Surveying the landscape, here’s an overview of what I’m seeing:

Decoupling Fact from Fictional Futures

In Bill Murphy’s daily commentary at LeMetropolecafe.com, Friday September 12, Murphy reported this account from one of his subscribers who happens to be in the metals recovery business:

“I have to admit Bill I have seen a lot in my time but if this information I am about to provide you doesn't prove once and for all that these markets are being totally manipulated and distorted. Then there will be nothing left to prove anymore about anything.

I have been recycling for over 10 years now and I have been focused in developing a service in the silver recovery business.

So far it's been very successful and I had been preparing an order for recovery just before they hit the silver market.

I was sitting on 29 skids @ 28,000 lbs
of fiche which equates to aprox. 385 lbs
of pure silver considering my assay on
this grade of fiche was very high.
1.4 grams per 1000 grams of micro fiche.
It's around 4 dollars per lb or 6000 ounces
of silver.

Now, I won't mention names but I was unable to setup a bullion account with this company because they don't setup accounts anymore so I can't hedge the market.

The day you deliver. You get paid spot on the Comex.

So I simply parked my product and waited. Now talk about a squeeze play. Would you believe that this company called me today [Friday] @ 10.50 silver and quoted me 16.00 per ounce with room to negotiate??? “

This account perfectly illustrates what we are witnessing, first hand; as physical stocks become more and more scarce – the Cartel is “beating the COMEX price with a stick” – making would-be-buyers think twice before putting their money down [or order in] for the real thing. 

This cripples all resource companies since they ALL contract to have their off-take benchmarked against fraudulently derived paper futures prices.

This is why we currently give preference to ownership of physical metal versus mining shares.

This also provides a great backdrop for talking heads to say “commodities are toast” – lessening demand for physical or forcing liquidation through [cough] the etfs – GLD and SLV.  I distrust the etfs on the basis that their alleged stocks of physical are all under the custody and direct control of institutions [the Cartel] long suspected / accused of price management of the same.

In the end, however, smart money the world over – has now cotton on to this charade.  I speak quite regularly with folks around the world – there simply is NO PHYSICAL SILVER to be had – virtually anywhere.

I would like to share with you all an interaction I had with GATA’s Bill Murphy approximately 3 years ago:  I remember Murphy explaining to me,

“if GATA is correct, physical metal was the Achilles Heel of the Cartel.  Regarding shortages – if the GATA thesis is correct - they should categorically appear first in silver, then gold.”

So, despite the blatant pummeling of the paper commodities complex [futures], artificially lowering prices in the face of shortages WILL NOT RESOLVE CURRENT PROBLEMS, and in fact, will intensify them.

So, while these are trying times in the commodities space – they should surprise no-one.

The painful declines we are experiencing have been “linear”.  The advances, I would suggest, are going to be GEOMETRIC.

When this reality sinks in universally, it will not only discredit the COMEX but all futures markets will be seen for what they are – frauds – and highly inappropriate as honest price discovery mechanisms.

The futures markets are, collectively, the basis or underpinning of the 1.25 quadrillion Derivatives Complex.

It has been the unrelenting price management of strategic commodities and distortion / falsification of economic reporting which would expose the rigging that has brought on the plethora of economic horrors which have led to the COMPLETE SYSTEMIC FINANCIAL MELTDOWN we are now just beginning to experience.

Bank of America Doing Deals That Don’t Pass the Smell Test

I’m extremely dubious of B of A’s involvement with ML, not to mention Country Wide, given their dubious involvement in such scams as BCCI [Bank of Crooks and Criminals]:

http://www.copi.com/defrauding_america/chp_23.htm

COVERUP OF THE BANK OF CROOKS AND CRIMINALS
Millions of people throughout the world lost billions of dollars, made possible by the coverup actions of people in foreign countries and in the United States. These losses would not have occurred had officials and attorneys in the United States not engaged in the crimes of coverup misprision of felonies, obstruction of justice, and had they not aided and abetted the criminal activities. Congressional committees, Justice Department personnel, the FBI, and the CIA, all knew about the corrupt operation for years.

SOURCE OF STARTUP FUNDING
BCCI commenced operations in Pakistan in 1972, with much of its funding provided by Bank of America and the CIA.(372) Bank of America claims that it sold its BCCI interest in the early 1980s, but records show that Bank of America continued to control much of BCCI's operation until shortly before BCCI was shut down. In the early 1970s CIA operative Gunther Russbacher transferred sizeable amounts of CIA funds into the bank for the start-up operations.

MADE TO ORDER FOR CIA ACTIVITIES
The CIA knew about BCCI's activities, finding this mindset suitable to its own operations. If, for argument, the CIA was not in partners with the BCCI activities, its world-wide network of operatives and assets should have discovered the BCCI activities that brought about the world's worst banking loss. BCCI was custom-made for the covert and corrupt activities of the CIA, the Mossad, drug dealers, and terrorists. My CIA contacts, including Russbacher, described how CIA operatives used the bank to launder money from CIA enterprises, including drug trafficking proceeds, money from its various financial activities within the United States, including its looting of savings and loans, to fund unlawful arms shipments, finance terrorist operations,(373) undermine foreign governments, and other covert activities.

Three years before the BCCI scandal broke, Robert Gates, Deputy Director of Intelligence Operations at the CIA, stated to another CIA official that BCCI stood for the Bank of Crooks and Criminals!

Both the Country Wide deal and the ML deal seem like “fronts” with B of A catching falling daggers in both instances paying huge premiums for major players on their way to bankruptcy in markets that are getting crushed!! 

These deals have that familiar squalid Enron-esque stench emanating from them.

I would suggest that all they’ve really done is to buy a little more time – days perhaps?

B of A CEO, Ken Lewis, Openly Contradicts “Pinocchio” Paulson

Interesting thing I noticed today, when B of A CEO - Ken Lewis – appeared at a televised press conference with ML CEO – John Thain:  Lewis emphatically stated that regulators had not coerced or “arranged” their shot-gun-marriage.  Lewis stated that the deal was done of his and Thain’s own volition. 

Fast forward a couple of hours and Pinocchio Paulson is stating how pleased he is that Fed and SEC managed to bring major market players together over the weekend.

These clowns are contradicting themselves.

Good grief, they can’t even sleaze properly.

Prepare For Energy Shortages

All the talk that Ike had not affect the energy complex in the Gulf seem to be pre-mature and no doubt played-up as cover for the “fire bombing” of the energy futures.

http://uk.reuters.com/article/governmentFilingsNews/idUKN1542617320080915

Henry Hub operator says force majeure remains

NEW YORK, Sept 15 (Reuters) - The operator of the Henry Hub, the benchmark trading point for New York Mercantile Exchange gas futures, said Monday it was assessing the status of the Hub and facilities on its mainline natural gas system, but force majeure declared over the weekend remained in effect until further notice.

In addition, Sabine Pipe Line LLC said in a website posting initial reports indicated flooding from Hurricane Ike had impacted the current operability of its system.

Sabine is the owner / operator of Henry Hub.  The Henry Hub offers shippers access to pipelines that have markets in the Midwest, Northeast, Southeast and Gulf Coast regions of the United States. The Henry Hub interconnects with nine interstate and four intrastate pipelines including the following: Acadian, Columbia Gulf, Gulf South Pipeline, Bridgeline, NGPL, Sea Robin, Southern, Texas Gas, Transco, Trunkline, Jefferson Island, and Sabine's mainline. Sabine's two compressor stations at the Hub provide the operational flexibility to compress 520,000 Dt/d and make any necessary deliveries to high-pressure pipelines. Sabine currently possesses the ability to transport 1.8 Bcf/d across the Henry Hub.

The likelihood of spot energy shortages [refined product and Nat. Gas] are growing by the day.

The Dollar Rally Sham

Dr. Jim Willie recently reported that U.S. Dollar denominated bonds are likely being “called in”:

“In all likelihood the Bank For International Settlements in Basel Switzerland ordered the United States to call in USTreasurys and USAgencys, the bond instruments, the financial weapons of mass destruction. The BIS ordered the financial leadership to call their damaged risky debt securities home, so that they can explode on US soil, so that their greatest concentration rests on US soil, so that the maximum loss occurs to US institutions, so that the risk can be kept to a practical minimum for foreign nations. The benefits given to Americans are two-fold, one a bizarre paradox, the other an open door to steal.”

I concur with Dr. Willie assessment. It stands out in my mind that this past weekend’s Wall Street restructuring involved ZERO FOREIGN PARTICIPATION.  Barclays, who had been rumored to be in the mix to save Lehman walked away from the table.  Korean money, earlier last week, did the same thing.

What is really at stake here, folks, is not simply the U.S. Dollar or U.S. banks.  It’s FIAT MONEY – period.

The BIS has a franchise to protect – CENTRAL BANKING.

As such, I look for U.S. Inc [the Federal Reserve] to become increasingly more isolated in the days ahead.

Conclusions:

If you have not done so already, buy some physical metal.  Articles already posted at Kirbyanalytics.com outline the ins-and-out of doing this.

With energy shortages becoming more and more likely, think in terms of how you will heat your home this coming fall / winter should there be interruptions to Nat. Gas supplies.

I believe in stockpiling at least a months worth of non-perishable food.

Good luck and god bless.

-- Posted Tuesday, 16 September 2008 | Digg This Article