The following two articles are excerpts from Equedia
(www.equedia.com)
Article One - by Mr. Casey, Reporter for Equedia
On February 28, 2010, we published an edition titled, "The Crash of 2010." During that time, the markets were strong and stocks were flying higher and higher. Many didn't take the report seriously.
On May 6, 2010, the Dow plunged 998 points - in less than 5 minutes. The biggest intraday drop in stock market history. Sure there were speculations that it was a computer glitch or an error in the system and not the markets themselves.
But now they're saying that it was money manager Waddell & Reed who executed a bunch of e-mini contracts during a 20-minute span, which then caused high frequency computer trading accounts and stop losses to get triggered.
It wiped one trillion dollars worth of wealth in the markets in a matter of minutes.
That's $1,000,000,000,000
Imagine the amount of wealth that was lost....
Although conspiracy theories are entertaining, we certainly do not call ourselves conspiracy theorists. But many conspiracy theories have substance backed by facts.
Conspiracy or not, we do know how the markets can work...
Market Manipulation?
When you have big bucks, smart people, and a world of panic-stricken investors, market manipulation is easy.
Think about it. If Waddell & Reed collaborated with some of the major players in this world, maybe the same guys that are under investigation for manipulating the precious metals market, they could easily set off a round of sell-offs and make major profits by shorting the markets.
As Waddell & Reed pulls the trigger on the e-mini sell-offs, the other players have already gone short and put stop losses around the board. This would cause other stop losses to trigger and panic-stricken investors to immediately sell. The markets go into a freefall and investors continue to dump with reckless abandon.
Of course, this is just a theory. This may, or may not, have happened. But what did happen was a historical one day drop of 998 points.
The point is, our markets are nowhere near the proximity of being safe - and market manipulators know this and are profiting from this every day. They know this is a trader's market. And they know after what happened in the last few years, investors will bail at any sign of weakness. They know that fear is still the word on the Street and they're playing this to their advantage.
Gold has just recently broke out to hit a new all-time high. Silver is nearing the $20 threshold which could easily break through in the near term. This will, in turn, make many of the gold and silver junior plays that much more attractive….
The past few weeks speak for themselves. The markets are falling while precious metals prices are breaking records.
These precious metals are trying telling us something.
They're trying to tell us that our society no longer believes in its government and its financial systems. They're telling us they're the only thing in this market that has any real value.
The more the government tries to shield us from risk and uncertainty, the worse things become. The more they try and help, the more risk and uncertainty they convey. Ultimately, the more they help, the more they spend and borrow - without a way to pay it all back.
Article Two by Jeff Clark, Editor of Equedia
Greece's Gordian Knot of public debt has not been solved. In fact, Moody's is considering downgrading Greece's debt to junk status, stating that the announced €750 billion aid package will be "inadequate to stabilize the problems in both Greece and Portugal."
Ireland appears next likely to be downgraded. Spain and Italy are not far behind. And little reported is the European Central Bank (ECB) saying it will purchase billions of troubled assets from Europe's largest banks as part of the rescue program. Where have we seen this before? And gee, it's worked so well; 68 U.S. banks have failed so far in 2010, a full year after the government provided bailout money.
But it's the long-term consequences of intended ECB actions that are most worrisome. "The ECB is going to crank up the printing presses," says Anton Börner, head of Germany's export federation. "In five to ten years we will have a weak currency, with rising inflation and higher rates of inflation that will act as a break on growth."
Nouriel Roubini notes that "rising sovereign debt from the U.S. to Japan and Greece will ultimately lead to higher inflation or government defaults. While today markets are being worried about Greece, Greece is just the tip of the iceberg."
So the obvious question is, what happens to the gold price as debt contagion spreads beyond Greece and the monetary effects of the bailout slam onto the shores of other European countries?
The U.S. debt-to-GDP ratio stands at 90.1%, and the projected 2011 budget deficit is $1.26 trillion or 7.1% of GDP. Total U.S. debt exceeds $55 trillion, over $180,000 per citizen, and the new healthcare legislation is expected to add another $1 trillion burden on the economy. These numbers put America in league with our squealing European friends mentioned above.
Plus, the U.S. monetary base was ballooned and remains over $2 trillion. Are we absolutely sure governments are done printing money? How will government leaders react if bank failures continue? Or commercial real estate crashes? Or state pensions begin to fail? Or unemployment remains in double digits?
It’s clear the U.S. dollar will suffer inflation due to high and growing debt-servicing costs, government payrolls, and unfunded entitlement promises. The U.S. can either default or inflate, and the former is unthinkable to a career politician. At some point – and we think it is fast approaching – global investors will see that U.S. indebtedness has reached unsustainable levels and exit the dollar, which today means selling bonds. Interest rates will be forced higher, and the U.S. will face its own Greek Moment.
THREE: The public still doesn’t own much gold.
This may be the biggest one of all. To show just how small the investment in gold is on a worldwide scale, consider these facts:
- Jim Rogers reported that at a conference of 300 money managers last month, 76% admitted they still own no gold.
- Fund manager John Paulson is having difficulty raising money for his gold fund.
- Total investment in all forms of gold represents less than 1% of global financial assets. If investment demand merely doubles to 2% – something we see as easily attainable – it will have a powerful effect on the gold price.
What happens to the gold price when the public begins to clamor for it and a true gold rush gets underway?
FOUR: The Unknown Unknowns.
A boxing coach will tell you rule #1 is to not get fixated on the hand that’s punching you – because that’s when the other glove comes flying in and decks you, sending you down for the count.
It’s the unexpected event, the unforeseen catastrophe, the surprise punch that could catch us all off guard and send gold higher. And while we may like the green on our screen from a rising gold price, my fear is that an unexpected economic or monetary ambush could be serious enough that what the gold price is doing is a secondary affair.
Prepare for the unknown. And that, perhaps, is gold’s greatest strength – not that it can make you rich, but that it protects you and your family from unpredictable events that would otherwise be catastrophic.
Whether you agree or not that gold will reach $5,000 an ounce, don’t miss the point. Any number of events could send gold higher. And it is during calamitous times of crisis, devaluation, debasement, inflation, and the unknown that gold is needed most. Imagine the Greek worker who has one-third of his assets in gold right now; he may be smiling more than rioting.
I think the rise in price is sending us a message. And this is what I think gold is saying...
I won’t always be this cheap. If you don’t buy me soon, you may regret it. I may get less expensive in the short term, but don’t mistake that to mean I’m losing value or that everything is fine with your paper currencies or your economic future. What you’ve done to your fiat currencies will hurt you. What is coming to the price of things will overwhelm you. What the government has debased will haunt you. I’m here to protect your finances. I may be the only thing that can really do that.
You can be cautious about the price, but don’t be short-sighted about the purpose. Are you sure you own enough of me?
Closing Comments written by Rev. Dr. Briggs
As I have been predicting, regarding the soon and eventual fall of Mystery Babylon, it is clear that some economists can also see the “handwriting on the wall” but due to their lack of Biblical knowledge and faith in YHVH, they do not know how to interpret what is going on in our world and therefore cannot provide helpful spiritual advice.
As I have additional world news updates regarding end times, I will make them available.
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