Surprise Second-Half Gold Rally, Says Guru Economist

The man whose passion for urging investors to load up on gold bullion since the Fed tipped its monetary policy hand following the collapse of Lehman Brothers in 2008, has jumped a notch in intensity in his latest update for gold investors.

Stephen Leeb, economist and best-selling author, told King World News Washington lawmakers and Federal Reserve Board of Governors have been so reckless with their handling of U.S. budget deficits and monetary policy in response to the collapse of the global credit Ponzi scheme that he wants to move to Canada before the crisis in Europe blows up—because, after all, a repeat of the past will most likely strike again.  Sign-up for my 100% FREE Alerts

It was Europe that triggered the greatest economic depression in U.S. history—the Global Depression of 1873-96.  Then it was the U.S.’s turn to return the favor during the decade of the 1930s following the 1929 U.S. stock market crash which quickly spread to London, Paris and across the rest of continental Europe.

According to Leeb, the relatively sanguine Leading Economic Indicators (LEI) data streaming in of late is now topping.  The second half of the year will reveal what the Fed most likely already knows is coming, a catastrophe—the beginning of the next leg down in the global economy that will turn the most defiant of the reality confronting the U.S. into true believers.

Jim Rogers of Rogers Holdings and economist John Williams of, too, expect the worst of the trouble to gather steam after the election.  The Fed is expected to preempt the downturn in the LEI with more QE.

“QE3 to me seems to be a 80-20 probability right now, within the next 3-4 months, or maybe even 90-10 given that there’s an election out there,” said Leeb. “I don’t see any reason not to be in gold at this point, even from a relatively short-term basis.”

“Long term, the case is so powerful it’s . . you know . . it’s crazy,” Leeb added. “Gold, gold junior miners, you know, you’re not going to believe what it gets to in five years.  I mean this is a gift—all these prices at this point, all of them.”

Leeb goes on to say the eurozone is seriously flawed, as the Maastricht Treaty of 1992 didn’t account for the problems that may arise considering the disparate economic models between member nations.  As an example, Germany’s culture of production and stable fiscal and monetary policy starkly contrasts with Spain’s culture of collectivism leanings and zestful social lifestyle.

“The euro is not going to last . . . Spain right now has about 25 percent unemployment, Leeb explained.  “They’re being forced to be austere to satisfy the needs of the euro, and that’s just not going to fly.  It’s no going to fly.”

Unlike some economies, such as the United States of post WWII, massive debt and deficits incurred by Spain cannot be grown into, according to Leeb.  U.S. production capacity and global position relative to its competitors after the devastation of Europe during WWII allowed U.S. deficits approaching 30 percent of GDP to quickly shrink to a surplus within several short years.  In contrast to the example of Spain, its model and position on the world stage cannot achieve anywhere near similar results.  Ditto for Greece, Portugal and other European nations.

“What does Spain produce?  I’m not even sure what Spain produces . . . They’re not a country that can really grow their way out of the kind of mess that they’re in right now.  And if that’s the case, soon or later something is going to break.

“And curiously enough, Eric, that is what’s holding gold; that’s the difference between gold being $1,600 today and gold being at maybe $2,500.”

Leeb continued by telling investors that the price of gold today already reflects the expectation of another plunge in the gold price in sympathy with a collapse in the euro, similar to the drop in gold following the surprise collapse of Lehman Brothers and the immediate liquidity a sold gold position provided the global financial system during that crisis in 2008.

Is FX Concept’s John Taylor wrong about gold’s probable fall to the $1,000-$1,200 level before retracing to new highs?  And for the time frame of his prediction, Taylor said in a Bloomberg interview in the summer of 2011 that sometime in April or May (of 2012) gold would become a super bargain.

Leeb says, probably not so.

“ . . . in Europe, it’s the same kind of calculus [a Lehman-like event].  People feel that there will be a major event.  When, is the only question,” Leeb said.  “And they’re a little bit scared to get into gold with both feet until that event is out of the way.  So my advice to people is, not buy that conventional wisdom because, it doesn’t usually play out the way people think [it will play out].

“But if it does, have a little money in reserve because, any drop you see in gold based on some catastrophe in Europe is probably going to be the greatest buying opportunity of your life.  And I’m not really kidding about that.”

Leeb is so convinced of gold’s meteoric rise following a potential sharp drop in its price that he even suggested buying the precious metal using margin.  Sign-up for my 100% FREE Alerts

Source: KWN

Gerald Celente: Run, “Entire System is Collapsing”

Many have long predicted a time to run for cover would come, but the notion that the reason for selling your paper assets to move into plain ol’ cash, or better yet, physical gold and silver, would be triggered by a fear of becoming victim of fraud by the U.S. government is beyond newsworthy; it’s perverse.

The theft of Gerald Celente’s “six figures” futures account in the wake of the MF Global collapse has gone viral on the web within the financial community—and for very good reason, too.  The Trends Research Institute founder and director Gerald Celente, a big advocate of gold, told King World News it is now definitely the time to close your futures accounts.  Your money isn’t safe.  Under the smiling facade of Uncle Sam, this psychopath has gone off the rails, ‘Bernie Maddoff’ style. Sign-up for my 100% FREE Alerts

With plenty of cash in his account and the December delivery month approaching, Celente was less than 60 days from taking physical possession of two contracts worth of gold bullion when he got the news of the swindle.

“And I get this call that I have a margin call and I said, ‘What, are you out of your mind?” Celente told King World News.  “I have enough money to take possession.’  (A voice on the other end of the line said) ‘Well you don’t anymore, they’ve decided to put the money with a Trustee.’ They closed out a couple of my positions because I refused to send more money.”

More than two weeks later, with no resolution, no communication and no respect for a man whose only crime is that he’s not ‘connected’, Celente feels the complete impact of what he has warned of for some time now—a U.S. government gone completely rogue.

And it’s unlikely Jon Corzine will be punished for damaging innocent victims such as Celente and the reported 33,000 other account holders of MF Global.  In fact, Corzine is rumored to be the replacement for another Washington/Fed crime syndicate member, Tim Geithner, at Treasury.

Anyone following Celente knows that he has been totally aware of the criminal takeover of the United States.  Surely, the theft of his account has reignited his belief—in spades!—that some form of tyrannical cabal has seeped in through the years which reeks of tyranny.

Just as reports of Cambodians laughing at those warning of Cambodia’s Pol Pot takeover during the Khmer Rouge regime, Americans still remain divided between the ‘rational’ thinkers and the so-called ‘tin-foil hat’ crazies to whom insult has added to the psychological injury they suffer from knowing.

“What I’ve been warning everybody about, and I’ve been playing it safe, I had a contract to take delivery (of gold),” Celente, the 33-year veteran of the futures markets explained.  “You can’t trust anybody and the entire system is collapsing.  What’s the takeaway from this?  It’s to make sure you have every penny in your pocket.”

What the people of Chile, Russia, Germany, China, Cambodia, along with a long list of other nations touched by tyranny has no doubt come to the U.S.—high tech style, and we’ve only just begun, too.  Celente’s case may be looked back at as a time of the good ol’ days.

Oh, it could never happen in the US, many say.  But imagine if we could pit the wits of a typical circa 1935 German against a typical American of today, we may be able to reassess this ‘tin-foil-hat’ proposition offered here in a better and fuller context, keeping in mind, too, that denial is a very strong defense mechanism of the human psyche—giving yet another retread to the famous line, “You can’t handle the truth.”

It’s become increasing clear to anyone who cares to investigate the events leading up to the radical change of the political and social psyche of the U.S. at the point of the 9/11 attacks that the U.S. has noticeably degenerated into a society dominated by a tiny political-banking class of psychopaths.

Celente is the latest high-profile example of when push comes to shove, that is, Americans no longer really have rights if you wander too close to the syndicate.  And it’s not particularly necessary to make a formal announcement, with Army issued uniforms worn by men sporting funny mustaches.  That would be too in-your-face for a population that stores more guns than there are citizens.

How can a rational person deny when pressed for the explanations for the sudden myriad of strange happenings in Washington, the Fed, and the bankers, who loot to finance the takeover?  Would anyone go through what Celente and the other account holders of MF Global have gone through, say, 20 years ago?  Would Lloyd Blankfein, Jamie Dimon, Robert Rubin, Alan Greenspan, George Bush, Dick Cheney and a raft of other syndicate criminals not stand trail or at least be indicted in year 1985?

Can you imagine Obama taking the stand during another Iran-Contra investigation, which, today, is mere child’s play compared with the criminal activity by the U.S. government today?  Nixon resigned for lying?  Can you believe it?

“I heard this guy, this Terrance Duffy and I went back and looked him up,” Celente continued.  “He was saying, ‘In the history of the CME, going back to the days of the Depression, nobody ever lost a penny.’ Well I have and so have a lot of other people.  And he also said, ‘We are the guarantors.’ Well where are you now bigmouth Duffy? ….

“Where’s my money now Terry Boy?  How about guaranteeing me my money?  How come nobody is putting these people on perp walks?  You have to be a fool to have your money in there now.  I’ll never do it again.  This whole thing is a cooked game, Eric.”

A great read on the subject of today’s insane American, which explains a lot of what has taken place since 9/11, can be found in the book, ‘Political Ponerology’, a science on the nature of evil adjusted for political purposes—Andrew M. Lobaczewski.

Lobaczewski performs a brilliant job explaining the process of political tyranny, how and why it happens, as well as the lasting damage it creates at the individual level of society.  Have you ever wondered why approximately 10 percent of Americans are prescribed psychotropic ‘medications’?  Lobaczewski explains so much of today’s bizarre reality.  It appears that over time psychopaths rise to the top of power, make friends with other psychopaths and move on from there.

I really don’t think a psychopath such as Lloyd Blankfein understood how revealing his line to Congress earlier this year was, when he said, “I’m doing God’s work.”

In his book, Political Ponerology, on page 98, Lobaczewski writes:

One of the most disturbing things about psychopaths that normal people must deal with is the fact that they very early learn how their personalities can have traumatizing effects on the personalities of those normal people, and how to take advantage of this root of terror for purposes of reaching their goals. This dichotomy of worlds is permanent and does not disappear even if they succeed in realizing their youthful dream of gaining power over the society of normal people.  This strongly suggests that the separation is biologically conditioned.

In the psychopath, a dream emerges like some Utopia of a “happy” world and a social system which does not reject them or force them to submit to laws and customs whose meaning is incomprehensible to them. They dream of a world in which their simple and radical way of experiencing and perceiving reality would dominate, where they would, of course, be assured safety and prosperity.

In this Utopian dream, they imagine that those “others”, different, but also more technically skillful than they are, should be put to work to achieve this goal for the psychopaths and others of their kin.

“We”, they say, “after all, will create a new government, one of justice.”

They are prepared to fight and to suffer for the sake of such a brave new world, and also, of course, to inflict suffering upon others. Such a vision justifies killing people, whose suffering does not move them to compassion because “they” are not quite con-specific. They do not realize that they will consequently meet with opposition which can last for generations.

Subordinating a normal person to psychologically abnormal individuals has severe and deforming effects on his or her personality: it engenders trauma and neurosis. This is accomplished in a manner which generally evades conscious controls. Such a situation deprives the person of his natural rights: to practice his own mental hygiene, develop a sufficiently autonomous personality, and utilize his common sense.

Hasn’t Alex Jones warns us of this each day?  Former Assistant Secretary of the Treasury, Paul Craig Roberts, has warned us.  Jim Rogers surely knows about it. Could it be one of the real reasons why he moved to Singapore?  He’s a 69-year-old commodities trader.

Marc Faber chuckles as he waits for the inevitable US collapse and the deployment of the TSA and FEMA stooges.

Peter Schiff must know about all of this.  His father, Irwin Schiff, the famous IRS protestor must have had a strong influence on Peter—and rightful so.

#OWS marches know the score, though 57 percent of Americans don’t see it yet, according to a recent CBS poll.  They will.

It’s time for Americans do whatever they can to fight these psychopaths.  It could be as small as the simple spreading of the word—not matter what is said about you.  You’re planting a seed.

Others have the capacity to do more, and they will.  If you haven’t been touched by tyranny as Gerald Celente has just been touched, you will, then you’ll really know that it’s time to put these psychopaths in cages for the sake of their protection and of ours.

London Gold Market Report: Dismal Jobs Data good for Gold

An unexpected bad print in Friday’s Labor Department’s non-farm payroll report for May is gold bullish, according to premiere bullion storage service BullionVault.

After successive months of hobbling, yet hopeful, job creation in the U.S. (though many economist doubted the overall quality of the new jobs added from the depths of the initial shock to the U.S. economy), the Labor Department laid an egg for May when it was revealed that only 54,000 jobs were created, far less than the mean estimate range of 150,000 to 190,000 by analysts.

Those investors, believing that the Fed may pull off a slow recovery, could be rethinking that premise and instead begin fretting about the possibility of a double-dip recession, while others—who never believed that the U.S. economy ever emerged from recession in the first place—may fear an all out 1930s-style depression and food and energy price inflation to make matters worse.

But for gold and gold stocks investors, the latest data are good news, according to Swiss precious metals firm MKS.

“Speculations of a generous third quantitative easing (QE3) package will grow” if a string of subsequent depressed data come in, MKS told BullionVault. “Expectations in the market suggest that gold prices will benefit in the short term by the belief that slowing growth in the U.S. will prompt the Federal Reserve to maintain favorable monetary conditions.”

That means some form of QE3 by the Fed could be inevitable by as early as the third quarter some economists speculate, which will result in a further expansion of the U.S. monetary base and put a strong bid under the yellow metal.

“This is gold-friendly data,” said Credit Agricole analyst Robin Bhar. “In the worst case scenario, we could have a double-dip in the U.S. economy and possibly deflation, which would also help gold.”

The showdown in Greece over its failure to achieve budget metrics attracted safe haven buying of the metal throughout the past two to three weeks, taking the Euro from the high of 1.49 in May to approximately 1.41 against the dollar as well as providing ammunition for firming gold prices above $1,520.

Following the Labor Department’s disappointing jobs number on Friday, however, the euro soared against the dollar to a one-month high of $1.46, or a 2.3% again, before retracing some of the day’s earlier gains.

“The turning point was Greece, and we can suggest Greece is out of the way for the short term,” said Kurt Magnus, executive director of currency sales at Nomura Holdings, referring to reports that the European Union (EU) and the International Monetary Fund (IMF) have agreed to extend the next installment of last year’s €110 billion bailout to Greece.

Now the focus among traders has shifted to the dollar and its lingering problems accentuated by Friday’s dismal economic data and the partisan stalemate in Washington regarding the U.S. federal budget deficit and debt ceiling.

At 11:40 a.m. in New York, gold trades at $1,552.03, up $10.43.