Submitted by SD Contributor FW:

Frequently, silver worrywarts claim the cartel can ultimately control the price of silver, and that no advance will come beyond levels the cartel deems appropriate.  This logic fails in the face of the 12 year old bull market.  More to the point, the argument fails to factor the importance the powers that be assign to keeping the rigged game going.  Sure, the cartel cheats.  It’s like they play poker with 15 extra decks of cards under the table, able to pull needed cards at will just as easily as manufacturing naked short sales.  But they sure as heck don’t want to flip the entire poker table over and end the game forever.  It’s critical that you understand this analogy.  On an incremental basis, as the cartel’s manufacture of naked shorting becomes increasingly brazen and ever more separated from the realities of the true physical market, they run the risk of flipping over the poker table.  They lose all power to control paper prices when the game is seen by all as over — when the poker table is flipped over. [Read more...]

Submitted by SD Contributor FW:

Some have compared the current path the US is headed down with the Soviet Bloc experience.  However, there are some differences. 

In the US, we’ve seen a multi-decade long process of gutting the middle class and propagandizing people to the point of turning much of the nation into a zombified state.  However, there are at least 20 million Ron Paul supporters in the US, and while not every person down to the man in that movement are entirely aware of what’s going on, compare those numbers to resistance pockets and periods of any resistance under Soviet rule you care to examine.

I contend there’s a deeper reservoir of latent resistance in the US.  It’s mostly dormant at the moment, because an insufficient number of people have yet to experience economic hardship and the destruction of the so-called “American Dream” for a long enough period of time to engender rapid social mobilization.
But that’s coming, and the powers that be damn well know it!

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No cartel raid materialized in gold and silver on the COMEX open this morning prior to today’s FOMC statement, but be prepared for the 10-10:30am EST span, as IF the Fed has plans to officially announce QE3 today, we can expect gold and silver to be pounded this morning, as occurred when QE2 was announced.

The Fed has backed itself into a corned with it’s own MOPE- anything other than official QE3 today or a specific plan detailing the amount of easing the Fed is willing to provide will result in a massive disappointment to the market.

SD contributor FW said it best last night in response to The QE Control Room open thread:

Submitted by SD Contributor FW:

When silver outperforms gold, it’s an indication that both metals will perform strongly because the “inflation trade” has returned and given “modern” perceptions of the global monetary system, “professional” traders and investors have an easier time understanding and believing in the notion that the PM sector performs well during periods of inflation, and less so during periods of deflation, regardless of the historical record;

Keep an eye on the long end of the US bond yield curve as we may have very well seen the ultimate top of the 30+ year old bond market bull run. [Read more...]