Russian gas deal: another Obama black eye.

Russia and China have announced a gas deal worth $400B. Except it will not be conducted in US Dollars. This is a major blow to the Dollar and to the Obama effort to isolate Russia. Not much of the details are known at this time, except that the deal will be paid in currency other than dollars.

The deal brings to mind the quotation attributed to Pres Putin:

"Negotiating with Obama is like playing chess with a pigeon….
the pigeon knocks over all the pieces, shits on the board and
then struts around like it won the game."

~Vladimir Putin

Has the bear market in gold ended?

According to Larry - YES.

Here is the latest graph on prices:

 

I do not see a breakout, only a wedge. The EU competition regulator just fined 3 banks for manipulating financial derivatives related to interest rates. This is a comedy, right?

The FED's scheme did not work.

Says Shah Gilani. Here is what he says:

"The numbers are in. And they are ugly...

Based on preliminary first-quarter data, U.S. GDP (gross domestic product) growth is 0.1%.

That's not much.

But then again what do you expect for $3.4 trillion dollars of Federal Reserve spending to boost the economy?

So the question is, how is it possible that we've got nonexistent economic growth, or worse, negative growth and possibly another recession looming, when the Federal Reserve since September 2008 has spent $3.4 trillion to prime the economic pump?

This could push the whole economy past the brink...

The Ugly Truth on Fed Intervention

First of all, the preliminary GDP number, which is the total output of goods and services produced by labor and property minus imports, will be revised on May 29, 2014.

A majority of economists are already revising their estimates down into negative territory.

The consensus view expects the revised or "second" GDP number will actually show the economy contracted by 0.5% to 1% in the first quarter.

Not that the second quarter is expected to be bad just because of a slow first quarter. In fact, a majority of pundits, including the Federal Reserve itself, are saying because the first quarter was so bad the economy will bounce robustly in the second quarter.

But if they're wrong and the second quarter shows negative growth, that's really bad.

It's bad because two consecutive quarters in a row of negative GDP growth is the definition of a recession.

Why has the Fed intervention failed so miserably in spurring growth? It's an ugly truth but needs to be told.

Since the credit crisis, which spawned the Great Recession, the Federal Reserve has been trying to build a bridge to growth. The truth is they've spent trillions on their bridge efforts, but they can't deliver the destination.

Here's what's frightening: What seems like misguided Federal Reserve policies to stimulate economic growth by printing egregious amounts of money was never a misguided policy of trying to stimulate the economy. It was a massive liquidity and profit-making program designed to first save, then enrich, the nation's biggest banks.

Economic growth was the expected byproduct of the Fed's "trickle-down" banking bonanza.

Why It Didn't Work

The reason we're not seeing that trickle-down growth is because the banks aren't lending as they were expected to.

They aren't lending robustly into the economy because they've had to pay out billions of dollars in fines and legal costs.

That plus their former freewheeling speculative trading gambits with depositor money are being shut down thanks to Dodd-Frank and the Volcker rule, and they are facing their worst free-market enemy, a flattening yield curve.

It's common knowledge that all the nation's too-big-to-fail banks would have all failed if the Fed hadn't bailed them out. Any one of them collapsing, after what happened when Lehman Brothers imploded, would have brought down all of them like a professional bowler throwing a 50-pound ball down an alley with gutter guards.

It's impossible for there to be any economic activity if there are no banks. So, the Fed did what it had to do to save the big banks.

Canadian counterfeter apprehended.

Canadian Brian Ross had printed a few million dollars in denominations of 20 dollars.

http://abcnews.go.com/GMA/video/master-counterfeiter-prints-virtually-undetectable-fake-20s-23638314

The real criminals at the FED printed over 3 Trillion.

The FED begins to lose control.

The FED printed enough money to bring its assets to 4T from 800B. Inflation was moderated by keeping gold prices suppressed and by the banks refraining from using their ability to increase lending money. This is now beginning to change, at least the banks reluctance to increase the money supply.

 

 

 

What we can expect to start happening is: 1. an increase in interest rates, 2. an increase in price inflation and 3. a drop in the price of bonds, especially Treasuries. The next thing we should see is an increase in the price of gold.

EPA sabotaged the Pebble mine in Alaska

and made its decision before scientific review.

http://www.washingtontimes.com/news/2014/apr/30/exclusive-memos-show-epa-officials-tried-to-kill-m/

Economic slowdown and gold price changes.

1. Europe.

Despite the self congratulations in Greece and Spain over their successful sale of bonds, all is not well in Europe. The very fact that these countries have to finance their debts from new bonds tells us that they have serious economic problems. Spanish unemployment went past 26%  and Greece is not really recovering.

2. The US.

Lakshman Achuthan of ECRI tells us that the drop in US growth rates to 0.1% was not due to the harsh winter, as the leading economic indicators begin to drop in qIV of 2013. ECRI insists that we are still in a recession and the improvements now are noise in the economic indicators. Edelson forecast that deteriorating economic conditions will force the FED to resume QE on an even bigger scale.

3. Larry's emergency communication on gold.

Larry claims that the drop in silver below support was not shared by gold and that this non-conformation means a turn coming in gold prices. One of two things might happen: a drop in gold price will set off the last leg of the bear market in PMs, or 2. the gold price will start rallying without a further drop. Time should tell.