If This is Recovery, Where Are the Taxes?- Total Intervention Thursday By the US and ?????

Today is a fantastic buying opportunity for those who thought that they missed the Gold and Silver Boat.  Today's action is the Cartel along with some other entites that really are hoping for a strong dollar, believing that they can make big changes through intervention.  Guess what,  the cat is out of the bag and this type of intervention is going to backfire because a new breed of longs have abandoned their black boxes, margin and the trading mentality and started following fundementals.   Last Friday the MOPE (managment of perceptual economics) tactic used to bomb gold and prop up the dollar was the ridiculous non farm pay rolls employment number.   Today its that the problem with debt and possible sovereign debt failure in Greece and the Fed's outlook that the US economy is recovering. 

First of all the Fed's outlook on the economy:

November tax receipts just don't support that theisis in my opinion:

November tax data:

Income Taxes Withheld -10.98% y/y
Individual Tax Receipts -20.36% y/y
Definitely no signs of improvement.

As for the action in the dollar and gold today, I'll on an excerpt from yesterday's Midas Letters:

"…UNLESS YOU KNOW ABOUT THE PRICE SUPPRESSION SCHEME AND HOW MUCH CENTRAL BANK GOLD THE GOLD CARTEL WENT THOUGH IN ORDER TO MANIPULATE THE PRICE, YOU WILL ALWAYS BE CLUELESS ABOUT WHAT GOLD IS DOING AND WHY. UNLESS YOU KNOW ABOUT WHAT CAUSED THE MASSIVE SHORT POSITIONS IN GOLD, THEN YOU CANNOT EVER GET IT RIGHT AS TO WHAT THE GOLD PRICE WILL DO IN THE MONTHS AND YEARS AHEAD!!!"

Finally, I believe the Chinese really want into gold at a better price and for that reason, the US and China's short term goals are alligned.  However, I think if the Chinese actually understool the GATA story, they would know that Gold would be a great deal even at $2,500 an ounce and that its probably going well above $5,000 and to be tinkering with the market at these levels along with anti-gold pirates is not a good long term strategy.  You can pump the dollar up for a few weeks, even a few months, but what is happening in Greece is a microcosm of a much bigger currency avalanche building in the US dollar.

Rick Ackerman made a great post on the subject of the last paragraph recently:

Are U.S. and China Together on Gold?

"…With Time magazine’s momentous selection of Ben Bernanke as Person of the Year, there were reports of people dancing in the streets in, um, Oslo.  Leave it to Time to figure out a way to make Henry Luce roll in his grave while the magazine tries to outdo rival  Newsweek in the race to claim publishing’s trophy for irrelevance.  While the understandably isolated delirium over Bernanke’s selection subsides, we thought we’d update the prospectus on gold with a contribution from a Rick’s Picks subscriber who has requested anonymity.  His thoughts run counter to the popular notion that investors can count on steady buying from China to lend buoyancy to bullion quotes. As the writer makes clear, China may have a mind of its own, and it will not always be perfectly aligned with the thinking of gold bulls.  Here we go:

 While many precious metals bulls have been insisting for months that China is gold and silver’s greatest ally, we saw first-hand last week exactly how capable the Chinese are of pulling a rabbit out of a hat when need be. Much of the finger wagging for the recent decline in the price of gold – as usual – has been directed towards those dastardly Americans. This time

 around, the gold bull’s disdain had to do with the recent US jobs report on December 4. Yes, the numbers – which are unquestionably fabricated – had an impact on the precious metal markets; nevertheless, those gold bulls who insist upon using the adage of “see no evil, hear no evil, speak no evil,” where China is concerned are fooling themselves and living in a sugar-coated dream world. 

A full two days ahead of the jobs report, Chinese officials called gold’s recent surge a “speculative frenzy.” Yet, it is the jobs data that bears the brunt of the blame for gold’s pullback. China had nothing whatsoever to do with this? Since when did they become our friend?  Furthermore, how do we know the U.S. and China didn’t act in unison here? A little of the “I’ll-scratch-your back, you-scratch-mine,” thing between old friends.

Damned Lies, and Statistics

Phony jobs report or not, who in their right mind believes statistics coming out of the U.S. to begin with? Perhaps those who frequent tractor pulls and WWE wrestling events are so naive. Maybe even Middle America.  But then, they’re not typically the ones buying gold, are they? 

Big government is big government, and while China and the U.S. clearly have their differences, they also have a responsibility to co-exist and cooperate wherever possible, even though what we read in the papers and see on television often appears to dispute that. Why would anyone think China is any less qualified than the U.S. for pulling off a performance in price suppression where gold is concerned?  Now that is naïveté."

Big intervention days are great days to buy physical gold.  My rule is never use margin and only buy on big pull backs.  Both conditions are active today.

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