Larry: gold and silver at important test point.

The latest from Larry is that if gold holds above 1,278 and silver holds above 18.18 then both gold and silver are ready to move much higher. But, if these PMs drop below the cited support, then gold will drop to 1,178 and silver to 15.

Fitzwilson: Comments on economic trends.

Fitzwilson noted what I have noted a while back: "As investors, our primary navigation guides have been rendered nearly useless.  Markets have become very poor tools for price discovery due to the manipulation by the central planners.  The economic statistics upon which we have relied have also become highly suspect.  Methodologies for calculating important signals such as inflation and employment have been altered to support current policies and narratives, despite the fact that the myriad of these policies have failed to produce the improvement in employment and overall economic activity that one would expect after spending trillions of dollars."

Fitzwilson claims that the US is following its own version of "bail in." The banks had their cash positions improved by getting money to loan at virtually zero interest, while credit card and other loans were kept high. Thus, the public is made to finance the banks, just as they were in the case of Cyprus. Just in a different way.

The Ukraine in the cartoons.

 

Galloping toward catastrophies.

The developed world is run by politicians and bankers who are irresponsible at best and insane at worst. Let's go through the coming catastrophies.

Japan.

Japan's debt service has risen to 25.3T Yen($257B), while its revenues total 45.4T Yen ($545B). Thus, half of Japan's revenues go to service its debt. The National Debt is 242% of the GDP. It will not be paid back. The Bank of Japan wants a 2% inflation (sounds familiar?). Just as in the US, the govt jury rigged the numbers so inflation is underreported: core inflation is reported as 1.3%, overall price inflation as 1.6%, while food prices have risen 13.6%. The Bank of Japan prints 70T Yen/year, which has alleviated deflation fears for now. Hyperinflation looms as Japanese Government Bonds will have to increase yield to be sold. And if the Bank of Japan becomes the sole buyer of its bonds then... Ten year bonds now earn 0.62% and if bond yields increase, it will hit the economy AND raise debt payments. This is a box from which there is no escape.

The US.

The Main Stream Media puts out the propaganda that the US economy has recovered. Not so. Total sales are down 4%, housing starts down 34%, house sales down 18% and consumer debt has increased 20% since 20010. The FED is also set on wanting a 2% inflation rate. If you shop, you may notice that coffee is up 70%, hogs are up 42% and beef is up 5% (which number is probably higher). Tapering $30B has not helped the economy and the taxes of Obamacare hand like a black cloud over us. Who buys the US Treasuries? If you can believe this: Belgium. Their ownership of Treasuries went from $170B in September to $310B at the latest reporting. Belgium????

China

China is slowing and construction  companies are defaulting. Hong Kong real estate prices are diving, but Chine continues to buy all the gold it can.

Russia/Ukraine.

No telling how the "sanctions" will effect Russia economically. The Ukraine owes $72B, of which $12B comes due this year. Since, the Russians just raised the cost of gar to the Ukraine by 40%, it is doubtful that the Ukraine can survive. I mean if Russia does not forcefully incorporate them. Putin clearly believes that he can do anything he wants in the Ukraine, Moldova and Estonia without fear of Western retaliation.

Gold

The London Bouillon Metal Association Banks(LBMA) are essentially in default. That is, they do not have the gold they pretend selling. So, where do the "get" the gold they actually sell? They simply raid the gold of people who store gold with them and "sell" that. Since, a lot of people leave "their" gold at the banks for storage, the gold can be sold to several people. When the Chinese and Indians buy, they want delivery of the physical metal.

Presumably, the LBMA avoided default by getting the BIS to allow them to "sell" more paper gold. However, this can not be carried on indefinitely. So, the financial media is trying to jawbone gold down by predicting gold prices to fall to $1000/oz.

The FED meeting was accompanied by a fall of $47 in the price of gold. Next week, expect gold prices to rise and produce the "golden cross" where the 50DMA crosses above the 200 DMA. Gold miners didn't drop much and the market is ready to roll. Will it?

Farman (fireman) Derek's Key Like Pie.

Fireman Derek is a real fireman and a pie maker. You can see his website here:

 

http://firemanderekspies.com/

 

Here is a picture of him:

 

 

 

And here is the recipe for his Key Lime Pie.

 

1, 14 oz can of sweetened condensed milk

3 egg yolks

3 ounces lime juice

1 package Graham crackers

1/2 stick unsalted butter

 

Preparation

1. Mix condenced milk, egg yolks and lime juice. Set aside.

2. Crush Graham crackers and mix with melted butter.

3. Form crust in 9 inch pie platter with the buttered crackers.

4. Pour in the filling.

5.Bake at  350 degrees F for 12-15 minutes.

6.Let cool and refrigerate for 1 hour.

 

Comment

 

This is a very easy recipe, but the results are rather outstanding.

 

The Ukrainian problem.

The Ukraine has two problems: 1. It has a population  that is made up of Russians and Ukrainians and 2. The country is profoundly corrupt and mismanaged.

 

The first graph shows the makeup of the Ukraine and the second graph shows how these regions voted in the election that brought in the Presidency of Yanukovych.

 

 

 

The degree of incompetence and hypocrisy that we saw exhibited in this case is nothing short of phenomenal.

 

1. Yanukovych wasted little time in dragging the previous president into court and jailing her for 7 years.

2. Tymoshenko's supporters then took to the streets and chased Yanukovych to Russia. 

3. Russians in the Crimea rebelled and are having a referendum on joining Russia. No question on how this will turn out.

 

4. The US govt insists that the Crimean referendum is illegal.   The US govt does not have a leg to stand on. It supported the referendum in Kosovo, South Sudan and the Falklands and has voiced no objections to the up-coming referendum this September in Scotland and Catalonia.

 

5. In the meantime, the EU and the US are threatening the Russian Federation with sanctions and Russia is liquidating its dollar holdings. The US even sent a destroyer to the Black Sea and the Russians shot down a US drone sent to spy on them.

 

6. To add insult to injury, Ukraine has sent its gold to the FED where it will be used in illegal price manipulations.

Has gold broken out? YES.