Deep State at Home and Abroad: Mike Lofgren and David Talbot

"Behind the ostensible Government sits enthroned an invisible Government, owing no allegiance and acknowledging no responsibility to the people. To destroy this invisible Government, to dissolve the unholy alliance between corrupt business and corrupt politics, is the first task of the statesmanship of the day."

Theodore Roosevelt, The Progressive Platform


"As societies grow decadent, the language grows decadent, too. Words are used to disguise, not to illuminate, action: you liberate a city by destroying it. Words are to confuse, so that at election time people will solemnly vote against their own interests...

Any individual who is able to raise enough money to be considered presidential is not going to be much use to the people at large. He will represent whatever moneyed entities are paying for him. Hence, the sense of despair throughout the land as incomes fall, businesses fail and there is no redress."

Gore Vidal, The Decline and Fall of the American Empire, 1992


"Last year, pressed by progressive donors at a dinner party to act more like the progressive they thought he was, Obama responded sharply, 'Don’t you remember what happened to Dr. King?'”

Ray McGovern, Doubting Obama's Resolve To Do Right


"The TPP, along with the WTO and NAFTA, is the most brazen corporate power grab in American history. It allows corporations to bypass our three branches of government to impose enforceable sanctions by secret tribunals.

These tribunals can declare our labor, consumer and environmental protections unlawful, non-tariff barriers subject to fines for noncompliance. The TPP establishes a transnational, autocratic system of enforceable governance in defiance of our domestic laws."

Ralph Nader


"Citizens in many countries wonder how certain government policies can persist in spite of widespread popular opposition or clear perceptions that they are harmful. This persistence is frequently attributed to a 'deep state.'

'The Establishment,' as it’s been called in the United States, where it evolved from the Washington-New York axis of national security officials and financial services executives. They are said to know what is 'best' for the country and to act accordingly, no matter who sits in the White House."

Philip Giraldi, America's Establishment Has Embraced 'Deep States'

Gold Daily and Silver Weekly Charts - Incompetence, Coverup, and Felony

"It is difficult to get a man to understand something when his job depends on not understanding it."

Upton Sinclair


"The problems we face did not come down from the heavens. They are made, they are made by bad human decisions, and good human decisions can change them."

Bernie Sanders


"Throughout my long service life in the Department of Defense, first as an army officer and then as a member of the Defense Intelligence Senior Executive Service, there was a phrase in common usage: 'I will fall on my sword over that.' It meant that the speaker had reached a point of internal commitment with regard to something that his superiors wanted him to do and that he intended to refuse even though this would be career suicide. The speaker preferred career death to the loss of personal honor.

This phrase is no longer widely in use. What has taken its place is far more sinister in its meaning and implications. 'I drank the Kool-Aid' is what is now said. It signifies that the person in question has given up personal integrity and has succumbed to the prevailing group-think that typifies policymaking today. This person has become 'part of the problem, not part of the solution.'"

W. Patrick Lang, Drinking the Kool Aid, 2004

Gold had a little bounce today. Silver, not so much.

There is intraday commentary on why I think this is happening now as it is. It its titled An Almost Perfect Storm of Incompetence and Felony.

Incompetence is probably much too kind an interpretation.

There are now 666.11 tonnes of gold in the GLD ETF.

The decisions that these public servants are making are not so often out of well intentioned ignorance and ideological blindness, as a former Fed Chairman seems to suggest.  That is what I call the CEO-defense.  Rather they are made as a price of power and privilege, and selfish betrayal of trust.

See who is getting the sinecures in the financial sector, and the enormous fees for speeches after their 'public service,' all out of proportion to their real value.  And then you may understand why there is no reform, and no sustainable recovery.

And this is why the great mass of voters are feeling 'restless' with things as they are.   And the people of privilege do not know what to make of their growing discontent.

Have a pleasant evening.


P.S.  Gold is moving from West to East.  And there will be consequences, as there always are, not so much with the original misdeeds, but the ongoing coverup.

SP 500 and NDX Futures Daily Charts - Retracement, For Now

US stocks were rolling over today, in recognition that the asset bubble rally which we had just experienced was over, at least for now.

Right now we are in a very overdue retracement.  The depth of the decline will give us some information on the chart about a potential move higher into year end.

Fundamentals rare matter in the short term, and with the reckless monetary policy of the Fed and the fiscal malfeasance in Washington, the fundamentals are a barely heard voice of conscience.

We stand two bubbles in, and on the verge of another, at least according to the IMF, and you know that I have had that forecast for some time now.

There is no reason why we cannot have a fourth or fifth bubble and crisis as well.   They are serving a purpose.  If you do not know what that is, then you have not been paying attention to the growing chasm in economic and political equality between the elite and the rest in the 'free world.'

Have a pleasant evening.

An Almost Perfect Storm of Incompetence and Felony

"People of privilege will always risk their complete destruction rather than surrender any material part of their advantage. Intellectual myopia, often called stupidity, is no doubt a reason.

But the privileged also feel that their privileges, however egregious they may seem to others, are a solemn, basic, God-given right."

John Kenneth Galbraith, Age of Uncertainty


“Misdeeds, once exposed, have no refuge but in audacity. And they have accomplices in those who are fearful in their complicity.”

Tacitus, Annals

I was discussing the markets this morning with my friends Dave and Bill Murphy as we generally do.  This is what I just wrote back in response to a question from Bill.

We just saw a very historically significant decline in the precious metals in terms of days lower without relief. And we have seen a remarkable rise in the US dollar index against the Euro and the Swiss franc that cannot possibly be good for the real economy of the US, when every other developed nation is trying to devalue their currencies to stimulate their exports and inhibit imports.

I believe that a portion of the gold selling in particular is an effort to knock down the open interest in gold for December. If there was any serious attempt for holders of those contracts to stand for delivery, even JPM, which has been obviously building up its stores of gold to act as the 'fixer' in that market, would not be able to cover the demand.

JPM was consistently taking delivery for their house account in gold, and just transferred 70,000+ ounces over from Nova Scotia's warehouse, from whom they had been taking delivery.

As we know, in the last big delivery month, JPM stepped up with an enormous amount of their gold, 400,000+ ounces, to provide enough real bullion to satisfy the contracts standing for delivery. Even now their inventories remain somewhat depleted.

The dollar has also been soaring, because the Fed is trying to pretend that the US is recovering so that they can raise rates.  A strong dollar and higher rates are very harmful to what is almost undoubtedly a fragile economic recovery in the US.

And it is fantasy to think that the US can somehow go it alone, and continue to improve while the rest of the world is cutting rates because their economies are slowing.

The Fed wants to raise rates for their own policy purposes, so they can cut them, without going overtly negative, when their latest financial bubble starts to collapse, which it may already be doing. They cannot really raise rates in a Presidential election year past June, so they will push ahead, to serve their own purposes, even as they harm the real economy.

There will be another financial crisis as the IMF warned today. There will be a serious dislocation in several financial markets, including the precious metals and the bonds at some point, that will rock the current system to its foundations.

It is the credibility trap which ensnares the ruling class that inhibits any meaningful remedy and reform.

It is an almost perfect storm of incompetence and felony.