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REALIST NEWS – Is 2015 Really going to be the year of Financial Collapse?

jsnip4Published on Mar 6, 2015

Post-Payrolls Reaction: Stocks, Bonds, Commodities Drop, Dollar Pops, As “Good News Is Bad News” / by Tyler Durden / 03/06/2015 09:17

When the better-than expected headline data hit, stocks briefly questioned its reality then plunged. Bond yields initially tumbled (before the number had hit newswires) but once it did, they soared back higher (now up 6-8bps on the day). Crude plunged, bounced, and re-plunged as most commodities are notably lower amid the surge in the US Dollar. Good news, it appears is really bad news as a boxed-in Fed will be forced to raise rates.

Stocks initially rallied as algos took out yesterday’s high stops, then tumbled…


Daily Pfennig: A Jobs Jamboree Friday, Do We Care? / Chuck Butler / March 6, 2015

In This Issue.

* All eyes on Jobs Jamboree this morning.
* Chuck throws in the towel on the BLS.
* Dollar has the conn today.
* Good data in Eurozone but euro slips further.

And Now. Today’s A Pfennig For Your Thoughts.

A Jobs Jamboree Friday, Do We Care?.

Good day.. And a Happy Friday to one and all! Another in what seems to be long work-weeks comes to an end today, and none too soon, I must say! In my best Ed Grimley voice! So far, so much better than yesterday morning, so I’ve got that going for me, eh?   Next Friday, I’ll be on the other side of the state, in St. Pete, speaking at the Oxford Club’s IU Conference.. You may recall a month ago or so, Frank, talked about this conference and gave you a link to look into it. Chris Gaffney and David Conover will also be there to speak, so it’ll give me a chance to catch up with them.

Speaking of catching up, the dollar is doing just that today against most currencies, in fact, the Aussie dollar (A$) and Russian ruble are the only two currencies bucking the dollar buying trend this morning. The euro has dropped below $1.10, and Gold along with Oil are down a couple of bucks to start this Friday, March the 6th. It’s “one of those days”. Momma told me there would be days like this, my momma did.. It’s a pretty sad day for the currencies when the Russian ruble is the shining light of the day!  But that’s what we have here folks.

So, European Central Bank (ECB) President, Mario Draghi, of whom a guy that writes short notes on the markets that I read, calls “Super Mario”, which cracks me up, kind of threw the markets a curve yesterday, when he didn’t dig deep into the details of what bonds from whom and duration with the markets. He simply said that he would begin buying EUR 60 Billion of Gov’t bonds starting March 9. That left the markets with a bunch of questions, and longtime readers know how I’ve harped and harped over the years about what happens to a currency when the markets are left with unknowns. it gets taken to the woodshed.

On a sidebar. A dear reader sent me a note the other day, and asked me if I had ever thought about using the word “woodshed” and thought that many younger readers might not know what it was I was talking about.. I assured him that I was confident that they knew, for no one had ever responded to the Pfennig, asking me it was I was talking about. But then that got me thinking, about what many youngsters have missed out on, those wonderful, bonding, and ways to get to know people better, moments  (NOT!). You don’t know what you’ve missed!


“As Goes Apple, So Goes America” – Apple To Replace AT&T In The Dow / by Tyler Durden / 03/06/2015 09:03

When all else fails…


Prepare for unknown craziness as the world’s largest and most-owned stock will dominate another index (along with Goldman as we noted previously).


The reaction…


Market Report: Strong dollar as deflation bites / By Alasdair Macleod / 06 March 2015

Currency wars have intensified this week driving the US dollar sharply higher against the euro, yen and pound.

Minor currencies are also deliberately devaluing against the world’s reserve currency. According to Zerohedge, 21 central banks have cut interest rates since 1st January. The signal this sends out is that people everywhere appear to be showing an increasing preference for money over goods, commonly associated with deflation.

Precious metals have been pinned down in the cross-fire. At the root of this currency war is a strong dollar, contributing to weak commodity prices, and since western analysts are generally uncertain of the role of precious metals in modern financial markets, they see no reason to recommend buying gold and silver. Over the week the gold price fell over 1% to $1196 by early-morning trading in London today, and silver by 2.5% to $16.12. However, the detail in market action suggests physical demand continues to be reasonably strong on falling dollar prices, and westerners are still emptying their vaults to supply it.


US Trade Deficit Worse Than Expected As Auto Exports Tumble / by Tyler Durden / 03/06/2015 08:48

As Chinese exports crashed in January (and imports were extremely weak), one could be forgiven for expecting the US trade deficit to be more extreme than the tumble it experienced in December… but no. The US Trade Deficit printed $41.8bn, slightly worse than the $41.1bn expectation but ‘better’ than the adjusted $45.6 billion. Imports dropped 3.9% in January and Exports fell 2.9% but YoY imports fell 0.17% and exports fell 1.75% – the last time both fell YoY was November 2008. This is the 2nd month in a row of worse than expected deficits (and 4th of last 5). The shift is led by big drops in Food & Beverage (-9.1%) and Auto (-7.0%) exports and an 11.3% plunge in Industrial Supplies imports.

4th of last 5 month bigger than expected trade deficit…


The Fall of Confidence / By Dr. Jeffrey Lewis  / Mar 05, 2015

Institutional confidence is akin to gravity. We know it’s there, and we understand a lot about it – but we haven’t yet been able to explain it adequately enough. At least not enough to quantify its relationship  – or unify gravity with the other physical forces that we do understand. Of course, we are much further from unification of the interactions between confidence (behavior), the economy, and finance.

It’s easy to see the effect finance has on the economy. One can even map the ultimate effect through history, which is riddled with failed currencies. Ultimately, the failure of an untethered financial system culminates with the collapse of a currency.

Just as gravity is crucial for keeping things from floating away, sound money is the force that is crucial for controlling the trajectory of modern financial policy.

Somewhere along the line, confidence pushes things over the edge, and the tipping point comes from a confluence of failures in faith.

This may be where we are now. When you hear people speak of “something afoot,” this is what they mean.

Of course, financial confidence is an abstract concept formed in the collective view–a view maintained by truly dangerous falsehoods.

We may not be able to unify confidence with the real economy and a financial system unhinged, but we can all come to appreciate its gradual thinning.


Americans Not In The Labor Force Rise To Record 92.9 Million As Participation Rate Declines Again / by Tyler Durden / 03/06/2015 08:53

For those (very few now, with even the Fed admitting the unemployment rate has become a meaningless, anachronistic relic) still wondering why the unemployment rate dropped once again, sliding from 5.7% to 5.5%, the reason is that while the number of unemployed Americans dropped by 274K thousand while those employed rose by 96K, the underlying math is that the civilian labor force dropped from 157,180 to 157,002 (following the major revisions posted last month), while the people not in the labor force rose by 354,000 in February, rising to a record 92,898,000 (people who currently want a job rose to 6,538K) matching the all time high number of Americans not in the labor force.

End result: the labor force participation rate dropped once more, declining to only 62.8%, which as the chart below shows is just off the lowest print recorded since 1978.


Obscure TPP Provision Will Lead to Corporations Replacing Nations As the Rulers of the Planet

The corporate elite, six corporations, which are ruling the planet, meet in secret as they make plans to further subjugate humanity in the movie Rollerball. / by Dave Hodges / March 6, 2015

An obscure Trans Pacific Partnership provision will serve to threaten the very existence of the nation state and replace governmental authority with the power and the whim of the corporation. This secretive provision promises to supplant all national authority with a “Rollerball” type of world.

If you are not familiar, Rollerball was a very popular movie which debuted in 1975 and it depicted the planet as being ruled by six corporations in the place of national governments.

Rollerball 1975

The movie was set 43 years into the future from the time of the release of the movie, in the year 2018, in which a total of six corporations have replaced government as the ruling authority following the demise of the nation state. With the absence of war or conflict, a forcibly passive population’s bloodlust is satisfied by a brutal new sport known as Rollerball.

More popular than today’s NFL Football and the Superbowl, Rollerball resulted in a corporate-backed sensation, the most popular athlete in the world, Jonathan E. (played by James Caan). Jonathan E. had steadily climbed the ladder to superstar status of the sport and would be on a par with the legendary Michael Jordan.

Rollerball’s lethality and the inevitable demise of all the participants serves the social control purpose of conditioning the masses into a state of learned helplessness in which they are programmed to believe that they have no control over their fate and the whim of the corporations is all-powerful over the free will of the individual. In the movie, there are no Constitutions or civil liberties.


Did The BLS Again Forget To Count The Tens Of Thousands Of Energy Job Losses? / by Tyler Durden / 03/06/2015 09:23

A month ago we asked if the “BLS Forget To Count Thousands Of Energy Job Losses” when as we showed, the BLS reported that only 1,900 jobs were lost in the entire oil and gas extraction space, which was a vast underestimation of what is taking place in reality, when compared to not only corporate layoff announcements, but what Challenger had reported was going on in the shale patch, when it calculated that some 21,300 jobs were lost in January in just the energy sector.

Today we ask again: did the BLS once more forget to add the now tens of thousands of jobs lost in the US energy sector? We ask because the divergence is getting, frankly, ridiculous.

In the February NFP report, the establishment survey reported that just 1.1K jobs were lost in the “Oil and Gas Extraction” industry: this is lower than the downward revised number of 1.8K in January, and adds up to only 2900 jobs lost in 2015.


Crazed Washington Drives the World to the Final War / Paul Craig Roberts / March 5, 2015

John Pilger is the kind of well-informed, hard-hitting journalist with gobs of integrity that no longer exists in the Western mainstream media. He has the most distinguished career of all in the business.

In the article below he brings stunning information to one of my own themes–the creation by Washington and its NATO vassals of an artificial reality consisting entirely of propaganda into which Washington has placed the entire Western world and all outside who inspire to be part of it. Westerners live in The Matrix, and the presstitutes keep them there. The New York Times, Wall Street Journal, NPR, and the TV channels perform as agents (as in the Matrix film) actively suppressing any glimmer of factual reality.

Western people have no comprehension of the real reasons for Washington’s murderous interventions in Yugoslavia, Middle East, Afghanistan, Libya, Ukraine, Indonesia, or Latin America. The most transparent lies are fed to people too ignorant to recognize the lies. The lies have cost huge numbers of deaths and injuries and are leading directly to war with Russia and China.

It is probably too late to stop this war. The war is inevitable because Washington’s doctrine of world hegemony does not permit the existence of other strong countries with independent foreign policies. Unless the House-of-Card US economy collapses, the only way Russia and China can avoid war is to accept Washington’s overlordship.

John Pilger himself speaks of growing up inside The Matrix as did all of us:
“I grew up on a cinematic diet of American glory, almost all of it a distortion. I had no idea that it was the Red Army that had destroyed most of the Nazi war machine.” I doubt that even the most determined of us ever become completely free of the disinformation in which we are indoctrinated. Pilger himself still shows traces of it when he assumes that Hitler started World War II by invading Europe when in fact Great Britain and France initiated World War II when they declared war on Germany. Hitler’s invasion of Europe was a response to the declaration of war on Germany. From day one the propaganda was that Germany started World War II by rolling up the British and French armies. This lie was enshrined in 1946 by the Nuremberg Tribunal when the Tribunal defined “the supreme international crime” to be “to initiate a war of aggression” and ascribed this crime to Germany.

The Clinton, George W. Bush, and Obama regimes are more guilty of “the supreme international crime” than was National Socialist Germany. Today the crazed Washington warmongers are driving toward war with Russia.


Monetary System, World Order We’ve Had Since 1940’s Is Collapsing: Richard Maybury / By Henry Bonner / 5 March 2015

Richard Maybury has been predicting ‘black swan’ events in his newsletter Early Warning Report for the last two decades.

In a recent conversation, he put his finger on something happening around the world. He sees a growing anxiety about global events – “everybody knows there’s something seriously wrong but they don’t know what is really happening,” he said.

A reckoning with policies that have been in place since the 1940’s is taking place, according to Richard. The fallout, he says, has implications for currencies, the military hegemony of the US, and political stability around the world.

US Hegemony Since the 1940’s

“The United Nations, NATO, the Bretton Woods monetary system, the World Bank, and the International Monetary Fund were all created in the 1940s according to blueprints that were approved in Washington,” Richard explains.

And this ‘world order’ may be coming to an end, he believes: “It’s the collapse of that structure that was built in the 1940s that is behind all of these problems that are popping up in financial markets and economies around the world” (we published a report recently on why many indicators undermine the ‘recovery’ thesis. Download here).

Geopolitical Fallout

Everyone knows that tensions between the US and the Middle East are at all-time highs but Richard also believes the US is facing an untenable situation in its attitude to China. The US has the same approach of policing East Asia, in particular the Sea of China, as it did during the 1940’s, but things have changed, and the US is no longer  the overwhelming power that it used to be, when most of Asia was under-developed relative to the West.


DOJ To End Gold and Silver Manipulation?

TruthNeverToldPublished on Mar 6, 2015

The new London gold fix and China / By Alasdair Macleod / 06 March 2015

This month the physical gold market will undergo radical change when the four London fixing banks hand over the twice-daily fix to the International Commodity Exchange’s trading platform on 20th March.

From 1st April the Financial Conduct Authority will extend its powers from regulating the participants to regulating the fix as well. This will transfer price control away from the bullion banks allowing direct access to the fixing process for all direct participants and sponsored clients.

From this flow two important consequences. Firstly, the London market is changing from an unregulated to a partially regulated market, reducing room for price manipulation. And secondly, the major Chinese state-owned banks, assuming they register as direct participants, have the opportunity to dominate the London physical market without having to deal through one of the current fixing banks. No announcement has been made yet as to who the direct participants will be, but it is a racing certainty China will be represented.

Implications of becoming a regulated market

Under the current regime a buyer or seller on the fix has to deal through one of the four fixing bullion banks. The information gained by them from seeing this business is crucial, giving them a quasi-monopolistic trading advantage over all the other dealers. Instead, buyers and sellers will be anonymous during the auction process.

The new platform should, therefore, ensure equal opportunity, eliminating the advantage enjoyed by the fixing banks. Crucially, it will change market domination from the privileged fixing members in favour of the deepest pockets. These are almost certain to be China’s through the state-owned banks which already control the largest physical market in Asia, the Shanghai Gold Exchange (SGE).


Patriot News Hour Podcast



Apple Major New Gold Buyer – Propel Gold Higher? / By Mark O’Byrne / March 6, 2015

- There is a major new buyer in the gold market – Apple

- New Apple watch could use up to one third of total annual gold supply

- Apple expects to sell one million gold watches per month

- Each watch to use up to two ounces of gold

- May have enormous ramifications for gold market and propel prices higher

Apple may consume up to 746 metric tonnes of gold per year in the production of its new luxury Apple watch, due for release in April. This equates to roughly one third of gold’s total annual global mine supply.

The watch will come in three varieties – the entry level “Sports” model, the mid-tier “Apple Watch” and the upper end “Apple Watch Edition” which the company says will be made of 18k (75% pure) gold and is estimated to retail from anywhere between $4,000 and $10,000.

Apple ( APPL ) have ordered their manufacturing plants in Asia to produce between 5 and 6 million units. Around half of these will be the Sports model which is expected to retail for $349.

Around one third of the order will be made up of the mid-range watch leaving an estimated one sixth of the order to be comprised of the gold edition.


New Luxury Apple Gold ‘Watch’

Americans Not In The Labor Force Rise To Record 98.9 Million As Participation Rate Declines Again / by Tyler Durden / 03/06/2015 08:53 -0500

For those (very few now, with even the Fed admitting the unemployment rate has become a meaningless, anachronistic relic) still wondering why the unemployment rate dropped once again, sliding from 5.7% to 5.5%, the reason is that while the number of unemployed Americans dropped by 274K thousand while those employed rose by 96K, the underlying math is that the civilian labor force dropped from 157,180 to 157,002 (following the major revisions posted last month), while the people not in the labor force rose by 354,000 in February, rising to a record 92,898,000 (people who currently want a job rose to 6,538K) matching the all time high number of Americans not in the labor force.


All About ECB and US Jobs / by Marc Chandler / March 6, 2015

There are two main forces at work as the week winds down.  The first is the ECB’s confirmation of its asset purchases.   This has renewed the rally in European peripheral bond markets and re-accelerated the euro’s slide.  The second is the US monthly employment report, which follows a string of relatively soft economic data.
 The euro bounced initially on ECB President Draghi’s remarks, reaching almost $1.1115 before being sold off briefly through $1.10.  Follow through selling today has seen it fall toward $1.0960.  The sell-off is dragging down other European currencies, including sterling, where the May election polls highlight the likelihood of a coalition government.   It is difficult to find any meaningful chart support, but there is some talk of the $1.0750 area as the next target.
In January, the euro slid 6.6% against the dollar.  In February, it fell less than 1%.  Some participants are seeing the loss of downside momentum as a sign that a significant bottom was at hand.  Given the underlying divergence of monetary policy, which strikes us as unprecedented, we suspect the dollar bull market/euro bear market is a little more than half way to where it is ultimately going in this cycle. The euro peaked last May near $1.40.  It has fallen 30 cents.  We anticipate it falling toward euro’s record lows set in 2000 near $0.8200 and have suggested an $0.8500 target by the end of next year.  This is not simply about fair value.  It is understanding that such powerful moves in the foreign exchange market most often do not end before any reasonable model of fair value is overshot.


Warren Leads Charge Against the Federal Reserve & Wall Street Banker’s Days R Numbered? / by Martin Armstrong / March 6, 2015

Senator Elizabeth Warren is leading the charge against the Federal Reserve being too close to the bankers in a Hearing on Fed Accountability and Reform in the Senate. This week, the Senate Banking Committee held the first of its hearings on widespread demands to reform the Federal Reserve to make it more transparent and accountable. What will take down the Fed is its manipulation by the Wall Street Money-Center Banks.

This is the mirror image of what is going on in London. But will it gain traction? It seems it is just a touch premature. Hold this AFTER 2015.75 and the other politicians taking contributions from the bankers will have no place to hide. Both Jeb and Hillary are courting Goldman Sachs who will hand both tons of cash buying both sides of the isle.

Senator Elizabeth Warren is putting her finger on the pulse of a growing public outrage over how the Federal Reserve conducts much of its operations in secret and is in bed with the Wall Street bankers succumbing to their every desire. Warren harped on the secret loans that the Fed made to Wall Street during the financial crisis as follows which illustrates my point – they may try to manipulate markets in search of that risk free trade, but they always fail and have the government backing them up each time. Warren began:

“During the financial crisis, Congress bailed out the big banks with hundreds of billions of dollars in taxpayer money; and that’s a lot of money. But the biggest money for the biggest banks was never voted on by Congress. Instead, between 2007 and 2009, the Fed provided over $13 trillion in emergency lending to just a handful of large financial institutions. That’s nearly 20 times the amount authorized in the TARP bailout.


February Payrolls Surge To 295K, Smash Expectations Of 235K, Unemployment Rate Drops To 5.5% / by Tyler Durden / 03/06/2015 08:35 -0500

Well, a June rate hike it is, because despite all the talking down of the February NFP number which was supposed to be whacked due to snow, it just came out and it is a doozy at +295K, smashing expectations of 235K, and above the January 239K (revised lower from 239K). The household survey showed a weaker gain of only 96K, however this follows the whopping 759K addition in January.

The unemployment rate came in lower than expected as well, printing at 5.5%, versus the 5.6% expected and down from 5.7% last month, as a result of the participation rate dropping again from 62.9% to 62.8%.

But the number everyone was looking at this month, the change in average hourly earning, came in at 0.1%, once again missing expectations of 0.2%, and sliding from 0.5%. So much for winter storms boosting wages as Goldman speculated.