GOLD

         Our valued subscribers know how MacDougal feels about hedging against hyperinflation with gold: the Crime Families will game an atmosphere of price insanity into the markets to rip your wallet right out of your pants.  Here's what goes on in normal times, as one small trader tells it anyway.  Common knowledge has long held that 90% of futures traders (us) lose to the other 10% (them), but the explanation for that has never been laid out quite as clearly as observed in the piece linked below.

         We can't help noting that the futures racket uses rules that unfairly stack the odds against the small guy, a lot like no-limit poker, and it's their unfair rules, not price swings, that take the naive down.  Because inexperienced traders have never read about all the victims getting duped here, each generation of losers simply won't believe that the American legal system lets a criminal element in the financial markets pull off calamari as sick as this, and our media hotshots ignore that one like the plague.


http://seekingalpha.com/article/1365351-physical-gold-vs-paper-gold-the-ultimate-disconnect?source=email_macro_view&ifp=0

Intraday Comment on Gold

         The current move in precious metal prices, described today as a “vicious sell-off” or “full-scale stampede” or “gold free-fall”, highlights the pitfalls naïve investors face in doing the right thing.  With Ben Bananas churning out play money like there was no tomorrow (that seen as the inevitable outcome of his crazy dough agenda by many observers as well) silver, gold, and what have you would seem the most responsible wealth haven to run to – IF YOU DIDN'T HAVE TO GO THROUGH THE CRIME FAMILIES FIRST.

         We have no idea where these markets are going, but do know what the Wall Street Dons have in mind: to sucker their patsies into those endless bloodbaths spawned by proprietary trading and papered with the overwhelming sums these thieving moneysuckers have at their disposal when the pack of them, acting as one, gangbang the public investor, cheating him out of his savings under the cover of a bought-and-paid-for lawlessness that refuses to codify and enforce blatant criminal activity as blatant criminal activity.

         For us, this is déjà vu all over again.  Back in the late 60’s, at the dawn of the “guns and butter” inflationary horror that would destroy long term bondholdings right here in our own country over the decade to come, a German who’d lived through their Weimar Republic hyperinflation told us that industrial common stocks were the only investments that survived that epic financial meltdown.  Gold investors saw their savings stripped right out of their accounts by the kind of cutthroat practices traders can get away with during off-the-wall periods of insane market instability.

         Think it through, valued Subscribers.  That’s got to be what we’re seeing in the precious metal complex today.  Just a taste though.  With Bananas at the presses, surely the real show is yet to come.

Sell All Too-Big-to-Fail Commercial Bank Holdings

         If our previous warning to sell all too-big-to-fail commercial bank holdings wasn't clear enough, here's another take.  Washington is serious about raiding your savings to keep Wall Street Crime Families afloat when they start to sink.  In the sick minds of our elected officials, investors take voters off the hook.  This author emphasizes that your deposits will be confiscated too.  If you need a place to park large sums of money, it seems wise to look into the Bank of North Dakota, mentioned at the end of the article, and also consider smaller commercial banks in your own area.  There've got to be plenty of local bankers around who avoid proprietary trading like the plague proprietary trading has turned out to be.  Small-enough-to-fail bankers who stand no chance of getting "bailed in" if they screw up.

http://seekingalpha.com/article/1330491-winner-takes-all-the-super-priority-status-of-derivatives

Replacing the Old Crystal Ball with a New One

         Here's an informed piece that helped change our own thinking in several areas, including quantitative easing (QE).  So much so that coverage of the same material here would be tantamount to plagiarism, and, as these writers get paid in part by the 1,000 hits, potentially unfair to the author as well.  We'll just say that there's been a QE before in American history, and, like so far this year, theirs worked rather well for equity investors (by suspending the stock market cycle for a while), plus, with a little luck in the timing, their Feds managed to pull off an end game that made it all go away without complete catastrophe (though the author's not saying that part will happen again).  It's a long read, but well worth your perusal.  Onliest thing out there that isn't pure unadulterated seat-of-your-pants economic guesswork too.

         As ever, keep your eye on the income stream and not on the capital when navigating through a financial storm.

http://seekingalpha.com/article/1321721-here-s-what-happened-the-last-time-the-fed-owned-all-outstanding-treasuries

SOS

         Major commercial banks continue to gamble in a whacky 21^st Century financial arena that nobody understands, least of all them.   Instead of shutting risky practices down, regulators are focusing on how to shut mismanaged banks down.  A paper co-authored by the FDIC and the Bank of England titled “Resolving Globally Active, Systemically Important, Financial Institutions” makes that abundantly clear.  An excerpt from the paper is shown below.

         In view of this, MacDougal recommends that subscribers sell all equity holdings in commercial banks and redeploy substantial savings and checking account balances somewhere else.  Your money is no longer safe in a major commercial bank.  Take the successful raid on wealth in Cyprus, where reports tell us the second largest bank on the island is getting shuttered and whales are taking a 40% haircut, as a chilling harbinger of blindsides to come.  Pour yourself an alcoholic beverage, and take a gander at the excerpt:

         “Under the strategies currently being developed by the U.S. and the U.K., the resolution authority could intervene at the top of the group. Culpable senior management of the parent and operating businesses would be removed, and losses would be apportioned to shareholders and unsecured creditors. In all likelihood, shareholders would lose all value and unsecured creditors should thus expect that their claims would be written down to reflect any losses that shareholders did not cover. Under both the U.S. and U.K. approaches, legal safeguards ensure that creditors recover no less than they would under insolvency.” (Note: “unsecured creditors” means depositors.)

         “It should be stressed that the application of such a strategy can be achieved only within a legislative framework that provides authorities with key resolution powers. The FSB Key Attributes have established a crucial framework for the implementation of an effective set of resolution powers and practices into national regimes. In the U.S., these powers had already become available under the Dodd-Frank Act. In the U.K., the additional powers needed to enhance the existing resolution framework established under the Banking Act 2009 (the Banking Act) are expected to be fully provided by the European Commission’s proposals for a European Union Recovery and Resolution Directive (RRD) and through the domestic reforms that implement the recommendations."