Wednesday, June 1, 2011

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?


  1. Scam,sham,fraud, etc...people are either not reading this stuff or don't care...pass it about disasters!

    The Continual Screwing of Jefferson County, Alabama

    It has been established in various courts that bank officials literally bribed Jefferson County Commissioners to refinance using outrageously expensive interest rate swap deals, but despite a number of convictions of local pols like former Commissioner Larry Langford (who got 15 years for accepting bribes), Jefferson County will still be stuck paying this tab for the next gazillion years.

    All of which sucks, of course, but the news keeps getting worse. The House Financial Services Committee has just voted to delay the scheduled implementation of reforms in the Dodd-Frank bill that would limit the ability of banks to pull Jefferson-County style scams in the future. Among other things, the new rules would have required banks to act in the best interests of their clients, and disclose daily pricing information about swaps, making it harder for banks to gouge clients.

    That was then. Now, Bachus is the driving force behind this latest move to delay reforms. Wonder why? Just look to see who happens to be the top contributor to Bachus's campaigns for his career: J.P. Morgan Chase. Bloomberg elaborated on Bachus's ties to Wall Street, describing him as the third-biggest recipient of Wall Street cash in the House:

    During his two decades in Congress, Bachus – like Frank, his predecessor as chairman – has nurtured ties to Wall Street donors who have poured cash into campaign chests of both Democrats and Republicans. He has received more than $7.1 million from political committees of finance, real estate and insurance companies and their employees, according to the Center for Responsive Politics, a Washington group that tracks campaign donations. That’s more than any House member since 1989 aside from the Republicans’ two top leaders, Speaker John Boehner and Majority Leader Eric Cantor.

  2. Carnage in the XLF today almost brought a tear to me eye, so pretty.

  3. june 2 2011, could it be a big day in history? I frame it as a question, there are rumblings, there are vibes, these people certainly dont roll over and spread.

    This thing CANNOT GET FIXED AGAIN, we are totally borrowed up, get some cash, banks can close.

    Oh, pull yourself together.