We all knew the world was ending...

... and then the Fed and the PPT stepped in and made it all okay again.

Bear Stearns, an 80-year investment banking veteran who saw the crash of 1929 and the Great Depression come and go, who weathered the stormy seas of stagflation during the 1970s and the brutal recession under Volcker and Reagan, disintegrates before our eyes, right into the open pockets of JP Morgan Chase - courtesy of the Federal Reserve (which JPM co-owns).

Rapid-fire, successively growing Fed bailouts and phony liquidity injections that resulted in the Fed either loaning out cash (as in its TAF action, which increases the money supply) or US treasuries (as in the TSLF, which don't) made the Fed encumber a full one-third of its total balance sheet. All of this was capped by a dead-of-the-night, surprise decision to combine the Bear-JPM deal with an emergency cut of the discount rate, only two days before an unprecedented 75 basis point funds rate cut (which many decried as "too little, too late").

The PPT, a/k/a the "President's Working Group on Financial Markets" brought the Dow-Zombie back from the dead yet once more, and then several more times that same day during "The Monday After". On Tuesday, the PPT proceeds to quickly intervene when the whopping the Fed rate cut announcement, all by itself, doesn't produce the desired result and gold rises, cutting prior losses, while the Dow gives up its earlier gains. All of this is suddenly turning around for no apparent reason, within minutes, resulting in a uhuge, near 400 point, gain on the Dow.

Why are investors so scared?

The are afraid because they keep bumping into things they cannot see while enjoying what they believe is a walk in a lush beautiful, bountiful garden.

Investors see this:

While, in reality, the world in which they somnambulate, looks very much like this:

In the PPT's whacky world of virtual reality, all of the informational queues that normally allow investors to make informed decisions are removed - to prevent a widespread panic. It's only for their own good, of course.

You see, father state - and those who finance it - are very concerned about your emotional well-being. You cannot be allowed to see your economic reality as it is, because that might make you not like it and, God forbid, might make you even want to do something about it - like, oh, maybe turn around and walk the other way?

That is not permissible. It is unacceptable because the rocky path along the abyss is all father state is able and willing to give you. Turning around and walking right out of the narrowing canyon would e the prudent thing to do - but it's not the direction that is predestined for you.

In order to keep you on your doomed path, the signpost of rising gold prices must be repeatedly chopped down to make you think the path is alright for you.

So, you keep walking, trusting the beautiful vision of rhododendron (or whatever it is that shades your brow from the sun's harsh light of day) in this make-believe garden, blissfully ambling along.

As you walk, you are constantly bumping up against the jagged rocks protruding from the towering canyon wall to your left; it is the cold, hard reality of rapidly rising gold prices that impedes your walk down this treacherous path - but you chalk it all up to "fluctuations" and continue, un-alarmed, unconcerned.

"You see?" you mumble to yourself, "Gold fell on Monday from its hysterical $1,033 price peak reached in Asia overnight, right back to $1,000, where it was before. On Tuesday, it fell quite a lot, all the way to $977, and the Dow rocketed up by 400 points, and today, gold is down another $30! These times can't be as dangerous as some people always claim."

"Of course, my trusting friend," replies the PPT, "Certainly. You are so right! Thank you for selling your gold at the bottom of this engineered downturn. Just keep on walking, just a little further up this lush garden path - all the way around that bend where the butcher's trough is waiting."

To you, the trough will seem like a quaint wooden bench, nestled under shady trees, basking in the late afternoon sun. Have a seat, my dear friend. Take a rest. Smell the roses. Gold is at an all-time peak and will soon decline. All is as it should be. Soon, very soon, all your sorrows, all your travails, will be no more...."

Farewell, ... my good friend ...!

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