If you want to discern the next big turning point in the tide of global affairs - look as far away as possible from the present seats of global power - The Privateer paraphrasing Felix Dzerzhinsky, Lenin's head of the secret police and expert global affairs analyst.
As The Privateer's Bill Buckler points out, "Cyprus now is a valuable window into what the world is going to face at some point in the future."
It was announced that the size of the bailout for Cyprus is now 23 billion euros. That's up from 17 billion euros. Originally it was set to be 10 billion euros. While most people could probably care less or fail to see the relevance, the fundamental banking problems that got Cyprus into trouble are the very same banking activities practiced by all big banks globally - and to the extreme in the U.S. and Europe.
The amazing thing is that no one even flinches at the fact that the Federal Reserve is currently printing up and injecting $85 billion per month into the U.S. financial system - 66 billion euros, or 3 times the amount of the Cyprus bailout on a monthly basis . So you have to wonder what's going on beneath the well-polished veneer of economic reports being fed to us by the mainstream media.
It just so happens that I have some data that shows the U.S. economy is falling apart:
Retail sales for March were reported today: off a cliff - unit volume sales seriously declined if nominal sales were down .4% and .2% after gasoline is stripped out. January retail sales revised from +.2% to negative .1%. The consumer is disappearing.
Consumer confidence plunged. The sub-indices did absolute cliff-dives. The miss vs. expectations was the largest miss in history for consumer confidence.
Housing sales declining now in most regions. JPM and WFC reported their earnings today. Below the headlines they were a disaster. Net interest margin is declining and has been for several quarters for JPM. WFC is the largest home loan lender now - it's revenues from home loans has dropped 15% year over year and 12% vs. last quarter - how can that be if housing is truly recovering?That's what's happening. It's going to get ugly this summer and it is highly likely - just like the bailout bogey for Cyprus keeps getting larger - that the Fed will have to once again increase the amount of money being printed and injected into the banking system. De facto, the Fed is indeed bailing out the U.S. banking system right now. The problems that hit in 2008 were never truly addressed - just papered over. And now they are bigger and more problematic then in 2008.
Anyone happen notice that the U.S. is escalating the "sabre rattling" going on between the U.S. and North Korea? Now all of a sudden the Government has decided that North Korea's nuclear capabilities are more sophisticated than yesterday. Kind of reminds of the storyline about Saddam Hussein hiding all those weapons of mass destruction somewhere in the desert. I guess the 50,000 troops still stationed in Iraq are still over there looking for them.
This current activity in the precious metals market is 100% the product of the paper market manipulation. The price declines occur after Asia closes down every night and right at the U.S. paper/electronic market opens. China imported 100 tonnes of gold into the country in February. That's just gold we can track being reported through Hong Kong. Last night alone 26 tonnes were delivered on the Shanghai gold exchange.
Today is a capitulation day. Paper gold and silver products - GLD/SLV - are trading currently in volume at 5 times and 4 times their respective 3 month average daily volume. Go have some fun this weekend and don't think about the markets. If what I think is coming at us really comes at us this year, it will be a lot harder to have fun in the future.