Expect Massive Inflation & Pain For Ordinary Citizens

Today one of the top economists in the world sent King World News an exclusive piece cautioning about the massive inflation present in the financial system and how destructive this is for citizens. Michael Pento, founder of Pento Portfolio Strategies, also warned the worst is yet to come as standards of living continue to be destroyed.

Pento: “Wall St. Pundits have summarily declared Ben Bernanke free from any wrongdoing regarding the negative effects derived from artificial interest rates and massive increase in the Fed’s balance sheet. Specifically, most market commentators now claim with certainty that the central bank’s unprecedented manipulation of markets has been done without creating any inflation.

This assertion is untrue in every aspect. Most importantly, the Fed’s quest to boost asset prices has been accomplished by creating credit by decree. In other words, Mr. Bernanke has purchased more than $2.5 trillion worth of MBS and Treasuries with newly manufactured money within the last five years alone….

“Therefore, there has already been $2.5 trillion worth of inflation that has been directly injected into mortgage and Treasury securities; and this number is still growing at a rate of $85 billion each month. This means the Fed is causing a tremendous amount of inflation to occur in bond prices. Banks have taken the Fed’s new money and purchased assets including equities, MBS and Treasuries, which in turn has helped push interest rates down to record lows.

Bernanke’s debt monetization has sent stock prices up 140% from their lows and also sent home prices rising 10.2% YOY on a national basis, according to the S&P/Case-Shiller Index. Inflation is very evident in stock values and has now even caused real estate prices to jump. This process of balance sheet expansion has caused the broad money supply M2 to rise 7% YOY. With real GDP growing at just 1.5-2% annual rate, the excess money growth is causing asset prices to rise.

Source: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/6/9_Pento_-_Expect_Massive_Inflation_%26_Pain_For_Ordinary_Citizens.html

Real ‘price tag’ for gold and silver manipulation by Wall St.

To understand the price action in gold and government bonds it helps to compare it to what is called ‘price tagging’ in some circles. And I’ll get to the definition of this in a minute.

Focusing on gold and silver: the way it works is this, whenever real cash buyers emerge for gold and silver in India, Russia, China, and amongst hard money advocates in the West – Wall St. and the City of London dump hundreds of tons of ‘naked-shorts’ on various futures exchanges (counterfeit futures contracts) that kills the price in the short term.

Conversely, even though the central banks and their Wall St. friends are floating trillions in government bonds, the prices for these bonds are currently trading at 300-year highs. Never in America’s 237-year history or, if you go back in British history 300 years, do you find government bonds trading as high as they are now (i.e. record low interest rates).

Historic demand for gold and vanishing supply is driving the prices lower while record supply of bonds with no natural demand only fabricated ‘quantitative easing’ demand driving prices higher. This is a complete repudiation of the laws of supply and demand that is not only unsustainable, but causing immeasurable hardships and now many cases of suicide as well.

Price tagging’ is a good comparison to make when grappling to understand what’s happening in the gold and bond market these days. Price tagging refers (http://en.wikipedia.org/wiki/Price_tag_policy) to the practice on the part of Israel, whenever the international community pressures them on illegally expanding settlements into the occupied territories, they kill some Palestinians.

That, we are told by the Israelis is the ‘price tag’ for insisting on compliance with the law.

The price tag for cash buyers of gold and silver – who want to escape the matrix of the US dollar and the financial hegemony that comes with the dollar’s role as world reserve currency – is to suffer the ordeal of having Wall St. (principally JP Morgan) dump hundreds of tons of paper gold ‘naked-shorts’ on to the market to crash the price and destroying economies around the world.

We shall overcome. Eventually, the cash buyers of gold and silver will triumph over the paper ‘price taggers’ and their pathetic schemes and the world will be a better place.

Source: http://rt.com/op-edge/price-tag-gold-silver-718/

Chinese Gold Demand Pops; American Eagles Soar

Gold’s biggest gain in a week was attributed to Chinese demand and demand for U.S. coins. Gold imports by China from Hong Kong almost doubled from October to November, and on Monday, the Shanghai Gold Exchange set a physical gold contract record.

Sales of gold and silver American Eagle bullion coins also surged to begin 2013.  Coin Update reports that Monday’s opening day sales tally of 3,937,000 American Silver Eagles “seems to represent the highest one-day sales total in the history of the program,” while last week’s launch of the 2013 American Gold Eagle saw a 33% sales increase over 2012.

News & Views

MarketWatch/Zero Hedge:  Gold & silver up 1% & 1.3% respectively; Gold & silver win as stocks and VIX drop for second day

Barron’s/Wall St. Cheat Sheet:  Gold, silver gain:  U.S. default seen as soon as mid-February; Is the U.S. debt ceiling really a debt target?

BullionVault:  Dealers report very strong gold demand from China & India; Western savers hedging anxiety with gold

Dan Norcini/Casey Research:  Gold bounces from support; Dear 2013, What will gold do this year?

Bloomberg:  Gold lures Japan’s pension funds as Abe targets inflation

Metal Miner/SilverSeek:  Japanese silver price gains 4% on week; Silver and bank stock lovebirds

Peak Prosperity:  The trends to watch in 2013

Alasdair Macleod/Seeking Alpha:  The economics of gold and silver in 2013; The treasury bull market is over; Inflation will take center stage

SafeHaven/GoldSeek:  Merk 2013 dollar and currency outlook; Bullion vs. the dollar: Three scenarios

Bull Market Thinking: Bill Gross: Fed claims to own billions in Fort Knox gold; “With nothing in the vault to back it up—amazing!”

KWN:  We’ll see breathtaking moves in stocks, gold & silver in 2013; Nigel Farage – This is my greatest worry as we head into 2013

Coin Update:  Ron Paul’s “Free Competition in Currency Act” lives on

Zero Hedge:  Stephen Colbert takes on the trillion dollar coin; Piers Morgan vs. Alex Jones – The “gun fight” at the CNN corral

This entry was posted on Wednesday, January 9th, 2013 at 12:41 am and is filed under China, Federal Reserve, General Economy, Gold, Monetary Policy, Short Sellers, Silver, U.S. Congress, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.