- Wall Street insider says gold at “good entry point” after nearing probable “bottom”
- Syria gets the privilege of being bombed by Nobel Peace Prize winner
- Jim Bianco reminds us that Fed is again trying to fake us out
- Silicon Valley is carefully crafting its latest hot release — a massive stock bubble
- And much more!
On Monday, the U.S. Special Operations Command held a meeting in Tampa. The topic at hand: how to disrupt ISIS finance. “Cryptography and cyberwarfare,” our man on the inside reports, “were the weapons of choice.”
When we last spoke, he was just returning from the meeting. He promised to follow up ASAP with unclassified details. More as the details come in…
Today, the Dow is down 116 points, to 17,055. The Nasdaq is down 19 points, to 4,508. Gold is down $3 an ounce, to $1,217.50, and silver is down less than a dollar, to $17.60
Gold futures jumped up on Tuesday after President Obama stepped up physical efforts in Syria. The December contracts reached $1,222.
“As gold hit $1,208,” asserts, “one of the world’s largest hedge fund managers told me, ‘It looks like a bottom.’ We’ll see. $1,208 is definitely a good entry point.”
Syria is now the seventh Muslim country to gain the honor of being bombed by the 2009 Nobel Peace Prize recipient.
“We’re going to do what’s necessary to take the fight to this terrorist group,” President Obama said Tuesday, before traveling to New York for meetings at the U.N. He cautioned that the effort “will take time.”
The bombing campaign marks the first U.S. intervention in Syria’s civil war since it began in 2011. It was intended to strike at strongholds of the Islamic State of Iraq and the Levant (ISIL)… or ISIS, or IS, or Daesh or whatever you’d like to call them.
“They will take the fight to us,” warns ominously. “The disintegration of Iraq is far from over. The situation will deteriorate further, putting upward pressure on oil prices. The ISIS-Sunni drive to Baghdad has been temporarily slowed due to the Shiite call to arms, and Iranian intervention on the side of Shiites and the former al-Maliki government. ISIS, sensibly, is regrouping and consolidating gains while awaiting further aid from its Saudi sponsors. All of this is a prelude to much larger battles to come…”
He also says that there is more to the U.S./Iran relationship than most people have even dared to speculate:
“The relaxed reaction from the White House to the situation in Iraq is easily explained by the fact that Obama reached a detente with Iran last December when he announced a framework for agreement on Iran’s nuclear programs and removed some economic sanctions.
“Obama’s foreign policy vision is one where the United States withdraws from the world but leaves behind regional ‘cops on the beat’ who keep order in their neighborhoods. Iran is Obama’s preferred cop on the beat in the Middle East, so the United States is relying on it to restore order in Iraq without quite saying so.”
Turning to finance, Most investors expect the Fed to raise interest rates next year. They must have short memories, says The 5 PRO’s Dan Amoss.
“St. Louis Fed president Jim Bullard reflects the FOMC’s consensus view. Yesterday, Bullard forecast that the Fed would raise rates in the first quarter of 2015. Why? Because his economic projections are rosy. Bullard projects 3% GDP growth both this year and next, declining unemployment and ‘fairly rapid jobs growth.’
“The Fed consistently overestimates the economy’s strength. Its Keynesian worldview sees the complex economy as a simple widget factory, with commoditized employees. The Fed also fails to appreciate the increasing financialization of the economy.
“Debt has saturated every corner of the economy. Consumer debt has pulled forward so much consumption from the future that when the future arrives and consumption slumps, the Fed feels compelled to walk back from its rate hikes.
“This great quote from Jim Bianco of Bianco Research reminds us just how short investor memories are:
‘A lot of people forgot this — [the Fed] actually tapered QE1. We’ve been through this exact exercise before. They stopped. They told us they were done. Then four months later, they gave us QE2. They abruptly stopped QE2 in June 2011. Again, they said they were done… Then they gave us Operation Twist. Then they promised us that they were going to end Operation Twist in September 2012, but as that date drew closer, they said, ‘No, we’re going to extend it.’ And then they said that they were going to extend it and gave us calendar guidance. They dropped that. They gave us forward guidance. They dropped that. They gave us threshold guidance: 6.5% unemployment, 2.5% on the inflation rate. They dropped that as well. This is, depending on how you measure it, either the fourth or sixth attempt by the Fed to stop QE… We’ve been down this road many times with the Fed. They’ve promised us they’d be done, markets get a little wobbly and then they start back up again. So I’m skeptical that we’re seeing the end of QE just yet.’
“Do you see a pattern? The Fed cannot tighten without popping the credit bubbles it’s blown.”
Why all the discussion of QE anyway? The short answer: bathtub “bubble” economics.
“The meltdown in 2008 was not a meltdown. It was sort of a half-meltdown,” our guy explains. The Fed’s intervention “truncated” the meltdown.
“Think of it as a bunch of dominoes falling. All the dominoes are going to fall, but if I drop a steel curtain between two dominoes, that’s going to stop. That’s what the Fed did.”
But the bad debt still exists. The “too big to fail” banks are even bigger than they were in 2008. Now, he says, the next step in the collapse is on the way. “The next time it happens, it’s going to be bigger than the Fed, and that’s why they’re not going to be able to stop it,” he says.
Our source notes that the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and G-20 of world’s largest countries have all indicated that we are in a bubble right now. “If you get caught, it’s on you.”
The bubble isn’t just in the banking industry, either. Case in point, several big-time Silicon Valley insiders stated publicly recently that the valley is deeply overleveraged and approaching “tech bubble” heights.
Bill Gurley, one of the most successful venture capitalists in the world, told The Wall Street Journal last week that “Silicon Valley as a whole… is taking on an excessive amount of risk right now — unprecedented since ’99.”
Fred Wilson of Union Square Ventures echoes this sentiment on his blog, railing against the widely accepted model that it’s acceptable for companies to be “Burning cash. Losing money. Emphasis on the losing.”
George Zachary of Charles River Ventures writes, “It reminds me of 2000, when investment capital was flooding into startups and flooded a lot of marginal companies. If 2000 was a bubble factor of 10, we are at an 8-9, in my opinion, right now.”
Which bubble pops first remains to be seen…
“Today,” says FDA Trader’s Paul Mampilly, “I’m going to show you the secret way by which ‘insiders’ make money.” He told his readers this month about a little-known ‘buy’ signal — the “5635(c)(4) rule.” “You should know that the 5635(c)(4) rule references a very unusual situation,” he goes on. “This situation happens rarely. But when it does happen, you should pay careful attention, because most times, it’s telling you that a stock is about to soar.”
An Arab bank was found liable for attacks in Israel by Hamas yesterday in a New York court, reports Bloomberg News.
The bank, Arab Bank Plc, is Jordan’s biggest lender and was determined by a jury to have done business with at least 150 Hamas leaders in the early 2000s.
“The verdict is an incredible message that should be understood and heard by the entire financial community — if you do business with terrorists, you can be held liable” one of the Plaintiff’s lawyers told Bloomberg.
By the way, you may have heard that President Obama often uses executive orders to sidestep Congress…
But I’ll bet you haven’t heard the crazy story of how he’s using his executive powers to hand out a fortune to a select group of companies. As a result, their stocks have been going through the roof.
These companies are making out like bandits, and no one seems to be on to it yet… but we have a former naval flight officer who has blown the whistle on this. Click here to see his short presentation.
It looks like people will trade just about anything for a brand-new iPhone 6, reports The Daily Dot. Some of the offers include a snake, an ugly bicycle, an ugly Louis Vuitton bag, a Tiffany & Co. wedding band (if that marriage wasn’t already over, it is now), sex (of course), a bow and arrow (just one arrow?) and some sort of 1920s vaporizer… or something. The trade offers were from the bartering section of Craigslist, according to the report.
“If the Fed is so keen on stoking inflation,” one reader queries, “why artificially suppress the number by excluding fuel and food? Why don’t they just go back to reporting inflation the old-fashioned way (i.e., how ShadowStats reports it)? That number is way over 2.2% — problem solved!”
The 5: Interesting suggestion. That would probably require an admission of error on their part, something the government is usually remiss to do. Better to full steam ahead it to oblivion than turn about midstream!
“Solar power will continue to gain ground to power homes as prices continue to come down and more homeowners make the leap,” another reader predicts, responding to our Prophecy 2015 request. “Comrade Obama will play 200-plus rounds of golf…”
The 5: Yeah, we’re not big fans of golf, either.
“Alibaba may be the nail in the coffin for the U.S. dollar’s reign as the world currency!”
One reader is perturbed that certain people aren’t behind bars. “Lois Lerner, finally? Nope. Obama crony Jon Corzine, who “lost” $1.6 billion of depositor money? No. Maybe some of the Benghazi scamsters? Wrong again, Batman. Did justice finally catch up with Fast and Furious Eric Holder, or maybe TurboTax Timmy Geithner, who as Treasury Secretary couldn’t do his taxes right. Or you could choose Rep. Charlie Rangel (D-NY), chairman of the House Ways and Means Committee, who went under investigation for tax fraud and got his wrist slapped…”
The 5: There isn’t a snowball’s chance in hell that any of these people will ever be indicted.
Regards,
Addison Wiggin
The 5 Min. Forecast
P.S. Is President Obama committing treason by arming the Islamic State — America’s No. 1 enemy?
What you’ll find inside the presentation below could disturb you and change everything you think you know about Obama.
Most people don’t know what’s going on.
But now a former naval flight officer with over 1,200 hours of fighter jet time has gone on video to spill the beans on this little-known program.
You’re never going to believe what he’s revealing.
It has to do with a little-known Obama program we’re calling “Project AR-09.”
What’s Obama up to? And why is it so important you see this story immediately?
Click here for the shocking truth.