by Howard S. Katz
9-7-09

Dear Mr. Norris:
You are wrong.
Now you must listen to my song.
The price of gold hit nine-nine-eight.
To break $1,000 is its fate.

(Note to readers: With gold ready to break above $1,000, we have an interesting opportunity to look into the minds of competing traders in the markets and find out what they are thinking. After all, for every speculator who makes money in the financial markets someone else must lose. For every long there is a short. For every buy there is a sell. In this sense the markets resemble your friendly neighborhood poker game. At the end of the night, there are winners and losers, but the total won or lost for all players is zero.

This means that to be a winner you must be smarter than the other fellow. If you can see the truth better than he can, then you can be a winner. We are fortunate this week that Floyd Norris, of the New York Times has come out with a clear statement of his economic views. Since the Times is, far and away, the most influential paper in the world, this gives us a unique insight into what the world is thinking, or will be thinking in the next 6-12 months. This gives us an important advantage in planning our trading strategy. Therefore, this week’s article is devoted to an analysis of Mr. Norris’ views)

Mr. Norris states:

“If victory [in the financial markets] is to be had, it will owe a lot to the willingness of American policy makers to set aside cherished policies and simply create money. And that is one reason it is appropriate to pause and celebrate an unheralded bicentennial: The father of the greenback, Elbridge Gerry Spaulding, who was born 200 years ago in 1809.”

“Bernanke: Greenback’s New Father,” by Floyd Norris, NYT,
9-4-09, p. B-1.

Well, there it is. Floyd Norris sets forth the exact opposite of the gold bug view. He believes that economic victory depends on the policy “simply to create money.” read more

by Jim Willie CB

September 9, 2009

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Jim Willie CB, editor of the “HAT TRICK LETTER”

Before the Hat Trick Letter was launched, a little splash was made when a Jackass Nobody wrote “25 Reasons Why Gold Will Rise” in November 2002. It was so many years ago that the piece no longer appears in archives. The motive for the article was simple. Just too much pure nonsense and genuine rubbish had appeared in the financial press about why gold was rising. ‘THEY’ claimed the gold price was rising from MidEast tensions, from new global tensions due to a False Flag attack on New York City in broad daylight, and from other factors clearly irrelevant to gold. It was not disinformation so much as stark ignorance and stupidity, perhaps even compromised marketing from the fiat bowels on Wall Street. The crack analysts in financial circles overlooked the negative real interest rates offered by central banks, as the miniscule official rates were overwhelmed by price inflation, thus rendering gold a free pass profitable investment. Stupid inane mindless drivel continues to pour out today as to why gold has reached the $1000 level. In simple English, THEY HAVE ABSOLUTELY NO IDEA WHY GOLD IS RISING. The faceless ‘THEY’ had no idea in 2002 and ‘THEY’ have no idea now. The main fallback factor ‘THEY’ turn to is a hedge against price inflation, the basic kindergarten concept. The Wall Street machine still uses mental crayons, as nothing has changed. They are too busy building leveraged contraptions and forging collusions. Those who are aware in the Mainstream are dead silent as to why gold rises, since they realize their world is to vanish.

The original litany of reasons was examined two years later in “25 Reasons Why Gold Will Rise (revisited) + 2 more reasons added” from August 2004 (CLICK HERE). A couple mining factors had cropped up, worthy of inclusion. A quick swing to the present, after the insolvent US bank system died in September 2008, after the discredited USFed capitulated to offer near 0% rates, after colossal fraud spewed from Wall Street corner offices, after fraud was compounded by the Goldman Sachs creation of Congressional slush funds for self-dealing banker benefit, after the home mortgages continued to hurtle over the foreclosure cliff, after the USEconomy continued on a path of disintegration. Here we are again with oafish hack apologist morons trying to explain the rise in the gold price. To comprehend the golden factors requires them to leap forward well past their Wall Street marketing pay grade.

GLOBAL MONETARY SYSTEM BREAKDOWN

An acute lack of gold comprehension is evident almost on a global basis. The entire system is wedded to toxic paper. For the most part, so-called experts, industry analysts, and network anchors have absolutely no idea why gold has risen above the $1000 level. They are blind to the Paradigm Shift away from the USDollar and cannot admit the breakdown of the global monetary system. Their jobs might require them to turn a blind eye to such catastrophic events. At best they might have spent their entire careers inside the noxious US$ Greenhouse Dome, unable to see from an external vantage point, in no position to see the Dome from an outside perspective. It will be interesting to observe how long the ‘SYSTEM’ remains ignorant of the massive changes taking place, as the stages they sit upon and work upon are slowly vanishing. Their claims for golden reasons are vacant shallow factors. THEY miss the major factors. They do notice a staggering amount of fiat money being created without basis, which would fall generally under item#2. The actual reasons are many. The list is somewhat debatable, subject to interpretation. Some argument might even come from within the gold community.

Basically the reasons extend from the many tentacles and ramifications of the Grand Paradigm Shift in progress, the complete overturn of the USDollar global financial system. It is being turned upside down before it goes inside out, and finally fractures into a million pieces. This is an irreversible process that is already one year into the collapse process. Here are reasons according to my analysis and perceptions. They only number 13 this time:

1) PARADIGM SHIFT away from a USDollar centric world manifested as the global revolt against the USDollar in reserves management and transaction settlement, extended from bank structures
2) colossal irresponsibility of major central banks with expanded balance sheets, money creation, and credit growth, endorsing their government profligacy
3) failure of the central bank franchise model, exhibited by the ongoing credit crisis, insolvency of banks, and desperate attempt by the US Federal Reserve to serve as the global bank
4) ruined global monetary system from the complete debauchery of money itself
5) perversion of the USDollar from required USMilitary subsidy, from coerced USTreasury Bond support, and from tacit acceptance of Wall Street corruption (past bond fraud and debt rating agency collusion without prosecution)
6) proliferation of OTC derivatives over $1 quadrillion in value with no prospect of resolution, no hope of regulation, and deep corruption, but with deadly dependence
7) gradual recognition of a financial crime syndicate having taken control of the USGovt finance ministry, that involves official channels of slush funds, bond counterfeit, and narcotics money laundering
dishonor of financial contract law, chronic lapses in financial market integrity, and constant intervention in those financial markets
9) expectation of mammoth price inflation just over the approaching horizon, unless the central bank balance sheets inflate beyond measurement in Weimar style
10) anticipation of banking system meltdown in at least the United States and United Kingdom, likely to result in bank holidays, useful for a forced Bank Consolidation with dead banks capturing the system or for a climax Wall Street theft event
11) observation of gradual economic disintegration and the decline of global trade
12) trend toward commodity stockpiles, of which gold is the financial commodity core element and crude oil is the industrial commodity core element
13) specter of numerous pockets of armed conflict, military war, and possible nuclear events, as chaos spreads and nations desperately exploit the confusion, and react to lost sponsorship relations, if not parasite-host pacts. read more

by Howard S. Katz
8-31-09

Things are looking good, dear gold bug. Characteristically gold hits its seasonal low in late summer, often in August, and then begins to rise as the month comes to an end. This late-August drift higher is a sign of the exhaustion of selling pressure and a precursor of the autumn rally (which in many years is quite powerful).

This year is better than normal. Gold hit its seasonal low in early July. Its August low was some 25 points above the July low, and the late August lift was quite evident. Tomorrow is September. Gone are those (few) sharp one-day scares that had us all so worried. They were merely the results of a few news items causing some of your weak sisters to panic and sell out. But if you follow the weak sisters (rather than regarding their fear as an opportunity to buy), then you become a weak sister yourself. read more

 Howard Katz

8.24.09

You are living in a world which is insane. All around you are the incredibly stupid people who, in the past, believed that the earth was flat and that one could fly by standing on a magic carpet. From every source of opinion comes the 21st century version of those beliefs.

Above is the 10 year chart of the CRB index. Let us consider the subjects of fact and opinion:

Fact: The CRB has been going up for the past 10 years and is now more than double its level of late 2001.

Opinion: All of the economic authority figures are screaming at the top of their lungs that we are in a period of “deflation” (by which they mean that prices are going down). Perhaps you remember the Wall Street Journal editorial and op-ed pages in 2001. They were screaming “deflation” in article after article. They were especially focused on commodity prices.

If you listened to the Wall Street Journal at that time, you certainly did not buy gold or any other commodity. Perhaps you bought stocks, perhaps some internet stocks on the NASDAQ. If you did, then let me inform you that, while the WSJ was telling you that prices were going down, it put its own news-stand price up (by 33%). Don’t they know that, when a businessman lowers his price, he sells more product, and in a general period of price decline (e.g., 1866-1896), one makes bigger profits by lowering the price to the consumer? This was how John D. Rockefeller made his fortune. He kept lowering the price of kerosene. Perhaps this is why they call him a robber baron.

More Opinion: More recently, it has been the New York Times which has told us that general prices are coming down. They were not so forward as to use the word “deflation.” Rather they used circumlocutions, such as “financial crisis” or “Great Recession.” But everyone understood what they meant. In just seven trading days in early October last year, the DJI dropped by almost 3,000 points. Commodities dropped, stocks dropped. There was a rush to buy dollars and fixed instruments, and this rush was called a flight to safety. read more