This summer doldrums action has been nothing short of electric for gold and the general markets.... but calls that the end game is in progress is premature. There will be one more hall pass granted by the powers that be that will be unimaginable to the American public in both scope and dollar amount.

Forget for a moment the deficit and Washington theatre of the absurd where politicians cannot even agree to raise one single dime of revenue or cut any programs when the reality is that all social programs will be gone in five years time including Social Security, Medicare and Medicaid. You will get a check, but the paper it is written on will be worth more than the check amount. But that is yesterday's focus ...... now we must move on to the newest crisis du jour - European contagion.

People talk that the Germans will hold up all of Europe - but they do not have enough skin in the game to be willing to do that. The USA does .... because in the end, we filled all the balance sheets of the Banks of Europe with "structured" financial products (think fraud) like Credit Default Swaps that have no backing or Mortgage Backed securities backed by a totally melted down US real estate market. We used derivatives by the hundreds of trillions in larger and larger quantities to manage (think fix) prices, currencies and commodities. So we will crater unimaginably if we do not keep the game going with more and more money and deeper and deeper debt. So as the lender of last resort we will print. We will print a lot.

Already the American public cannot fathom the trillions it owes though TARP, QE1 and QE2..... but the next round of bailouts that are already in progress will be simply gargantuan in size. We intend to bailout all of Europe through a black hole vehicle like the IMF (International Monetary Fund) and stick this bill along with the others to the American taxpayer. Although this money is already at a level that it can never be paid back, this is preferable to a complete chaotic collapse. This will be done like the recent Bank of America "sale" of toxic assets to a blank hole entity like Fannie Mae for 500 million (just a drop in the bucket). Fannie Mae/Freddie losses are an unknown at this time, but are estimated at - at least 2 Trillion. So look for covert bailouts to black hole entities where the money printed will never be quantified. You will only know that America owes "a lot".

These covert bailouts will buy more time but we will be up against the wall again and then will have dug a much deeper hole to climb out of. Print or die is where we are and these are the only choices now. There is more time to buy and we intend to buy all we can with the money we don't have because as the reserve currency of the world we can simply print it.