The Great Financial Shell Game Continues

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Does the Fed Really Ever Plan to Exit from Its QE3 Purchases? – The Fed Will Keep Printing Until Unemployment Rate Hits 6.5% – Industrial Production Slowed Down Again – Is The Objective U.S. Economic Data Really Improving? – Over $400 Billion Seeking An Investment Home.

The Great Financial Shell Game ContinuesJust when you think that the devious and manipulating mainstream financial media has grown tired and bored in their efforts to toy with silver and gold prices, they surprise you once again! The precious metals had staged a significant rally back off of the lows seen a few weeks ago.

Suddenly this past week, they ran afoul of the totalitarian forces of the world’s major international investment banking cartels. These deep pocketed bandits combined their considerable powers to help sink silver and gold prices once more.

For the spot market week that ended Friday, May 17th, silver opened at $23.65 per ounce , and closed at $22.24 an ounce. This down $1.41 per ounce spot market close represented an almost six percent plunge for the week.

The financial media tyrants offered several clever explanations for this development. They claimed that the Fed is moving closer to exiting from QE3 and that the U.S. economic fundamentals are actually improving. These downright laughable theories are their latest basis for selling off silver and gold this past week.

Does the Fed Really Ever Plan to Exit from Its QE3 Purchases?

A respected piece in the Monday, May 13th edition of the Wall Street Journal encouraged the latest silver and gold bashing efforts. According to this article, the U.S. central bank, affectionately known as the Fed, is preparing to back off from its historically unprecedented money printing spree.

Even more shocking still, analysts told the mother of all mainstream financial media outlets CNBC that when the Fed quits printing money, it will not actually devastate the world’s financial and equity markets after all.

Financial Armageddon simply will not happen, even though many well known and respected economists and analysts such as Nouriel Roubini, Marc Faber, and Jim Sinclair have sagely predicted this end result. This is supposed to be because the Fed officials have carefully laid out their plans to taper off their enormous $85 billion per month buying of bonds pet project (better known as money printing in honest economist circles).

The Fed Will Keep Printing Until Unemployment Rate Hits 6.5%

The main basis for this argument is that the U.S. job market is somehow continuously and substantially improving. The Federal Reserve has flatly stated on several occasions that they will keep interest rates at historically artificially low levels of around zero percent until the unemployment rate declines to 6.5% (from its current manipulated level of 7.5%).

The money printing agenda will also only stop when a significant improvement in the labor market materializes as well. The global market strategist from J.P. Morgan Asset Management, Geoff Lewis, offered the investment banking giant’s official line that the QE from the U.S will end conclusively by the end of this year. They can not be serious!

Industrial Production Slowed Down Again

Reality gave a hard slap in the face to this argument when the government began to release its weekly economic data this past week. Industrial production in the U.S. dropped by a greater amount than analysts had been expecting for April. The Federal Reserve figures showed that industrial production declined by a significant .5%.

The Reuters polled economists had looked for this output to diminish by only .2% for April. The sub number on Factory production plunged by .4% when analysts had anticipated a .1% increase.

Another key sub number for Durable Goods Production nose dived by .6%. Most alarmingly for those fools who believe that the U.S. economy is rapidly and radically improving, factory capacity utilization sharply dropped from 78.3 percent in March down to 77.8 percent in April. This brought the reading down to 2.4 percentage points lower than its long term average.

Is The Objective U.S. Economic Data Really Improving?

The mainstream financial media and Wall Street attempted to shrug off the terrible industrial production and factory capacity utilization data as a one off data point. Next came the Thursday series of data that included a trifecta of weekly jobless claims, the Philly Fed index, and housing starts.

If the mainstream financial media’s theories are correct, then these data points all should have shown at least some improvement. How else could they justify selling off silver and gold unless the U.S. economy is growing significantly and the Fed is preparing to back out of its historically unprecedented money printing schemes?

Presto, the numbers magically appeared on your television screen. Just like that, all of the air deflated from the mainstream financial media’s balloon-like dream about a rapidly improving U.S. economic picture.

The weekly jobless claims spiked to 360,000 (versus consensus calls for only 330,000), the Philly Fed Index dropped sharply to -5.2 (versus consensus calls for a rise to 2.5), and housing starts cratered by an eye watering 16.5% for April too. You had not seen such a bad economic data hat trick in a long, long, long time!

How did the financial and commodities markets respond? In a sane world grounded in reality, you would expect stocks to potentially collapse on the news while the precious metals should shoot for the moon. Instead, the financial mainstream media managed to beat the usual and now very tired drums about the Fed continuing to support the markets with unlimited accommodative monetary policy.

They trotted out first one analyst and then another to tell you that the Fed money printing party is not over. Never mind that this was the complete opposite of what they had told you only a few days before!

This latest media blitz offensive caused the stock market to actually go up for the week, despite the abysmal underlying economic data! It gave the financial masters of the universe all the ammunition they needed to shoot down silver and gold into the spot markets’ close on Friday afternoon too.

Consider the interview and timely analysis of David Tepper, hedge fund titan who founded and still runs the multi billion dollar Appaloosa Management. He said that nobody should worry about the possibility that the Federal Reserve will taper off its enormous bond buying (money printing) program.

Over $400 Billion Seeking An Investment Home

He calculates that there is at least $400 billion within the U.S. economy that is currently seeking an investment home. Stocks will be one of those places, he knowingly promised you. Strangely enough, he was suspiciously silent about the precious metals.

But then again, consider his keynote quote in the interview before you run out and sell your silver and gold to purchase paper shares of stocks instead. “It’s a My Cousin Vinny Market.” When you hear the fantastically wealthy investment managers calling the equities markets a My Cousin Vinny Market, it is surely time to cash out your equities investments, take the money, buy silver and gold as fast as you can, and “run for the hills,” as Jim Rogers so famously said a few months ago.

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