“SKYNET” threatens the markets – And this time Arnold can’t save us!

Sunday, May 9, 2010
By Paul Martin

By Andy Hoffman
GoldSeek.com
Sunday, 9 May 2010

In my view, the past week represents the beginning of the second phase of the economic meltdown. Yes, it is a global crisis, in that most countries will be affected negatively to some extent. But the epicenter of this catastrophe is clearly the United States, which thanks to the abandonment of the Gold Standard in 1971 has fostered and create the conditions which threaten to wipe out countless Western currencies.

The United States, via the evil partnership between Washington and Wall Street (as represented by the Federal Reserve, the supposed “government institution” which runs monetary policy but in actuality is a private corporation owned and operated by Wall Street banks such as Goldman Sachs and J.P. Morgan), has completely and utterly destroyed itself and taken down dozens of other countries as well. Yes, they all willingly abetted the U.S. by adjusting their own fiscal and monetary policies to maximize the (short-term) benefits of the U.S. Treasury printing press, but make no mistake that New York (as well as the “pimple on it’s arse” London) are 100% responsible for the economic calamities we are currently facing, which in my view, sadly, are just commencing the “second inning” of a potentially extra inning ballgame.

As you’ve heard me say often in recent months, I have been writing less than usual due to my utter disgust with the greed, corruption, propaganda, and frankly, the pure evil I have been witnessing on a daily basis from the government, banks, and media. It often feels like I am being suffocated by such horrors, not to mention the natural disasters which have been teaming up with the man-made problems to amplify their negative effects. Starting with the numerous devastating earthquakes, such as those in Haiti, Chile, and China, the Icelandic ash cloud which has again surfaced this weekend to shut down European airports (what an ironic tale of revenge), and the devastating oil slick which continues to run rampant in the Gulf of Mexico (this weekend’s attempt to cap it miserably failed), and you almost get the sense that Mother Nature herself is showing her displeasure with how her world is being abused.

But enough with the social commentary for now. The main purpose of this article is give my views on what is currently occurring in the U.S. financial markets, particularly the equity and precious metal markets.

Since the Dow bottomed in March 2009, it rose nearly 70% in the most obviously rigged fashion I have seen in my entire career. Despite the increasing drumbeat of bad news, including rising unemployment, bankruptcies, and foreclosures, the U.S. government (aided by its “Working Group for Capital Markets”, i.e., the PPT, and its internal “Department of Fudged Statistics”), have been able to engineer a mini stock bull through the creation of trillions of dollars from its printing press and still more trillions of new debts. Add in a few trillion of bailouts (universally rejected by the populace, by the way) to the very same entities entirely responsible for this tragedy (Goldman Sachs, Citigroup, AIG, Fannie Mae/Freddie Mac, General Motors, etc.) and a fortuitous change in the FASB’s accounting rules (enabling banks to value their worthless derivative contracts at whatever they’d like), and voila, a stock market recovery was created, amazingly with the least volatility I have ever seen. And don’t forget that those same evil banks not only fudged their accounting and swindled their investors to produce fake earnings which they promptly paid back to their executives as bonuses (as well as to Washington via lobbyists), but they also gamed the system via new fraudulent trading systems which have completely taken over the stock market.

Which brings me to what has happened in the financial markets last week.

After the aforementioned 14 months of stock market bliss, accompanied by the blaring trumpets of the Washington/Wall Street/media propaganda machine that the economy has dramatically recovered, darkness re-emerged over New York, London, and the world’s major financial centers. Sadly, Newsweek (which ironically is on the brink of bankruptcy) appears likely to win the most pathetic market call award, leading its April 19th issue with a story titled “America’s Back – The Remarkable Tale of our Economic Recovery”, right at the top of the market (see below, although I wouldn’t advise listening to the accompanying because its premises are so pathetically flawed. Not to mention that, ironically, the “voice of reason” in the video is none other than Henry Blodgett, the former Merrill Lynch internet analyst (most famous for his work on Amazon.Com), who was permanently barred from Wall Street due to securities fraud. Even more ironically, Blodgett’s legal nemesis at the time was none other than Elliot Spitzer, himself forced to resign as NY Governor after soliciting prostitutes directly after he soap-boxed about immorality.

http://www.businessinsider.com/henry-blodget-americas-back-2010-4

This Newsweek article will likely turn out to be as prescient as Business Week’s August 1979 article titled “the death of equities”, written only days before the Dow commenced a 30-year explosion from 800 to 14,000.

Or perhaps as much as all the “experts” that have been forecasting that gold will collapse for the past decade (see chart below).

The Rest…HERE

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