International Forecaster Weekly

Gold Screams Past 1000

Yellow fever is upon us, Yen rise is response to gold, Gold price suppression cartel still working away, meanwhile the dollar is in free fall, some have liquidity problems, more war diversions coming, consider the security of your bank deposits

Bob Chapman | March 15, 2008

As spot gold went screaming past 1000 on Friday, to close in the aftermarket at an all-time closing high of 1002.50, the yen went ripping through 100, to as low as 99.2560 as of 3 pm EDT just as the COMEX closed, which is a 12-year high against the dollar.  If you wanted proof in spades that the yen is being used to hit precious metals by causing the carry trade to unwind and create a giant margin-call inducing liquidity drain, here it is "in yo' face!"  The yen has been used continually since the 2006 spring rally to put yen-hits on precious metals.  The repeated eruption of destructive solar flares from the Yen Death-Star that have been induced by the psychopathic financial engineers of the cartel is the root cause for the many declines in the stock markets, which continually develop a case of "yellow fever" every time we have a gold rally.  The cartel always waits for the release of bad news (and what a very short wait this has become, we might add) so they can play their yen game while the bad news provides the excuse for the rapid declines in the stock markets.  The bad news is used as cover for the yen-hit.  This in part explains some of the huge losses in the Nikkei, which have been used to generate yen rallies by sending traders in oriental markets fleeing to yen money markets and yen-denominated Japanese government bonds.  The bad news in the US is also used to create the Nikkei crashes because what is bad for the US is bad for one of its largest trading partners, Japan.  That way, the yen rallies look like the natural outcome of stock market losses, thus obviating the need for direct currency intervention, which would make the manipulations look too obvious.  Although the economic news we are getting is horrifying indeed, the PPT is capable of far more support than it has been showing during gold rally periods because the cartel wants the stock markets to perform badly to create liquidity drains to hit the monetary metals and to prevent their related stocks from confirming their rise.  Gold suppression is JOB ONE at the Fed, and the cartel will not hesitate to hit stock markets to slow rallies in the monetary metals down as much as possible.  This is because the monetary metals, if unsuppressed, would totally and wildly explode and this would sound the economic catastrophe alarm, thereby exposing the fact that our economy over the past two decades has been completely destroyed by the Illuminist sociopaths.

During these orchestrated yen-hits, the PPT in the US and its counterpart in Japan act as a backstop to prevent a total stock market collapse as the liquidity drain that is caused by the sudden unwinding of the carry trade ravages the margin accounts of carry traders.  The crash produces margin calls which must be met quickly by the sale of liquid assets to cover, and that has largely included precious metals, at least until recently. The large specs have heeded our warning and have increased their trading of protective derivatives, getting it down to a science.  Even the short-squeeze rallies initiated by the cartel just before the expiration of various protective derivatives, which are aimed at reducing the value of very liquid protective derivatives being used to protect metals positions, are being systematically hammered by the large specs just prior to expiration.  Also, the free-falling dollar and the piddling interest rates on short-term treasury bonds, which are both being reduced even further as the Fed drastically drops its funds and discount rates, has sent proceeds generated by the liquidation of assets during crashes and by the de-leveraging of insanely over-leveraged positions held by banks, broker-dealers, pension plans, insurance companies and hedge funds, into precious metals and commodities in ever-increasing percentages.  After all, why place your funds in declining or under-performing assets while inflation continues to rampage when you can place them in precious metals and commodities, which are screaming ever upward, sometimes even at parabolic rates. The yen weapon has now been completely neutralized, and produces little more than a slowing effect on the precious metals.  The cartel knows this, and that is why the open interest in gold futures has been under 500,000 contracts since February 1.  This past Friday, March 14, was the first time since February 1 that the 500,000 level has been exceeded, and then only barely.  The stock markets have suddenly developed another severe case of "yellow fever" this week, with the only exception being the phony short-squeeze rally that was used to make it look like the Fed's 200 billion rescue of Bear Stearns and other troubled investment bankers and broker-dealers was positively received by the market and to add some market-crashing power that was immediately used the next day to slow the gold rally.  Note that Bear Stearns, whose two subprime hedge funds were among the first casualties of, and detonator buttons for, the subprime and credit-crunch debacles, has been in drastic trouble for many months, and now very suddenly, as gold starts to rally past 1000, the bad news about their liquidity problems is released and the rescue effort is undertaken as the markets crash and the yen goes ballistic.  How very convenient.

We are afraid that the case of "yellow fever" which stock markets have just developed may be a terminal one because this gold rally is far from being over.  In fact, it is starting to accelerate.  The market action we have been witnessing over the past several weeks where gold sets an all-time high and then pulls back for a short time, consolidates, and then repeats this action, which is characteristic of its most powerful rallies, has been occurring like clockwork.  There is not a single negative fundamental for the precious metals, and the bad news emanating now on a daily basis is simply horrendous.  It does not get any worse than what you are witnessing right now.  Our economy now resembles the aftermath of a thermonuclear explosion.  We are just waiting for the dust from the mushroom cloud to dissipate.  And when the dust clears and the reality hits home, look out below!  Precious metals and commodities are now the only place to be and all the pros know this.  They are waiting for the phony PPT rallies and then selling into the manipulated strength, with everyone trying to beat everyone else out the door.  This is ugly beyond description.  The cartel wants a blow-off top before the election so they can use Project Turquoise, dark pools of liquidity where stocks and bonds are traded out of public view, to bail out of their huge paper positions into commodities, but at the rate things are going now, they may never make it.  The stimulus package may give a one or two month boost, but after that we see nothing but trouble.  They are hoping that the IMF gold sales threat will tamp gold down so they can weaken the yen and push the markets back up with carry trade liquidity without sending gold into outer space, but the precious metals are much too powerful and there are too many factors in their favor to allow for anything but the shallowest of dips.  Consistent with this maneuvering, they are also building a large short position in gold futures for June.  They must be gluttons for punishment.  The precious metals are no longer seasonal to the extent that they once were.  They have become lifesavers for the beleaguered financial community and demand will continue unabated until we go into the Very Large Depression after all the damage has already been done and we get into cleanup mode.  Precious metals and resource stocks have been rallying despite cartel suppression as the general stock markets have been hammered.  This means that these stocks have now separated and will go their own way from this point forward.  YOU MUST NOW GET OUT OF ANY AND ALL NON-RESOURCE STOCKS AND ANY AND ALL DOLLAR-DENOMINATED BONDS AND TREASURIES, IF YOU HAVE NOT DONE SO ALREADY - AND WE MEAN NOW!!!   Be patient, invest your proceeds in gold, silver and their related stocks and/or in Swiss franc-denominated Swiss government bonds, all based on our recommendations, and wait for the explosion.  We absolutely guarantee that it is coming just as sure as God made little green apples!

Our economy has been trashed beyond recognition.  We hear war drums beating in the background as the Illuminati look for a diversion, possibly in Serbia, Iran, Syria or Lebanon, from all these economic problems and/or for a reason to implement martial law and suspend the November elections along with our Constitution.  Another 911-type event here in the US is also a possibility.  Oil has hit an all-time high of 111 and is looking to go higher while virtually all food commodities and metals of all kinds hit all-time or multi-decade highs.  Any war with a country in the Middle East will send oil to 200 and beyond.  Inflation is at 12%, unemployment at 14% and M3 in excess of 16%, which bodes inflation of 15% to 20% before year end.  As this happens, we get another whopper from the Bureau of Lying Statistics that prices were unchanged and inflation was flat for the month of February.  The shameless gall of these people.  They must think we are mutant morons.  This latest Paul Bunyan tale has been told to show the very gullible and incredibly naive among us that the recession (excuse us, we forgot our sense of political correctness for a moment, for we meant to say "the shallow and brief economic downturn" - as our eyes roll over in their sockets) is causing prices to "moderate" and that it is therefore OK for the Fed to cut big without exacerbating inflation in order to institute their new system of welfare for the elitist rich as everything is monetized, stimulated, auctioned off, substituted, bailed out and/or nationalized until our national debt freaking doubles or more!  This is the living, freaking end.  February inflation was flat.  Now we have heard everything.  We have seen and done it all.  If we hadn't heard Jimmy Rogers saying that the Fed should be shut down, that Bernanke should resign and that investment banks and brokers should be allowed to fail, we would have thought the whole world had embarked on a mushroom-induced, psychopathic pipedream.  Expect a whopper cut on the 18th of this month.  The Fed could skip right down to 2.0% instead of 2.5% or 2.25% as the banking and credit market situations have reached levels so dire that a complete implosion could be imminent at any given moment.  Who knows what could happen at this point?  There is no transparency or confidence left in the markets because a huge number of institutional investors and traders around the world have been screwed and defrauded beyond anyone's comprehension and now the Fed is going to substitute its good paper for their bad paper to the tune of 200 billion as everyone tries to pretend that the losses don't exist!  YOU MUST ALL FEEL VERY REASSURED THAT YOUR BANK DEPOSITS ARE SECURED BY BANK RESERVES THAT TO A LARGE EXTENT CONSIST OF BORROWED MONEY SECURED BY OVERVALUED, DEPRECIATING, ILLIQUID ASSETS AND THAT THEY ARE INSURED BY THE FDIC WHICH WILL BE IMMEDIATELY BANKRUPTED BY THE FIRST ROUND OF BANK FAILURES.  HALLELUJIAH!!!  After Helicopter Ben gets done with his money drops, it won't matter anyway.  You'll be using your Federal Reserve notes as fuel to heat your house! This is truly unbelievable!  Gold and silver are headed for a wormhole that leads into inter-dimensional space!