Precious Metals: Breakout, Fakeout or Shakeout? 40 comments
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The recent move in gold and silver may be an important top, a decisive breakout or a prelude to a shakeout of weak hands before the real move. Let's examine the potential scenarios.
BULLISH: IT'S A MAJOR BREAKOUT
Since the move has been to the upside we'll examine the bullish view first. From a fundamental perspective, gold bulls cite the massive inflationary forces unleashed by the world's central banks and governments as well as the systemic risks to the global economy stemming from the ongoing debt bubble. Some proximate causes for the recent surge in metals prices may be China's call to its citizens to accumulate gold and its central bank's plans to step up its gold buying program. Rumors are also circulating that China will refuse to honor derivative contracts made with Western financial institutions. There are also concerns about a collapse of the Shanghai stock market. And of course worries of another September-October debacle in financial markets are rampant. In short, systemic risk, whether real or imagined, may have been an important factor in the recent surge and may continue to feed a bullish move in precious metals prices. The recent price move and any additional run may be forecasting financial, economic and political conditions currently known only to the market's collective intelligence (and the select coterie of elite insiders that run the planet). It's also worth noting that the spike in metals occured without any accompanying drop in the US Dollar Index. Is gold anticipating a breakdown in the Dollar? The gold bull may be driven higher and higher as governments and institutions seek to diversify out of the dollar.
On a technical basis, from September 2-3 gold and silver staged an impressive breakout from an intermediate term triangle formation. Here's the chart:
We can see that price leapt over two major levels of resistance without a pause and came to rest at the final downtrend line formed by its two prior peaks. There was an associated spike in volume on GLD. Also note that a bullish 50/200 EMA crossover occured back in January. Also, RSI appears to have undergone a range shift with low RSI readings in the 40's. Price is now challenging the neckline of what would appear to be a massive reverse Head and Shoulders pattern.
Silver's move is potentially even more bullish than gold's as it leapt over the upper boundaries of both intermediate and long term triangle formations. Unlike gold, all of its moving averages are rising sharply.
It's important to see confirmation of any bull move in the metals with and associated move in the gold and silver mining sector. Here's the chart of GDX, the precious metals miners ETF:
The miners have also broken out of an intermediate term triangle consolidation after having previously trumped its bear market downtrend. The move came on record volume and a golden cross has been in effect since May. The ETF broke through the lower boundary of its horizontal resistance zone easily this week.
BEARISH: IT'S A TRIPLE TOP AND A FAKEOUT
Gold has gone absolutely nowhere as the rest of the commodity complex and equities have surged in spite of the greatest financial crisis since 1929 and the most awesome monetary inflation since the Weimar Republic. The recent move came on a week preceding a holiday when many market participants were on vacation. In general, markets experienced low volume. It may have been easy for traders to push the very small precious metals markets around under these conditions. Momentum traders, with little else to jump on, may have piled on board, pushing the move along. Although volume was above average on the metals ETF's it was not spectacular in comparison to past volume spikes. Since the general market action was uneventful, the financial news media chose to focus on the metals move as well, featuring stories about the "inevitable" move to much higher prices.
Sentiment on the precious metals is almost uniformly bullish. A survey of blog and guru sites turned up ONE article which advised caution at this time. Even more ominous, CNBC and Bloomberg have been pumping gold and silver for over a year and gold also went public as television, radio and print ads for gold swamped the media from the Superbowl forward until very recently when they went dark. Everyone who could possibly want to be in gold has been brought into the trade. If you were to review the blogs and postings of die hard gold bug analysts you would find that they have all opined at one time or another that when the public is widely involved in gold that that would be the top. Well this has happened...and without a commensurate bubble run in the metal. Yet there is strange silence on this major contrarian signal. It may be the most crowded trade in the markets today for the size of its market. The most crowded trade in the world (perhaps in the history of financial markets) is short the US Dollar. From a contrarian perspective this is a big red flag.
One might also contemplate that gold has enemies in the highest of places with the ability to sell phantom metal into the COMEX at will. They can also spark a bull move in the Dollar with any number of moves.
The long term chart shows a massive triangle top. Compare the chart of gold below to the chart of copper before its bubble burst. They look very similar. Could gold break out from here? Sure it could. And it could be a bull trap as well. This may very well be the chart of a distribution top.
Let's look at that gold chart again. Note that readings of RSI 70 have consistently marked tops and that this has been frequently associated with volume spikes on the GLD.
Many are seeing a reverse Head and Shoulders formation here but do not question that a bottoming formation does not generally form at a top.
The same thing holds true for SLV, the Silver ETF:
We can also see that silver is currently at major horizontal resistance. An immediate, sustained move above horizontal resistance for both silver and gold would be a serious systemic risk signal. How likely is that?
GDX has also seen selloffs associated with readings of RSI 70 and spikes in volume. Like the gold and silver ETFs the high volume spike may be attributed to traders piling on to the only hot trade around during a light holiday week. It is also trading at a zone of major horizontal resistance.
Gold and silver are commodities. The commodities market is anything but on fire. In fact, it has seriously underperformed world equities and is showing clear signs of being in a bear market. How likely is it that the precious metals will diverge from the entire commodities complex and surge higher? That would be an extreme systemic risk signal indeed! Let's look at some charts:
Objectively these are charts of a market that is now in a bear trend after a speculative bubble. The near term and long term for CRB is sideways to down.
Could crude oil break out from here? Sure. But it is trading up against its long term uptrend line which has rejected price three times already. RSI is in a downtrend. Equities have made much higher highs but crude oil has not.
Even after the massive money printing by central banks and Keynesian spending by governments worldwide that we have seen in the last year commodity prices are not keeping pace with equities. While stocks continue to surge higher, commodities are lagging, particularly since June. The CRB: SPX ratio is showing a definite bear trend.
The Metals and Mining ETF (XME) shows a similar dramatic underperformance and topping formation.
With any luck gold will not repeat copper's performance when it broke out to new highs after a very similar period of volatile consolidatin that turned out to be a distribution pattern.
The Dollar, which generally trades against gold, is showing signs of bottoming. Only in the case of an extreme systemic risk profile could the two rise strongly together for a protracted period of time. Is another wave of financial crisis in the offing? How likely is that?
Could the Dollar plunge from here and begin the much looked for "collapse" that gold bugs have been anticipating for the last 30 years? Sure! It could happen. But the technicals do not seem to support that outcome at this time.
Under the bearish scenario, a plunge from here (or higher) back into the triangle and a weekly close below GLD 92 would signal an end to the bull market in precious metals. Gold and silver will join the rest of the commodities complex in a bear trend, trading sidways to down for a protracted period of time.
LONG TERM BULLISH, INTERMEDIATE/SHORT TERM BEARISH: A SHAKEOUT OF WEAK HANDS IS NEEDED
Overall the above evidence--barring another as yet unforseen "Black Swan" type of event--seems to be weighted towards the bearish side. One could conclude that on a short to intermediate term basis a bit of fear needs to be injected into the precious metals markets with a serious shakeout. Hopes need to be dashed, regret needs to be engendered and towels need to be thrown in. Markets just love to do that to investors as a matter of course. Once such a process of clearing the fast and weak out of the market has been undertaken, then the precious metals may be set to take their long-anticipated trip "to da moon". Under this scenario, support may be found around the breakout from the recent triangle formation. There may be a period of backing and filling between that level and the highs until a final breakout after a period of time sufficient enought to vex and perplex the maximum number of traders and investors.
Where do I stand? "I'll take Door #3, Monty." Unless a nasty Black Swan is waiting in the wings (and that is a possibility), then the overall technical and sentiment picture does not favor a sustained move above the 1000-1032 level at this time. I'll be trading in and out of the metals and trying to make some money on the volatility since I don't think that there will be a sustainable trend in either direction. Meanwhile I'll keep my eyes and ears open for the flapping of black wings in flight.
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This article has 40 comments:
I agree, because Seabridge Gold (SA) has been lagging other miners in the past week. SA has often anticipated moves in the price of gold in the recent past. (I suspect traders use it as a leveraged play on gold.)
If they didn't take off as a safe haven in the past year, they more than likely won't in the near future, However, if rapid inflation wins out in the inflation/deflation argument, they will also both climb rapidly. When this occurs is debatable, even among SA readers. Presently, there are too many variables to make a solid prediction.
Excellent article Steven..
I believe a lot of us are hearing the sounds of wings already…
1)You suggest that gold has not performed in a year of financial crisis. There are few assets close to their all time highs apart from gold, so....
2)You suggest that everyone who could possibly want to be in the trade has been brought in to gold. Actually the allocation to gold among the big funds (pensions, general mutuals etc.) remains close to zero and the same applies to the major wealth managers. Gold remains a minority interest among private investors, albeit with a widening circle, but we have not begun to travel the slope of broad acceptance.
3)You suggest that a shake out is needed before gold can take off. Possibly, but I think you overstate this. Gold's consolidation over the past year has been one of the lengthiest in the current bull market and sellers have been thinned out already. We may well see what lies behind door #3, but I suspect it will be a small room that no one wants to remain in for long...
Copper is viewed as an industrial metal; thus, the sell off that came during the great recession scare of '08 as evident in the chart. Gold on the other hand is seen as an alternative currency.
If you compare the gold chart with the copper chart for the same time period, both metals got hit in the liquidation we saw last year. Copper fell almost 70% and gold fell about 30% (silver about 60%). So gold, or silver for that matter, was not immune to the plunge that copper took, albeit not as much.
What else can you put in your pockets, and go shopping with, that will buy as much -or more- than it did yesterday?? Bullets?, Seeds?.
What's the only thing a Zimbabwe resident could do to buy a loaf of bread??.
Ans: Go to the river with a pan, and come back with gold.
Let's not be too investment minded and make a cerebral complex puzzle out of this. Everyone knows that unless Bernanke is able to turn all the economic laws of the centuries on their heads for the first time in history, economic Armageddon is not far off.
And the mood of the Country is not reassuring!.
As JPM said, "Gold is money. Nothing else is" (except silver). Gold and silver do not change. Honest men have used them to store their wealth for eons. Only the paper/electron currencies change and they all just went down vs. gold, as they always inevitably do over the long term on their way to their intrinsic value of zero.
The markets? Wall Street fraud king banks are all insolvent zombies, yet while loan defaults and the derivatives death star loom, share prices soar. S&P P/E ratio is stretched over 100 to 1 even with fake earnings thanks to FASB sellouts. Gangsters running gubmint, printing/keying more fake money, handing it to their pals, skimming 100 million daily using computer trading and front running with the exchanges. CFTC pummels oil longs while banksters short 200,000 gold and 40,000 silver contracts. China revolting against the UK-US bankster cartel, frantically swapping FRN$ for resources, doing currency swaps, stockpiling gold, promoting silver, its stock market tanking again, saying bleep you on contracts "hedging" aforementioned silver shorts. Hahaha!
October stock market crash to new lows seems imminent to me, even with prices propped up by money printing and porkulus/scamulus.
After the stock ring is piled high with towels, starting late October to November, those who stampeded to "safety" of FRNs, Treasuries and bonds, will get vaporized in the dollar collapse through 2010. Real gold and silver (not paper) will be the only things left standing among the crispy critters in the twisted smoking wreckage.
Fundamentally, technically, interventionally (?), I would not want to be short silver or gold right now, unless I could create money and steal the metal to cover my positions.
Disclosures: Long physical gold, silver, steel, lead, food, rope
On Sep 06 09:13 AM highlarche wrote:
> I still say 1200 to 1500 by end of year.Pakistan and Israel are big
> threats to the world.
If you trust your government(s), then by all means sell your gold and buy real estate or invest your hard earned dollars in the stock market.
Good luck!
I had "sideways" options plays that I decided to exit as GLD traced out a narrowing RS (or pennant?). While it would seem to be trying to break out to the upside, I was confused by the so-called H&S for precisely your reason....
"Many are seeing a reverse Head and Shoulders formation here but do not question that a bottoming formation does not generally form at a top."
so I pulled out my John Murphy Technical Analysis book. The "reverse H&S" can be a continuation pattern, however it is the "exception rather than the rule".
Regrettably not much is said to clue us in on whether it will be "a continuation H&S". I would note, however, that as we found out with the S&P's failed H&S, a failure can lead to a swift reversal.
Thia futher complicates the "reverse H&S" pattern because it seems to mean that NOT ONLY does it need to breakout, but if it does, it needs to come back and retests the breakout. If it fails the retest, it could result in a violent failure and thus a swift move down.
Although I don't know which "door" to pick, for these reasons, I've decided to not even play the game right now.
I might not be playing because I just read "Reminiscences of a Stock Operator". The one thing that (in this book) Livermore taught me is "let the markets tell you". So I repeat, not only does GLD have to break out, it has to come back and successfully retest.
Whatever the case, I think the hype and volatility will be beyond imagination. So rather than guess, I'll "let the market tell me".
Check 2005. You will see this was a period of US dollar strength that was the beginning of a move from $400s to $730.
In the other hand , India is controlling silver importations 'cause silver scarcity and chances of disrupting the little SILVER market with its huge needs during India festivities.
BUT , MORE IMPORTANT : ITS SEEMS CHINA IS TRYING TO KEEP SILVER FOR THEMSELVES : SELLING TO ITS PEOPLE INSTEAD OF EXPORTING SILVER WITH A SUBSIDED AND MANIPULATED US/COMEX PRICE !!
All those silly futures, swaps , derivatives and options investments will have a hard time to get the real thing !!
On Sep 06 06:52 AM Roger Knights wrote:
> "the overall technical and sentiment picture does not favor a sustained
> move above the 1000-1032 level at this time."
>
> I agree, because Seabridge Gold (seekingalpha.com/symbo...)
> has been lagging other miners in the past week. SA has often anticipated
> moves in the price of gold in the recent past. (I suspect traders
> use it as a leveraged play on gold.)
One thing that went unnoticed last week to a certain extent was North Korea comming out claiming they now can make nuclear weapons, or statements to that exent, i could see a black swan event brewing here.
Door number 3 shortly for me though.
Will the last person left on Planet Earth please turn out the lights? Thanks.
If gold is in an inverse H&S, then the count is somewhere around 1200. Might drag silver past the old high of $50.75. Lots of room to grow even from here.
SLV is acting like a rabbit with its tail afire. If annual production is indeed 700 million oz +/-, it doesn't take many devalued dollars to push the market big time. Look what the hedge funds did to the much more massive oil market. A couple committed buyers (Soros, Ackman, Paulson etc) plus little guys could make silver the play of the 12 months.
As someone who has watched these markets on and off for 35 years (geez has it been that long?!!!) it sure looked like wings were flapping. It looked like serious panic buying across the board - gold, silver, AEM, ABX etc etc. In fact buying in the big miners indicates expectation of significantly higher prices for a fairly extended period of time and purchases by bigger institutional entities. The action on Friday was a tiny bit "reassuring" that collapse was not imminent that day as I am not as "ready" as I would like to be. As someone who was "right too early" i.e. wrong, it is interesting to note that 1 of the many investors I put in gold in the 80's are still there. (Thanks Sis). BTW, her new "investment advisor" has absolutely no use for PMs. The gold trade may be overcrowded but not with anybody I know.
I do think there is a fairly successful manipulation of the gold price as so many governments would be in a panic if their currencies were to plunge in terms of gold. The public does eventually catch on. And, the high prices encourage exploration and production by miners, some of whom have to hedge to lock in profits if they want to stay in business.
Having said all that I think the near term as well as the longer terms may continue to be up as this is the fourth shot at 100 on GLD, (sooner or later it is going to give) silver is acting like Bunkie Hunt is back in the biz, and "everything is looking better", "the worst is behind us" "we've turned the corner", "the FED has an exit strategy", "there will be no problem pulling liquidity from the system" etc.
Finally, our trading partners really may be diversifying out of dollars. As we have seen with copper, they can keep buying for extended periods of time.
Good luck to all.
On Sep 06 08:34 AM John Bowman wrote:
> I will also go with door #3. Graphs are great to look at when it
> comes to gold and silver, but they both seem to have a life of their
> own during this period of uncertainty.
>
> If they didn't take off as a safe haven in the past year, they more
> than likely won't in the near future, However, if rapid inflation
> wins out in the inflation/deflation argument, they will also both
> climb rapidly. When this occurs is debatable, even among SA readers.
> Presently, there are too many variables to make a solid prediction.
On Sep 06 09:13 AM highlarche wrote:
> I still say 1200 to 1500 by end of year.Pakistan and Israel are big
> threats to the world.
On Sep 06 09:15 AM AussieDi wrote:
> I won't bet against the Chinese Government. They have massively increased
> their gold holdings over the past few years and are now recommending
> that their people buy gold and silver bullion. I don't think the
> impact of this has really been factored in yet. Hong Kong has taken
> control back of their physical gold from London. If the head &
> shoulders on the gold chart is right then I'm looking for some profits
> around $1300.
On Sep 06 10:54 PM MILESCFA wrote:
> An excellent article!
>
> I had "sideways" options plays that I decided to exit as GLD traced
> out a narrowing RS (or pennant?). While it would seem to be trying
> to break out to the upside, I was confused by the so-called H&S
> for precisely your reason....
>
> "Many are seeing a reverse Head and Shoulders formation here but
> do not question that a bottoming formation does not generally form
> at a top."
>
> so I pulled out my John Murphy Technical Analysis book. The "reverse
> H&S" can be a continuation pattern, however it is the "exception
> rather than the rule".
>
> Regrettably not much is said to clue us in on whether it will be
> "a continuation H&S". I would note, however, that as we found
> out with the S&P's failed H&S, a failure can lead to a swift
> reversal.
>
> Thia futher complicates the "reverse H&S" pattern because it
> seems to mean that NOT ONLY does it need to breakout, but if it does,
> it needs to come back and retests the breakout. If it fails the retest,
> it could result in a violent failure and thus a swift move down.
>
>
> Although I don't know which "door" to pick, for these reasons, I've
> decided to not even play the game right now.
>
> I might not be playing because I just read "Reminiscences of a Stock
> Operator". The one thing that (in this book) Livermore taught me
> is "let the markets tell you". So I repeat, not only does GLD have
> to break out, it has to come back and successfully retest.
>
> Whatever the case, I think the hype and volatility will be beyond
> imagination. So rather than guess, I'll "let the market tell me".
>
On Sep 06 10:40 AM O-B-WON wrote:
> "Meanwhile I'll keep my eyes and ears open for the flapping of black
> wings in flight."
>
>
> Excellent article Steven..
>
> I believe a lot of us are hearing the sounds of wings already…
On Sep 06 11:17 AM secmaven wrote:
> The rumors of CTFC position limits drove this move. If JPM is restricted
> in its ability to manipulate the market then the hedge fund industry
> generally and commodity players of all stripes will have a their
> own field day manipulating the market. There are many Hunt Brothers
> out there in 2009.
I agree that fiat money is a pox on our economy and fosters endless moral hazard. But it is the system that we have right now and within the parameters of that system it works in its own perverse, twisted way. And the fact is that the US Dollar is the world reserve currency and if the world economy is in recovery and if world commerce increases the demand for dollars will increase. If you want to conduct commerce you need dollars.
On Sep 06 11:12 PM Slvrizgold wrote:
> The US dollar does NOT need to collapse for gold to rise strongly.
> The FACT is that ALL paper fiat currencies are pieces of garbage
> that pay no interest and are undergoing "Quantitative Easing" (MONEY
> PRINTING! So the US dollar could hover in the 70-80 range for a
> long time and gold could rise massively against all currencies.<br/>
>
> Check 2005. You will see this was a period of US dollar strength
> that was the beginning of a move from $400s to $730.
On Sep 06 11:52 AM The Recusant wrote:
> This is the most balanced assessment and understandable analysis
> of the current situation presented online to date. Great work!--now
> contribute articles on PMs like this more often for us chart-challenged
> readers. Thanks.
On Sep 06 05:32 PM optionsgirl wrote:
> if you said Pakistan and Iran are big threats, that I'd understand.
> If you even said Syria, I could see a case for it. But Israel? <br/>
Just compare what gold and gold stocks have done in deflationary recessions, as well as inflationary doldrums. Gone up or held value.
We are in a deflationary deleveraging, which will be followed by inflation. Gold will hold it's value or go up. Equities and banks will go down.
Gold at a huge market low is fine or if you are trying to make a quick 10% trading
But a large cap multinational is a better hedge against a weak dollar Done believe me ask warren Buffett
On Sep 07 01:33 PM Steven Vincent wrote:
> Thanks for the compliment. I do think we have just seen a pretty
> big black swan blot out the sun with its wings so the chances of
> another one so soon after may be pretty small. I does seem like the
> government is determined to have a Swine Flu pandemic by any means
> necessary. That could really screw up the economic recovery.
On Sep 07 02:03 PM Steven Vincent wrote:
>. And the fact is that the US Dollar is the world reserve currency
> and if the world economy is in recovery and if world commerce increases
> the demand for dollars will increase. If you want to conduct commerce
> you need dollars.
On Sep 08 03:24 AM explorer30 wrote:
> Check this out, guys, Gold is going go heaven as there is no tomorrow.
>
>
> September 7, 2009
>
> Japan Joins Chinese Assault Against West, Vows To “Destroy” America
>
>
> By: Sorcha Faal, and as reported to her Western Subscribers
>
>
>
>
>
>
>
>
>
> Russian foreign policy experts are becoming increasingly alarmed
> over the growing relationship between Japan and China after the historic
> election win of Yukio Hatoyama’s Democratic Party of Japan (seekingalpha.com/symbo...)
> which, according to these reports, will enable the new Japanese Prime
> Minister to fulfill his long sought after goal of “destroying” what
> he has called the “stranglehold” the United States has long maintained
> on his Nation and its people since their defeat at the hands of the
> American’s during World War II.
>
> In a statement Hatoyama released prior to his election win titled
> “Toward an even greater victory for the people” he stated the course
> his new government would take by saying:
>
> “We would like to bring about policies that look 30 years or even
> 50 years into the future, and radically question the shape of the
> Japanese nation itself. Our national goal based on a spirit of friendship
> is to create an East Asian community. It goes without saying that
> the Japan-U.S. Security Treaty will continue to be the core of Japan's
> diplomacy. At the same time, however, we must maintain our identity
> as an Asian nation.”
>
> And to Hatoyama’s growing anger against the United States over its
> current economic policies he recently raised fears in Washington
> by saying:
>
> “The financial crisis has suggested to many that the era of U.S.
> unilateralism may come to an end. It has also raised doubts about
> the permanence of the dollar as the key global currency. I also feel
> that as a result of the failure of the Iraq war and the financial
> crisis, the era of U.S.-led globalism is coming to an end and that
> we are moving toward an era of multipolarity.”
>
> [Not known to many American’s about the new Japanese leader Hatoyama
> is his families (who the Japanese people liken to the Kennedy Family
> of the United States) long-standing ties with the most conservative
> and radical elements of his Nation’s war making past, and whose grandfather,
> Ichirō Hatoyama, was tapped by the CIA to replace Japanese Prime
> Minister Shigeru Yoshida whom they had planned to assassinate in
> a 1952 coup plot led by militarists and suspected war criminals who
> had worked for US occupation authorities after World War II.]
>
> Equally concerning for the American’s is Hatoyama’s vow to remove
> all 8,000 US Military personal from their continued occupation of
> the southern Japanese island of Okinawa where they are branded as
> “sexual terrorists” due to their repeated raping of women and young
> girls.
>
> But to the greatest fears of the American’s is Hatoyama’s joining
> with China in that Nation’s quest to destroy what is left of the
> now teetering Western economic system that has plunged our World
> into the catastrophic abyss of ruin for the sole benefit of a few
> elite European royal, US, and British banking families currently
> controlling our Earth’s wealth through deception, trickery and outright
> theft, and as we had previously reported on in our September 3rd
> report “China Shocks West With Threat Push US-EU Into “Dustbin Of
> History”.
>
> And towards the American fears being realized, Hatoyama is now pledging
> to “increase social welfare, better protect workers and do away with
> American-style, pro-market reforms to lead the country out of its
> long slump” he has always blamed on his countries blind following
> of US dictates.
>
> China, meanwhile, is continuing its assault upon the United States
> with senior Chinese communist leader, Cheng Siwei, now warning that
> because the United States Federal Reserve won’t stop printing worthless
> money, it will “compel China to redesign its foreign reserve policy”
> in a further move of Asia distancing itself from the US Dollar as
> a Global reserve currency.
>
> China has also accelerated its shedding of US Dollars with new reports
> showing its Sovereign Wealth Fund is dumping the American currency
> in favor of gold and other strategic commodities while at the same
> time urging its over 1 billion citizens to begin doing likewise,
> and who in 2008 were the world’s largest gold producer, second-largest
> consumer and fifth-largest holder of gold reserves.
>
> And in further fatal blow to the American economy, whose debt for
> this year alone is nearing the staggering toll of $11 Trillion, China
> has opted out of buying any more American debt and has, instead,
> purchased $50 billion in newly created International Monetary Fund
> bonds to protect their future worth.
>
> To all of these moves against the United States by China many analysts
> and financial experts are now warning that the Americans are about
> to see the catastrophic collapse of their largest banks after their
> receiving letters this past week indicating that Chinese State Owned
> Enterprises would be given the “green light” to default on their
> derivatives owed to these Western “banksters”.
>
> So dire has the situation in the United States become, and where
> over 6 million of their citizens have lost their homes, Russian Professor
> Igor Panarin is now warning that “events are continuing to confirm
> his doomsday prediction first made over 10 years ago, that the United
> States will completely collapse like the Soviet Union before the
> end of 2010, and warns that the chaos could begin to unfold in as
> little as two months.”
>
> Professor Panarin, doctor of political sciences and professor of
> the Russian Diplomatic Academy Ministry of Foreign Affairs, further
> warned the American’s by saying, “Today I received another confirmation
> that the collapse of the dollar and the US is inevitable. Japan’s
> Democratic Party won the election, and I’d like to remind you that
> its leader [Yukio Hatoyama] has the snubbing of the dollar among
> his economic plans. In plainer words, he plans to transfer Japan’s
> monetary reserves from US dollars into another currency.”
>
> To the American people, of course and as always, the nightmare about
> unfold around them they continue to remain oblivious to due to their
> propaganda media organs failing to give them the truthful information
> needed so that these witless souls may protect themselves. And, perhaps,
> no greater illustration of how manipulated these Americans are can
> be seen then in their being whipped into a frenzy over the Islamic
> Nation of Iran’s flawed elections, but nary a one of them being told
> that the election their government created for their “ally” Afghanistan
> produced the absurd result of the Western backed President Karzai
> took 100% of the votes in his oppositions stronghold.
>
> And saddest of all, those like us who continue to tell them the truth
> are the ones reviled, not the ones who continue to speak to these
> people like they are children. But then again, in truth this is how
> most of them act.