Is the Pope Catholic?

That used to be the saying when someone questioned the validity of something overwhelmingly obvious. The current Pope (Francis) may make that saying join the one about "sound as the Dollar." By urging us that we should make homosexuality and abortion acceptable, Pope Francis had knocked two of the fundamental Catholic teachings out of the way. The third one (about Socialism) has already been abandoned by the Catholic Church. On his way to Jerusalem to be crucified, Jesus sanctified the legitimacy of the profit motive and the principle of investing in His parables about the Talents (the Talent was worth 60K denarius -one day's wages) and the Minas (one Mina = 20 Denarius). He established the moral legitimacy of Capitalism.

California: Blue-footed Boobie sighted.

The Boobie has a reputation of being stupid. It is unafraid of people and has some pretty bizarre behavior on land. But, it is a great flier and is not handicapped by its blue feet.

I propose to make the Boobie our national bird - short of that, make it the State bird of California. Gov Jerry (Moonbeam) Brown, like Obama, excels while doing high-flying rhetoric, but on land they have trouble. Californians are excited about the visit of some Blue-footed Boobies, but ignore the one in their State house.

Is it appropriate to compare the Liar in Chief to a Boobie bird? Certainly. Mr Obama declared that "Raising the Debt Ceiling Does Not Increase Our Debt."

Larry: Trapped in hubris.

Larry's latest prognostication came out a couple of days ago. These are his proclamations:

1. The gold price is yet to hit bottom. Why? Because according to his calculations, it should have hit 1150 and instead it hit only 1178.

2. According to his cycle diagrams, the minimum will occur either on Oct 2,3 (if it goes below 1150), or Jan first days.

3. He now tells us the "I'm convinced" number is 1605.50 , instead of the previously ballyhooed 1422 -
this is the number where he is convinced that
gold is back in the Bull Market.

Let's look at the flaws in his arguments.

1. It is stupid hubris to think that one can determine precisely the number of the low in the Market.

2. The gold price exceeded the previous "I'm convinced" number set by Larry at 1422. He now acts as if that did not happen.

3. Note that Larry's cycle prediction numbers are out of phase with the actual gold price:

Let us now look at the actual gold price:

What the graph shows us is a reverse head and shoulders formation. This graph predicts a rapid rise to 1600 just around the corner.

Now, I have no faith in TA vs gold because of the wide-spread manipulation. (See articles on the subject at KWN). But, if the patterns indicate something, it is the coming increase in gold prices.

Lots of news!!

1. Draghi says EU recovery is in its infancy. Yeah, like it is a zygote.

2. Janet Yellen becomes leading candidate for FED job, because Summers bows out. She is a former University of California (Berkeley) Professor, which means she is a Leftist. You think Summers bowed out because he did not want a confrontation in the Senate? Who would confront him? The Republicans led by McCain? Or, Senator McMumbles? Summers bowed out because he was told to. Yellen is the choice of Obama, because she wants to enlarge the money printing.

3. Two competing forces are acting on the Stock Market now: a) the expected tapering and b) the anticipation of higher inflation under Yellen.

4. Two JP Morgan Traders admit that their bank is manipulating the precious metal markets. Like are we surprised?

5. Bouillon banks head for default. It is getting close to impossible to deliver the gold that is "sold" on the COMEX. So, two things are in the offing as the financial elites contemplate the mess they created: a) gold deliveries will stop and b) those who own paper gold will get cash. It will not even be called a default.

6. Holland is joining the economically troubled countries of Europe. Its deficit will go up next year.

Gold and econ: Here we go again.

Europe.

Do you recall reports a month ago that Europe's economic troubles were solved and that the EU was on the mend? The reports were not true. That talk was heard after reports that the EU's GDP was up 0.3% in QII. Probably another lie. The July figure was DOWN 1.5%. There was a significant drop in Germany, but Italy and France as well.

How about the recovery of the automobile industry of Europe? The recovery did not happen. The actual figures show that car manufacturing dropped 6.6% this year.

Greece! Remember? Unemployment in Greece is 27.9% and in the group below 25 years it is 58%.

The US.

We have a similar situation in the US. An anemic rise in the GDP of 1.7% was made into a 2.5% because of the drop in imports (due to less oil needed because of the increased oil production due to new technologies). Here, too, we get a report of a robust automotive industry. No doubt, that report will be revised.

Then we have a drop in initial unemployment applications. We know how this was achieved: two States did not report!

Talk of the FED phasing out bond buying is just that: talk. The US economy would be boosted if ObamaCare was defunded, but a lot of Republicans have no stomach for a fight.

GOLD.

That takes us back to gold. Central planners are pulling out all stops trying to reduce gold price once again. And it all goes to China How far can they drop gold prices this time? Hard to tell.  Gold is in backwardation again and  GLD is telling their customers that they can't have their gold. JP Morgan is "forecasting" once again that gold will go below $1,000/oz. So, they expect gold mines to operate at a loss or shut down. These are dangerous folks.                                                            

Is the economy really getting better?

GDP figures for QII have been revised from 1.7% to 2.5%. Vow! The Obama cheerleader squad of "Reporters" squeals in delight that O'Bungle's policies are beginning to bear fruit. Is that true?

If you look at the numbers, we find that wages have actually decreased and real personal consumption, nondurable goods and spending on services are virtually flat. So, how did thw Labor Department can conclude that GDP increased from 1.7% to 2.5%?

The increase in the GDP is due entirely to the decrease in imports. SPECIFICALLY, to the decrease in the imports of oil. Yes, the much-maligned oil industry. The use of hydraulic fracturing techniques (FRACKING) has reduced oil imports from 10.2 million barrels to 6.8 million barrels. That is why the GDP figures were revised.

O'Bungle lost little time in trying to take credit for the increased oil production - something that he strenuously opposed. He claims that oil production has increased because of federal research and increased permitting. Hogwash.

Here are the actions O'Bungle took to DECREASE the use of oil production:
1. Initiated a federal investigation into fracking, trying to intimidate the oil industry;
2. Sought to limit drilling via the EPA;
3. Sought to use the SEC to force oil companies to admit to liabilities due to 'global warming.'
4. Slowed the permitting process for the Gulf of Mexico;
5. Blocked permits for drilling on ALL federally owned lands;
6. And called for a special tax of $44B on oil companies.

Increased oil and natural gas production is taking place not because of but in spite of O'Bungle.

Gold: Capping operation in place.

The story I hear is that the powers that be (BIS, BOE and the FED and the Bouillon Banks) have given up on trying to bankrupt the precious metal miners, because it created a firestorm of demand. So, they now went back to the older strategy of capping the price of gold between 1,380 and 1,420.

How long will this hold?

Hard to tell, but the strategy has a weak Achilles heel: silver. While, the banks have stockpiled gold in their vaults, they have not stockpiled silver. So, expect the gold/silver ratio to narrow down from 62.