Upon Further Review

The bottom line is that the money needed to bail out Europe and to fund America’s spiraling debt and future unfunded obligations is in the ten of trillions. IT DOES NOT EXIST. It has to be created by printing money in massive quantities, and despite all the rhetoric you will hear against such policies, in the end it’s the path of least resistance. Printing money is an invisible tax on savings, much easier to initiate, than, say, raising taxes or cutting back on services and entitlements.   - Frank Guistra, founder of Silver Wheaton

Here's the link for the source of that quote, it's a very good article on gold and negative real interest rates:  LINK 

Remember how "jiggy" everyone got over the reports of incredibly robust Black Friday weekend sales?  Recall that those initial reports were based on subjective measurements such as "foot traffic" recorded at malls.  Well, the retail sales report released for November today came in well below the Wall Street Einstein analyst consensus forecast of .6%.  In fact, it is likely that retail sales for all of November may have gone negative had it not been for the very heavily price-discounted and advertised push for Black Friday weekend sales.  Here's the LINK  Even more foreboding for the economy, a poll out last week of consumers suggests that the majority of people have already made their holiday purchases for the year, suggesting that the bounce we get the week for Christmas will likely be a lot less than expectations and initial hyped-up indications.

And here's another key economic indicator that needs to be further reviewed.  The existing home sales report - a well-spun, highly massaged data series published by the hyper-promotional National Association of Realtors -  will be downwardly revised going all the way back to 2007.  Hmmm.  This particular economic report in the last few months has been giving many "hope" that a rebound in the housing market is developing.  However, I have noticed - because I tend to read the whole news release and not just the headline plus the first few sentences - that the NAR chief economist has actually been uncharacteristically demur in the comments he issues that usually get buried toward the bottom of the press release.  Now we know why.  As you'll see in this news release, which I have not seen anyone mention, especially in the mainstream media, the NAR issues a well-spun "cover" explanation for the fact that their systems have "double-counted"  home sales in many areas:

The NAR said the "up-drift in sales projections developed over time between the fixed model for calculating sales rates and the actual marketplace, including growth in multiple listing service coverage areas, geographic population shifts, a decline in for-sale-by-owner transactions, some new-home sales trickling into MLS data and some individual sales being recorded in more than one MLS." 

Here's the LINK  Obviously, they don't use the term "double counted" in that explanation but that is what that convoluted statement says.

With regard to the opening quote above, I have been wondering now since the summer how the U.S. Government is going to find buyers for the - at minimum - $2 trillion in new debt issuance it will have to do this fiscal year.  Why do I say $2 trillion when the published deficit forecast is something like $1.8 trillion?   Because I saw a report last week - sorry I don't have the link - that said that the Government is already running behind forecast in tax revenues and is already running above estimates in deficit spending.  The former metric - tax revenues - is black and white evidence that the economy is much weaker than is being promoted by Wall Street, politicians and mainstream media.  

But that said, who the hell is going to buy all the new Treasury debt?  I'm not.  I wouldn't touch a Treasury or muni bond even if I had a gun held to my head.  It sounds like China isn't interested in doing that either.  The answer is that one way or another the Fed is going to be the buyer of last resort.  And that means a lot more QE.  More than is already being floated by those who know that the Fed is going to start buying several hundred billion in mortgage paper soon. 

And THIS is why the price of gold is weak right now. The paper money promoters do not want gold moving higher going into the roll-out of big money printing programs in Europe and here.  There was a report last Friday from a European media source that the Bank of England and the ECB were selling gold.  They retracted that report yesterday but it turns out that is it half-true.  It turns out that these two Central Banks were likely "leasing" gold out to member banks in order to enable these banks to raise much-need liquidity without having dump crap assets that have little or no bid.  How do we know that the CB's were leasing gold?  Take a look at the lease rates for gold, which can be found here:  www.kitco.com  You'll see that there are two distance downward spikes into negative territory.  This indicates that Central Banks are making a large supply of gold available for lease to member banks.  Imagine that, borrowing gold AND getting paid a small rate of interest to borrow that gold so you can sell it into the market place and use that money to pay your bills...  

central banks stand ready to lease gold in increasing quantities should the price rise.

That quote is from Alan Greenspan's testimony to the House Banking and Finance Committee on derivatives from 1998.  Here's the LINK  I threw that in there for anyone who doesn't believe that the gold market is manipulated.