U.S. Economy Headed For Disaster - QE3 Coming Soon

Or maybe not, but the "maybe not" means that people running our system are prepared to do something nefarious as they let the U.S. Government default, the stock market collapse and throw 90% of this country into serfdom.  Of course, we all DO remember Warren Buffett's famous Nostradamian prediction about the middle class being headed for serfdom, right?

Today the Institute for Supply Management reported that its manufacturing index had hit its lowest level in a year and it had the largest month to month drop since 1984  LINK.  Wall Street's brain trust, whose bonuses have been subsidized by the Taxpayer since 2008, missed their forecast to the high side by country mile on this metric.  Auto sales are also plummeting again, and GM's channel stuffing per zerohedge's nice chart is at an all-time high:  LINK.  To review the accounting on this, when GM ships a car to dealer, it records a "sale."  It makes no difference whether or not the dealer has a buyer lined up.  In fact, GM, or rather the Taxpayer courtesy of Obama/Geithner, actually gives the dealer the money to finance the "purchase."  So, not only were GM's sales for May below that of May 2010, but if the Taxpayer was not giving dealers the money to "buy" these cars, GM's sales would have fallen off of a cliff.  Talk about a Ponzi scheme...

What all this means is that it's collapse or print money time.  I heard that several are now calling for QE3 because the economy needs it.  But in fact, here's the pecking order for the next round of QE:  It will go FIRST to the big banks, SECOND to funding Treasuries, and LAST it will trickle down to the poor people and unemployed living off the Taxpayers.  They will be taking this transfer of wealth from the middle class and the descendants of the middle class, where "middle class" is defined as anyone not on foodstamps or unemployment welfare OR anyone not wealthy AND liquid enough to buy a Federal Congressman or Senator.

The precious metals have sniffed this out and both silver and gold ran higher after this morning's economic reports.  The ONLY thing keeping silver from blowing through the roof is the unfettered, unregulated, illegal paper-selling on the Comex by JPM, HSBC, et al.  Even many respected market analysts who, for the previous 10 years sneered at GATA's "conspiracy theories" and refused to acknowledge the extreme manipulation of Comex gold and silver, are now concluding and reporting this very fact.  Richard Russell the most notable among them.  And by the way, for all those drooling over Jim Grant's interview on youtube yesterday:  he's got turds for brains when it comes to precious metals analysis. 

Bubble-meter update - or should I say "anti-bubble-meter:"  Today the front section of the Denver Post had one full-page ad and one 3/4-page ad from TWO different entities begging the public to sell them their gold. The full-page ad was the back page of the front section, which is prime-time space.  These are not cheap ads to run.  And they will buy anything from bullion coins to cheapo 12-karat rapper-wear jewelry.  THIS is NOT the sign of a bubble.  It is a sign that smart money is working overtime to buy something cheap before it becomes dear. When it becomes dear, we will see ads begging the public to BUY all this gold and silver from those buying it NOW and those selling that gold/silver now will soon be left holding the massive liabilties being issued on their behalf by Obama and Congress, who in turn are handing the funds from the issuance of those liabilities to Wall Street. Capisci?  Got gold?  Silver?