“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)

"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

To continue following Trader Dan, please sign up for Trader Dan's World at the link on the sidebar to receive a 1 month, no obligation, trial membership

Monday, March 18, 2013

Another European Domino

I am not going to spend much time providing the details of the events unfolding in Cyprus since the readers of this site are all well aware of those by now.

I do wish to note a couple of things however.

First - We are watching the inevitable effects of the experiment in socialism when it reaches its logical conclusion. When generations are either taught or have it implied to them that they can allow their governments to run up ruinous levels of debt and yet suffer no consequences whatsoever, they have little to no incentive to throw out the political leaders who hold the actual purse strings. The cradle to grave policies of the nanny state are not sustainable over the long haul. The reason is clear - politicians make promises to pay that they cannot keep. Eventually there is not enough money to cover the promises and the government is forced to borrow to the point that it can no longer afford to pay the rate of interest that creditors demand to compensate them for the risk.

We all know that the proposal to confiscate up to 9.9% of the savings accounts of those who have worked hard to amass that money is nothing more than government sanctioned THEFT. Spare us the insults of calling it a "tax" and thereby seeking to justify this reprehensible policy. People use banks because of one reason and one reason only - TRUST. Take that away and you have destroyed the foundation of the banking system.

Put yourself in the place of an average European citizen who is watching this debacle unfold before their eyes. Would you feel the least bit secure if you had now been awakened to the fact that your government's leaders had spent the nation into bankruptcy and were suggesting that as part of the solution to their folly that those same fools who ran up the debt in the first place now be permitted to raid your personal savings account to somehow solve a problem of their creation? What would you do in their situation? I tell you what I would do; I would immediately begin transferring money out of banks in any of those nations which had been on the receiving end of bailouts from the ECB and the IMF. I would move that money into gold and would not think twice about doing it. If those deposits are no longer sacred, then what is to prevent futures politicans from raiding them whensoever they please?

Once again we have collusion between the financial elites that run the monetary system and the big banks. I have nothing but scorn and contempt for these large banks who gorged themselves on various government bonds and are now in the position of watching their balance sheets go to hell in a handbasket as the value of those bonds plummet. What really makes my blood boil however is that these banks have adopted a mentality that they can go running and screaming like spoiled children to their respective political leaders to use the PUBLIC's MONEY to save them from their own damned stupidity and greed.

Excuse me, but I was once naively of the opinion that the banks existed to make loans to the public. Apparently that is no longer the case - now the banks exist in order to see money taken from their depositors to save their own rear ends for buying debt that no one in their right mind would have purchased.

I do wish to add however, that even though I am disgusted at this unholy alliance between the big banks and the monetary masters, the people in these respective nations do bear some culpability in this matter; they are not without any blame whatsoever. Last time I checked these people vote and they voted to put enough politicians in power to continue spending. As long as the people keep putting the same kind of irresponsible, short-sighted lackeys into positions of power, why should they expect these leaders to change their ways. Those who would ruin their own nations for the sake of short-term political gain deserve to be unceremoniously thrown out of office.

By the way, America, are you watching what is happening here because we are following in the same trajectory as many of these Euro Zone nations.

On gold - the flight to safe haven was on display today with that buying strong enough to propel gold through the psychological $1600 level. Watching it soar throught that level overnight during the Asian session was noteworthy because at one point, a wave of fierce selling came out of nowhere and took the price all the way back down to below its Friday settlement price. The dip did not last long - if you blinked you missed it - but it was very obvious that someone was trying to cap the price and prevent the metal from moving even higher.

All day long the move higher was being resisted by a strong overhead seller. My guess is that this is not hedge fund selling but rather selling originating from the official sector. I also noted today that the Euro, which was slammed down in Asia at one point today moved all the way back up to above the 1.30 level. The manner in which it did so looked very peculiar to me.

I hate to say that the ECB was involved when I have no proof of this but it was very odd to see anyone at all anxious to buy that currency for any reason today given the ramifications of the Cyprus mess. Maybe, just maybe, the monetary masters were out in full force today attemping to prevent a meltdown of their dearly beloved Euro. I simply have no other explanation for the midday move higher in the Euro off its worst levels.

I want to add here that their best efforts notwithstadning EURO GOLD soared higher adding 1.5% today. It is near 1237 euros as I write this. As a matter of fact, gold took off today in terms of all the major currencies again. This is continued evidence to me that gold is getting some serious attention by those who are growing increasingly disconcerted with the policies of the Western Central Banks and their respective finance ministers/leaders.

The chart below notes that various levels that have technical significance for gold. It will take a push through $1620 to really begin a short covering process in earnest. I noted in my KWN Weekly Metals Wrap interview that the hedge fund short position was the largest on record. Some of that began to come off today. There still remains a large number of those shorts however.

Ideally, gold will stay ABOVE $1600 but at the very least, it should remain above $1585 or so to suggest that it has entered yet again into a new and higher trading range.

Once again the useless gold mining shares did nothing to aid the upward progess of the actual metal as they were weak all day long and ended closing down on their lows. No wonder no one wants to own the damned things. As far as providing any decent returns on investment, they suck. What else can I say...

Currency traders had best prepare to go another week without much sleep. Sigh... maybe we can get some ingenius inventor to come up with a pill that provides the human body with the same benefits of getting a decent 7 - 8 hours worth of sleep in a night. I know I will be the first in line to sign up for that...


  1. I want to add one aspect about the developments in the Eurozone, that seem most important to me:

    What we see is a result of MARXISM and less of Socialism (which is always confused): treating things equally, that are not equal is Marxism. Ignoring the natural, biological, genetic differences is Marxism.
    Making things equal that are not equal is the reason for the problems in Europe:
    Using one currency for way to different nations like Germans and Greeks, Finns and Spaniards can only result in failure.

    Wait! Different?!? Nooo!!!
    Political correctness teaches the equality of all human beings! Nations can be built by intention! Biology, genetics, different races with different realities? Is not accepted!

    And why? Because souvereign nations are bad for free trade! Are bad for speculation. Are bad for the business of the international bankster "elite". National borders are the glibal elite's worst nightmare.

    Therefore the Euro is a 100% Marxistic product: he treats different nations equally.
    Stalin would have been proud of it. He has done so int he USSR. Also Tito. In Yugoslavia. And Benesch. In Cechoslovakia. The artificial state invented by the plutocrats as carrier against Germany.

    World government is their target and the EUSSR is the established part of world government in Europe.
    While the regime tries to dissolve the european nations with mass immigration, committing the biggest genocide in history, the next step of the globalist plutocrats will be the establishment of a free trade association with the part of world government in Northern America and the EUSSR.

    The souvereignity of the nations can be destroyed best by letting the banks rule...

  2. Goodnight Danno..
    It is the beginning of the end. That started many moons ago.
    Socialist, Communists, carry on.

  3. Dan.

    I do not think that socialism is the problem. There are plenty of examples of socialist countries that are well governed and do not have the same problems as Cyprus or the US. Start with Norway and end with Canada (sort of).

    Looking at the US from the outside, it seems that the problem is a lack of leadership and a divided (divisive) Legislative Branch. In the US the attitude seems to be either you are with me or you are against me. Republican and Democratic representatives would rather have wisdom teeth pulled than come to a compromise to move government policy forward. The problem starts there. With proper leadership perhaps the folks on Main Street would understand and support fundamental rights such as Health Care.

    So I think it is misguided to blame socialism for the economic state of the US, Cyprus, Canada or the state of any economy. The US has been on the road to bankruptcy for a long time. A country can not live beyond its means for decades without consequences. Start with Vietnam, then go to Afghanistan (see USSR as well), Iraq and bank bailouts with taxpayers money. The s*** has hit the fan in the PIIGS and should have hit the fan in the US by now but the spin doctors and operators of the printing press are more nimble in the US than they are in the Eurozone.

    As for taxes on bank accounts, thats bloody shameful because honest folks are being punished for trying to save. However in a society where tax avoidance is a national passtime what are the alternatives?

    1. Philip;

      I do not think it is at all misguided to blame socialism. The welfare state exists for one purpose -to grow itself ever and ever larger consuming more and more of the national wealth.

      Also, I fundamentally disagree that health care is a fundanmental right. It is no such thing. The fundamental rights are enshrined in the Bill of Rights.

      I am a free-market capitalist, limited government person. I believe had we stuck with those things which enabled the US to grow and become the greatest superpower ever seen on this planet, we would not be in the predicament we are in now.

      The problem goes back to too much spending, too much debt, too much collusion between big banks and corporations and government so what you end up with is an monstrosity better known as Crony Capitalism with a strong bent toward Socialism.

      As far as tax AVOIDANCE (note - that i did not say TAX EVASION which is illegal) - it is a national pastime because the state confiscates far too much of our wealth in order to feed itself.

      Also I prefer a situation in which the current administration is stuck with at least one branch of the governmnet controlled by the opposing party, even if the leadership of that party no longer represents the grass roots. At least it prevents the current administration from taking us faster down the road to insolvency than we are already going.

    2. Here is some reality ...

      major political opposition parties in the US have never existed. It has always been a dog and pony show designed to deceive the public. The globalists NWO/secret societies have controlled them from the get go. History is filled with gigantic lies.

      The same situation exists in all the other major countries. The European Union was formed without consenting vote by the people in Europe. The political structure of the European Union is like the Soviet Politburo.

      Elections are generally fraudulent. Elections have been fixed for eons.

      The "people" don't decide nothing important except which american idol contestant advances. The military/intelligence agencies operate, script and choreograph the political parties and events from behind the scenes.

      On 9/11/2001, the US government murdered thousands of american people via false flag operation on TV.

      Did you notice that there wasn't a peep of this treason from virtually any so called political parties anywhere in north america. Or the world although they did regurgitate the lies of 9/11. Wall Street kept silent also. Where were all those patriotic CEO and Presidents. Not a peep.

      Treason and violent sociopath behavior is the norm for the state. Treason is a way of life for the different major political parties who front for the rulers.

      Free economic markets have never truly existed in the 20th century and probably a rarity in history. In reality, there has never existed any true socialism or capitalism in the 20th century although there have been no shortage of people claiming the US is capitalism. The world has always been a mixed bag economic system. Ideology has always been a tool to dumb people down.

      In practical terms, Socialism and Capitalism are terms for the same system. The same ruling group extracts and minimizes the wealth and political power of the general population in both systems. They just dress their fronting stooges up in different costumes and language and use different methods to carry out the looting operations.

      The most accurate description for the economic system that has existed on this planet for eons has really been a large scale criminal operation. We could call it maybe Criminalism. It is not taught in any economic text books. It is not talked about in the media. Most of the wealth attained on this planet throughout history is acquired thru criminal operations or insider privileges usually with complicity of the state.

    3. The best post i've read ever and couldn't agree more.

      What it really all boils down to is stock management with stock being people. From ancient times and forced slavery to voluntary enslavement to basically new human aka consumer.

      Bickering about wording of how to name the same beast is waste of energy. Call it evil and be done with it...

    4. people throughout history have claimed that this or that group are behinf the conspiracy. it's really the NWO / illuminati group behind all of the above. Their disinformation agents push the this or that group idea. It's the same beast with many different names. Humans have been managed like cattle. The NWO run a highly sophisticated and advanced operation and methods. They are 20 moves ahead of the general population. Most humans will go to their grave never knowing what is happening around them.

  4. Dan

    I want to clarify that when I said tax avoidance was a national pastime I meant in Greece and Cyprus, not the US.

    Furthermore I believe that the road to insolvency in the US began much before the current administration took office. Probably sometime during the 1960's. Hard to say, really, like asking where does a river start to flow....?

    Agree completely regarding the incestuous relationship between the big banks and between the big banks and government. Not healthy.

    Not sure what is in the US Bill of Rights or the US Constitution but recall something about "life, liberty, and the persuit of happiness"? Note that was 250 years ago and today it might include something about "quality of life" not just the right to breathe. In my mind that would mean access to health care.

    I appreciate your blog and read it whenever I possibly can because it is interesting and contains a lot of good stuff, however I think we would vote for different political parties.

    1. Indeed, the road to insolvency began in earnest in the 1960s with the passage of Medicare and Medicaid -- in other words, with the first major push into socialized medicine.

      As for rights: Genuine rights pertain to freedom of *action*. There is no such thing as the "right" to the product of someone else's labor -- whether it be a free lunch or free health care. Such a so-called "right" would violate the actual rights of the person whose wealth was being seized. (Of course, today our government violates rights on a massive scale, but that does not invalidate the point.)

    2. I was thinking more on the lines of invading Vietnam in the 1960's and the cost to pay for that in terms of lives and the reduction in the value of the US dollar that has continued to this day.

      The US is the richest and most advanced country in the world. It boggles the mind that there is a segment of the population without compassion for the less fortunate in their society. Note that compassion is an action.

    3. Philip;
      Your response indicates that you do not understand the term "compassion". Compassion or Christian Charity means taking my OWN MONEY and giving it directly to those whom I have compassion or pity upon and wish to help.

      Compassion does not mean, nor has it ever meant, until it was redefined by people on the left side of the political spectrum, having the government taking my money from me BY FORCE and then redistributing that money to those from whom they hope to buy votes in the future.

      You have a warped idea of compassion when it is under compulsion of the state. Please spare us your European values in the future.

      Also, the US was founded upon a Judeo/Christian ethic which in accordance with the Scriptures teaches us" "A man who will not work, will not eat".

      An ample social safety net exists in this country which continues to grow way beyond its original intent. It was meant to be a stop-gap or temporary measure to help those who needed a hand during a time of distress. It was never intended to become what it has become today - a permanent way of life where a group of people exist off the largess of the society as a whole only taking and never giving back.

      As "DH" stated so eloquently above - Your "rights" stop when they transgress my liberty.

      One last thing - the right to life, liberty and the pursuit of happiness (or property as it was in the original Jeffersonian draft prior to editing) does not mean the right to a certain QUALITY of Life. That is European gobblygook originating out of the French Revolution with its ruinous doctrine of liberty, equality and fraternity.

      The Founders believed in equality of opportunity; not of outcome.

      You are welcome to your statist model but it is not welcome on these pages. I have made that abundantly clear in the past. I despise everything about the statist model and its liberty devouring appetite.

    4. OK Dan

      I will continue to read your Market Views however I will refrain from commenting in the future as you have requested.

  5. The pill you are looking for is Modafinil

    from http://en.wikipedia.org/wiki/Modafinil#Military_and_law_enforcement

    "In the United States military, Modafinil has been approved for use on certain Air Force missions, and it is being investigated for other uses.[96] One study of helicopter pilots suggested that 600 mg of modafinil given in three doses can be used to keep pilots alert and maintain their accuracy at pre-deprivation levels for 40 hours without sleep.[97]"

  6. Hot off the press. New Zealand is not going to "tax" STEAL depositers money to cover failing banks. Hard to keep up with all this State takeover of private citizen money scams. If that is not Socialism, I no longer understand what State takeover of private assets implies.
    Dan, you have indicated that the squeezing should begin in earnest at $1620. I have the popcorn all ready and am hoping to see some of those vertical green lines begin to sprout. It just seems when peoples money starts getting stolen that they would be ripping it out and finding some nice shiny places to hide it. Lets hope we see those "green shoots" soon!

  7. Waiting for a Sinclair post showing a soldier in a foxhole with ordinance exploding ll around...dirt flying on helmetes, loud screaming..."INCOMING"..COVAAAAAAA!!!!!!!!!!!!!!!1

  8. Thank you Dan for you relentless work here.

    I always read your articles and they relief me from the disgust I encounter here in leftist Europe on a daily basis.

    It is so saddening, shameful and painful to see how quickly most Europeans have forgotten how the US have helped us back in and after ww2. *You* in the US had to pay extra taxes back then, in order to put the Marshall plan in effect, put Europe back on its legs. We should be thanking the people of the US into eternity.

    The worst part is, almost no one agrees on opinions like yours, here in Europe. But it's good to know the US still inhibits free and just souls, and therefore remains the shining city it has always been.

    May God continue to bless you with a good heart, and may the US continue lead and teach the world. We so very much need that. Freedom is in goods hands in the US.

    Thanks again Dan.

  9. interesting cooment heard today -- how is the 3%+ healthcare tax on sales of our houses (if over $200,000+) any different than grabbing 3%+ from our savings accounts (if balance over $200,000)?? The money grabbing of our savings/investments is already in force here in the USA

  10. How is it that "European Dominoes" that have been falling constantly the last 3 years always result in a mad flight into Treasuries, U.S. retail stocks like Williams Sonoma, and commodities are sold with the utmost urgency?

    I mean really, look at crude oil, gasoline, wheat, feeder cattle, and all the rest.

    It is as if the faster the central banks print, the faster commodity prices fall.

    Gold and silver today were the exception, but commodities, resource stocks, etc. were killed while "Too Big to Fail" banks like BAC and WFC were barely hit.

    Bernanke, Draghi, and Uncle Abe will all three win the Nobel Prize for Economics after this sensational ability to manage inflation and interest rates with the sheer force of "words" and phony financial crisis.

    It really is an amazing acheivement, free money with the 10-year at 1.9% and gasoline and grains back into their relentless declines.

  11. fomc decisions haven't been kind to gold, but what has during a 5 month down run...

    gold did have a change of character by popping twice off the hit on non-farm payroll and the hit on last week's initial claims..

    ETF liquidation is still a significant drag on gold. Last week saw 518,000 ounces of metal sold overall, with nearly all of the major funds participating in the selling. This was a touch lower than the previous week’s selling (541,000 ounces) but overall the pace of outflows remains high enough to worry the bulls.

    gold/silver ratio rose for 7th straight session tuesday, let's change that on Fomc decision weds.!


  12. Thanks a lot Dan, can but agree with you about all this.

    Just one question though :
    Embry on KWN : "‘Would I rather have a bank deposit or would I rather have gold in my own possession?"
    Same from Jim Sinclair and other gold analysts.

    Why do they not consider the simplest third alternative? You can close your bank account for CASH, not for GOLD.
    Why would most people bother and convert their CASH to GOLD?
    All they would do imho is to get the cash out from their bank account and hide it somewhere.
    I don't understand the motive of such a shortcut (bank run means everybody runs to physical gold)...

  13. So it goes on. Cntrl Alt Print. Who cares anymore,go long stocks, preferably an Index as you would not want Apple or Fed X today. I cannot believe the Cyprus worry is not building in Bank Runs in Euroland elsewhere. Maybe it is? Certainly would not be pronounced in the media. Painful as I am in jail with these miners but staying on hold to see what happens outside Bens Bubble world.

  14. Another day of success by the "Master and Commander" Ben Bernanke.

    His foot is still on the gas and he's not the slightest bit worried, as the CRB index keeps falling, gold and silver moribund in a trading range, 10-yr. yield still under 2%, and the Dow made an intraday all time high again today.

    I've never heard of prosperity being created by printing money, but I guess Krugman was 100% correct all along.

    You would think by now Williams Sonoma would be at 52 - week lows and Newmont Mining at 52-week highs right now.

    However, its just the opposite...

    Simply incredible. It is almost like magic.

  15. Mark, I apologize regarding My initial outburst. I share your perplexed conclusions. Tiring. Keep a stiff upper lip and we have to know a relenktlessly incrase in both debt and fed balance sheet cannot coincide with decreasing gold silver and valuable miners. Accept my apologies for my initial aggressive remarks. I misunderstood your sarcasm.

  16. No problem wolf.

    The cold, hard, fact is that Bernanke's achievement is simply eye-popping. And now that every other central bank is now joining in the "Print Fest" to create even more prosperity.

    As long as there are Cyprus type events that pop up, that gives the world money printers to simply step on the gas, while at the same time spooked investors gobble up U.S. Treasuries and U.S. retail stocks as a safe haven.

    The odds of making this bet back in 2009 and succeeding seemed like 10,000 to 1, but it actually worked.

  17. Dan, dittos on every word. Thank you and keep up the good work you do to provide us with such valuable insight, information and wisdom. All free of charge I might add. Thank you.

  18. The only socialism in this disaster is corporate!

    The people pay for corporate malfeasance, then their paid shills (in government and the media) repeat the lie that social programs are the evil root of the problem.

    The average citizen suffers job loss, service cuts, elimination of interest on savings, pension loss, destruction of asset price (a very short list of examples)... while the corporations prosper and the executive class incomes rise exponentially while they take every opportunity to lay the blame at the foot of "the takers" who suffer the most.

    And now the game moves on to the next phase... and they will simply take what they need to repair the damage they have inflicted on the world economies from the people.

    Socialism indeed.

    1. SRV - spoken like a true believer in the cause. Onward fellow workers - unite....

      These same people who are suffering job loss are the ones who voted to put these people into power. They can vote them out anytime they wish. That they do not is a testimony to their own damned stupidity. Ultimately, people get the government they deserve.

      As Margaret Thatcher said it so pointedly" the problem with socialism is that eventually you run out of other people's money".

      Much of Europe is a testimony to that truth.

      The greatest source of prosperity has been and always will be free market capitalism. Perhaps we will see it once again in an era that is not marked crony capitalism.

      By the way, there is no lie in stating that social programs are an evil root to the problem. Southern Europe is a testimony to the fact that those nations who continue to spend money on social programs that they cannot afford, will eventually end up destroying themselves.

    2. Amen Dan,

      'Stupid is as stupid does".

      BTW, has SRV had some kind of conversion?
      Just weeks ago he was a devout commie with gay, alcoholic tendencies.... strange???

  19. Dan,

    In your field, you are second to none... regarding socioeconomic's, you clearly do not have a clue, and simply parrot the right wing, US centric echo chamber.

    Margret Thatcher, like Reagan, was a fraud... a tool of the elite. Both were canonised by a corporate controlled media who dutifully shaped the myths through smoke and mirrors while the corporate handlers set the stage for the mess we have today (after they stripped the worlds economy of all they could)... even a Conservative UK blogger gets it!


    And, who would the disenfranchised vote for to change their lot in life... Romney/Ryan? ROTFLMAO!

    @Foam Ranger - A Gump quote... nice!

    1. SRV;

      Thank you for making me wise. I feel so much better now that I have been illuminated. I can now see that free market capitalism did not produce the greatest standard of living ever known to man but rather socialism/Marxism did. Maybe I should also let the folks over at Mises.org know this wisdom so that they too can be wise.

    2. I don't know SRV.... i'm kinda fond of Bar-B-Q sauce.

  20. Scriptures teaches us: "A man who will not work, will not eat"

    Actually, Dan, this ethical rule was also included into "moral code of the builder of communism" ;-)

    2)"Conscientious labor for the good of society: he who does not work, neither shall he eat"

  21. Latest Hot Current Affairs, Entertainment News, Pictures, Videos, Latest Hot News updates, Business News, Online Marketing, Online Jobs, Mp3 Tunes, Latest Ringtones, Bollywood Girls, Entertainment Girls, Hot Girls and Most popular Affairs in the World
    Daily News updates about Latest and Hot Current Affairs

  22. Latest Hot Current Affairs, Entertainment News, Pictures, Videos, Latest Hot News updates, Business News, Online Marketing, Online Jobs, Mp3 Tunes, Latest Ringtones, Bollywood Girls, Entertainment Girls, Hot Girls and Most popular Affairs in the World
    Daily News updates about Latest and Hot Current Affairs

  23. Social Media Marketing is a very easy way for Marketing and Advertising, Now you can Get Facebook Likes, Twitter Followers, Favorites, Youtube Views,Subscribes,Likes, Google Plus Followers, Stumbleupon Followers, Digg Followers, Websites Visitors and Much More.
    Just Visit the Website and Start Promoting now without any Charges


Note: Only a member of this blog may post a comment.