either. He is out of all other products."

The other is from U.S. expat Bill Goodrich from Hua Hin, Thailand...and this is his report.

"Today I was down in the gold district in Bangkok to buy some bullion on this little pullback...and there was no physical bullion to be had. All the gold shops were packed...and the only thing you could do was pay for an order that would be delivered in 10 days to 2 weeks. I have never seen a lack of physical bullion in this district ever before. There is physical gold on display, but it is all jewelry, which has a much higher margin than just the bullion bars that everyone was wanting."

"At least in this part of the world when gold drops even this little bit, the demand is astounding...and people are out in droves buying for cash. Here, every trade is physical gold...and all the transactions are cash on the barrelhead, so I have no fear that gold will really get a chance to pull back very far at least if the sentiment all over the Asia Zone is the same as it was here today."

 
People are wising up and actually buying the dips.  Most times people are afraid of falling prices and now it's the opposite.  This is a turning point for the metals and now we can move solidly into the massive runup phase.  This may take awhile to get started, but once it begins I think it will be quite amazing.  3 digit silver and 5 digit gold are no brainers. 
 
Just this past week:
 
Sprott Temporarily Runs Out of Silver
 
With gold and silver prices plunging, King World News sources are reporting massive physical demand.  One example is Sprott Money, which completely ran out of physical silver.  Larisa Sprott, President of Sprott Money told KWN, “It’s been pretty wild, especially the last three or four days because of the price drop.  People are trading in their paper money for gold and silver, but we are seeing more purchases of silver net.  In fact the buying has been really skewed in favor of silver, there is tremendous demand.”
 
Larisa Sprott continues:

 

“We have completely run out of physical silver, so we are temporarily out of stock.  You have to remember, Eric, that like Dubai, we only sell product that is on our shelves, that we have in stock.  We do expect a shipment later today, which will allow us to restock and give us more product to sell.  

 

Our clients are very savvy, sophisticated and when a price drop of this magnitude occurs, they step in and buy very aggressively.  Right now there is dramatically increased volume and what we are seeing is buying across all spectrums in terms of the size of the orders.

 

To clarify, we may have some client buying a single tube of silver maples, while at the same time, another client is buying $5 million of 100 ounce silver bars or gold maple leafs.  The bottom line here is the drawdown in price is creating a tremendous amount of demand.” 

 
The physical market is where the action is today.  There is massive demand for the physical.  Take advantage of this GIFT to purchase more, because these headlines don't exactly make me think that everything is going to be ok:
 
 
"UBS' Euro Doom And Gloom Team Releases Sequel: "The Eurozone Sovereign Crisis Has Entered A More Dangerous Phase"
 

"Global economy weekahead: From a soft patch to quicksand"

 

"Fast-food deals go into overdrive as economy sputters"

"The world economy ...Gloomier and gloomier"

"Combined sales of new and re-sold homes worst in half a century as economy weighs down market"

 
 Those don't exactly scream, "Crisis over!"  Then there is this trader laying it on the line with incredible bluntness: (thanks to Hugh)
 
 
 
So here is a guy telling the truth that Goldman Sachs "rules the world," and the anchors are stunned.  Maybe they don't know the truth or maybe they don't/can't repeat it, it doesn't really matter.  The world economy is sinking.  It will first dive in Europe which is why this guy says that Treasuries are "Safe."  Trust me, they are far from safe.  Especially when the guy in charge of the economy is either a dunce or a tool:
 

$200K Per Job? Timothy Geithner Says White House Jobs Plan Is Still a Bargain



By BEN FORER

Sept. 26, 2011

 
Treasury Secretary Timothy Geithner didn't dispute a
Harvard economist's estimate that each job in the
White House's jobs plan would cost $200,000, but
said the pricetag is the wrong way to measure the
bill's worth.

And he also pointed out, in an interview today with
ABC News' David Muir, that there is no other option
on the table for getting the economy moving and
putting more people back to work.

"You've got to think about the costs of the
alternatives," Geithner said when asked about Harvard
economist Martin Feldstein's calculation that each job
created by President Obama's American Jobs Act
would cost taxpayers about $200,000.

"If government does nothing, it does nothing now
because they're scared by politics or they want to
debate what's perfect, then there will be fewer
Americans back to work, the economy will be weaker,"
he said.

"We can borrow money for 10 years as the
government of the United States because people have
confidence in this country at less than 2 percent," he
said. "The responsible path now is to take advantage
of the unique position we're in as a country. People
have a lot of confidence in us. Let's take advantage of
that now to do things that help growth in the short-
term."

Geithner told Muir he believes there is a "very good
chance" the Jobs Act will pass because the proposals
have seen bipartisan support in the past and the cost
of inaction is far too high.

"If the alternative plan is for Washington to do
nothing, that's unacceptable," Geithner said. "If the
alternative plan is to sit there and say we're going to
cut our way out of this by just cutting spending, that
would make the economy weaker. Or we're going to
sit here and just complain about regulation. ... That
will not do anything to help the average family now
still suffering so much from the crisis."
 
At the same time as Geithner is trying to help spur the
U.S. economy, he is pushing European leaders to act
quickly in the face of a looming crisis.

After a generation of high government spending,
Greece is on the brink of bankruptcy and if it
collapses it could take down other European
economies and leave American banks with $41 billion
in losses.

In the last week, the average American's 401k has lost
$7,000 because of Europe's instability.

"It hurts people very directly and very quickly when
stock prices fall and the value of their pensions fall,"
Geithner said. "[Greece] borrowed a lot and they spent
too much. ... [I]t's going to take them years and years
to dig their way out of that. ... I think they have time.
But not very much time."

Even in the face of a stagnant economy at home,
Geithner said there are signs that things are turning
around.

"If you talk to companies around the country like I do,
you'll see that something -- something very
promising is starting to happen right now," he said.
"Companies are starting to relook at where they
produce, American companies, companies that moved
 
things to Mexico and China decades and years ago
are starting to rethink it.

"With all our challenges as a country, most companies
that have the opportunity to produce or to compete
around the world, they'll still say it's better to be in a
company headquartered in America and we still have
the strongest fundamentals," he said.


 
What a complete idiot.  $200k a job is a bargain!  This is a guy who has become completely political.  These Washington idiots are driving us over the cliff.  I see the future and it is a duplicate of this:
 
 
 
Prepare.  Take this opportunity to buy metals low.  Please.
 
Positions
 
GORO  (closed $18.42, down $4.18, average price paid $6) 
 
The relentless short selling is tiring.  The only thing to do is wait them out.  Not sure what they have planned but I doubt if they are finished.  In the end this stock will be a big winner.
 
Mexus Gold  (closed $.15, down $0.01, average price paid, $.22) 
 
Alexco Resource Corporation -  AXU  (closed $7.23, down $1.67, recommended at $7.90)  
 
Stocks    (Current status, out, sold on March 18)
  
Physical Gold  (Closed $1690, down $132,  average price paid $395)
 
Physical Silver  (Closed $30.99,  down $9.67,  average price paid $5.31)
 
I'll close this week with a funny music video that will cheer you up if your portfolio doesn't.  Have a great week!