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Monday October 20th 2014

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Manipulation, Jawboning and Prayer

All I can say is this.  Yesterday afternoon’s “Miles Franklin All-Star Silver Panel Webinar” was an unmitigated success.  Direct questions regarding silver supply, demand, mining costs, inventories, and trading with David Morgan, Harvey Organ, Steve St. Angelo, and Bill Holter enabled listeners to derive a significantly better understanding of how tight the market is – and will likely be – in the coming years.  Thus, we courage that you will listen to it on the Miles Franklin Blog – and send it to as many people as possible, the world round.

Yes, supply is tight – and likely, will be a lot more so in the coming years, based on surging investment and industrial demand and the inevitable production collapse if prices don’t rise materially – for both silver and the base metals that produce silver as by-product.  And as for demand, whilst TPTB commit “Cartel Suicide” by pushing prices well below the cost of production, it has never been stronger – worldwide.  As you can see below, not only are U.S. and Royal Canadian Mint silver sales and Indian silver imports on pace to either meet or exceed 2013’s record levels, but the U.S. Mint is on pace to deliver its third biggest sales month ever – and equally importantly, its largest non-January month, as January is typically the biggest sales month due to late year backordering of the coming year’s issuance.  And since, per what we validated on the Webinar, worldwide supplies are so tortuously thin, the odds of a physical short squeeze have never been higher – particularly given the terrifying political, economic and financial environment.

Indian Silver Demand  US Mint Silver Eagles

Speaking of said environment, how bad can it get?  On essentially any metric, qualitative or quantitative, the world is in far worse economic shape than the 2008 bottom – with, until this month, one “temporary” exception; i.e., the ability of various “PPT operatives” to support equities with unfettered money printing and market manipulation.  Given this month’s horrific market declines – of not only stocks but bond yields, commodities, and currencies – we are clearly entering an extreme “danger zone,” in which the “big one” could break out in full catastrophic form, any day.  Europe is an unmitigated disaster – with the PIIGS crisis back in full bloom; the Bank of Japan has been forced to admit relentless Nikkei stock purchases, as Abenomics has been proven to be an unmitigated failure; China’s historic construction bubble has been exposed by collapsing commodity prices; and America’s economic data is plummeting despite TPTB’s best “tape painting” efforts, ahead of next month’s midterm elections.  And of course, even the vaunted PPT is having difficulty supporting markets that appear to have not only made an “Ali Baba top,” but desperately want to plunge to the realm of “valuation reality” at far, far lower levels.

Of course, they’ll continue fighting this inevitability to the bitter end – which is why day after day, all precious metal surges are fought tooth and nail with relentless “Cartel Herald” algorithms such as yesterdays at the 8:20 AM EST COMEX open, the 12:00 PM EST “cap of last resort “and of course, this morning’s 2:15 AM EST open of the London paper “pre-market” session.

24hr Gold Charts 10-16 10-17

Then you have the Cartel’s oldest trick, the DLITG or “Don’t Let it Turn Green” algorithm utilized to keep the most widely watched paper PM proxies – the GLD and SLV ETFs – from flashing bullish signals.  Here’s a perfect example of it yesterday, replete with $0.05/oz. attack in the trading day’s final minute; and of course, the daily “dead ringer” algorithm utilized to prop the “Dow Jones Propaganda Average.”  Never forget that 10:00 AM EST not only represents the Cartel’s “key attack time #1” because it’s when global physical PM markets close, but the PPT’s “key goosing time” because it’s when the Fed executes its daily POMO or “Permanent Open Market Operations.”

Ishares Dow Graph

As for U.S. Treasuries, never in history has volatility been so high, as due to a combination of investor fear, high frequency algorithms’ destruction of market dynamics, and relentless Federal Reserve manipulation yields are literally all over the place – as I write at 8:20 AM EST, at 2.16%, en route to ZERO when the Fed initiates an Abenomics-like “QE to Infinity” program – and eventually, INFINITY when said program inevitably catalyzes hyperinflation.  And per today’s article title, the Fed is already telegraphing this with accelerated “jawboning” as the market convulsions expand; along, of course, with accelerated prayer behind the Eccles Building’s closed doors.  Investors’ calls for QE4 are already growing louder – ironically, just two weeks before the Fed is scheduled to end QE3 – to the point that laughably, the MSM is citing Whirlybird Janet’s speech this morning at the “Conference on Inequality of Economic Opportunity” as a potentially “bullish catalyst.”

CNBC Headline Markets

Consequently, Fed governors have been giving hawkish speeches en masse – including, in the last week alone, St. Louis Fed President James Bullard, San Francisco Fed President John Williams, Atlanta Fed President James Lockhardt, Chicago Fed President Charles Evans, Minneapolis Fed President Narayana Kocherlakota, and even Federal Reserve Vice Chairman Stanley Fischer.  And don’t forget, Evans, Lockhardt, and Williams will be joining the FOMC’s voting committee in 2015, whilst “token hawks” like Charles Plosser and Richard Fisher, Presidents of the Philadelphia and Dallas Federal Reserve banks, respectively, will be “conveniently” departing.

Reuters Headline Fed

Thus, as the “ides of October” build to a crescendo, expect nothing less than unprecedented doses of “manipulation, jawboning and prayer” – particularly as relates to the physical gold and silver markets, which likely sooner rather than later will expose the “financial world’s Achilles Heel” by exploding higher.

Miles Franklin All Star Silver Panel Webinar

Miles Franklin hosted a Webinar moderated by Media Director Andy Hoffman featuring top minds in the silver research community. Panelists included David Morgan, Harvey Organ, Steve St. Angelo, and Bill Holter of Miles Franklin.  They discussed supply/demand of gold and silver, mining production, oil prices, trading, and the bullion industry.  To listen to the interview, please click below.

Coming Apart At the Seams

Watching America’s “manipulation organizations” desperately attempt to repeal the rapidly approaching “reality tsunami,” all we can think of – with tremendous fear and consternation – is what the “other side” will look like.  With global economic activity and financial conditions far worse than the 2008 bottom – even before “the big one” commenced – we can only pray the “worst-case scenario” doesn’t occur, which even the status quo embracing MSM realizes is possible.

CNBC Headline

Of course, this time around, the global geopolitical situation is far more unstable, with America a pariah whilst the rising “Eastern bloc” recruits allies faster than ISIS.  Thus, the odds of WAR increase with each passing day, as exemplified by Russian Prime Minister Medvedev yesterday claiming a restoration of U.S.-Russian relations is “impossible,” and President Putin today making an even stronger more ominous statement in “we hope our partners realize the futility of attempts to blackmail Russia, and remember what consequences discord between major nuclear powers could bring for strategic stability.”  Throw in the expanding panic, justified or otherwise, of a potential Ebola epidemic and its clear TPTB’s best laid plans are undeniably “coming apart at the seams.”

Yes, the “best laid plans” – as exemplified by Draghi’s infamous “whatever it takes” speech” of July 2012, which simply bought the collapsing European monetary union two years, whilst exponentially worsening its economic and financial condition for the benefit of the “1%,” at the expense of all else.  Frankly, we can’t scream any louder that the Euro will be abandoned, either via secession or expulsion – and watching this morning’s carnage, our expectations have never been more validated.

National Bank of Greece

Yes, the PIIGS contagion is back with a vengeance.  With nearly all Western yields plunging toward zero, PIIGS sovereign yields are exploding higher – on average, by more than 10% in the past two days.  Yes, 10% in two days!  To wit, Greece alone has seen its benchmark 10-year yield surge from 6.7% to 8.9% – and watching the utter implosion of European equities, it doesn’t take rocket science to guess what investors are anticipating.

As for commodities, the all-out crash we warned of last month is accelerating, 2008-style with WTI oil about to breach $80/bbl., and base metals in utter freefall, such as “Dr. Copper,” which this morning sliced through $3.00 like a knife through hot butter.  Regarding the former, don’t be fooled by pathetic propaganda such as CNBC’s outright lies this morning in stating that Saudi Arabia could afford to cut prices because its cost of production is so low.  As we wrote in yesterday’s Crashing Oil Prices Portend Unspeakable Horrors,” the heavily socialist OPEC nations have massive spending budgets – in Saudi Arabia’s case, breaking even at nearly $100/bbl.; and for Iran, nearly $140/bbl.  And yes, CNBC, the “average breakeven cost” of U.S. energy producers may be roughly $75/bbl., but the marginal cost of production is dramatically higher – as nearly all incremental production emanates from rapidly depleting, heavily leveraged shale oil projects.  Then you have Brazil with nearly all incremental production from ultra-expensive, ultra-deep-water projects (which I know a thing or two about, having been an oil service and drilling analyst for ten years).  Brazil was in recession before this month’s oil price collapse; so if you want to know how they’re being impacted, take a gander at the collapsing Brazilian Real.

And then there’s the United States of “Recovery,” where Obama’s approval rating tumbled yesterday to an all-time low.  Back in June, when MSM and Wall Street optimism was at its highest, and the “Dow Jones Propaganda Average” at its all-time high (excluding inflation and survivor bias, of course), we wrote that “Need Or Want, Demand Is Dying” – at the time, focusing on collapsing demand of both “need” retailers like Wal-Mart and McDonalds and “want” purveyors like Amazon.com.  Well, just this morning, Wal-Mart was at it again, dramatically reducing its long-term growth expectations due to the “strong dollar” – whose adverse effects we have practically screamed of all month; mandated food stamp spending cuts (amazing how this is the only program the government is cutting); and generally weak retail demand.

Conversely, on the “want” side of the ledger, eBay dramatically reduced its expectations, as fewer people are spending less money on internet auctions; whilst former “market darling” Netflix – the epitome of “want” purveyance – is down 25% this morning after dramatically reducing its own sales expectations.  But have no fear, the government’s “island of lies” economic reporting has no shame – in this morning, reporting that “weekly jobless claims” plunged to April 2000 levels.  Yes, my friends, this rigged meaningless metric claims jobless claims equate to that of the peak of the post-war global economy, simultaneous with a Labor Participation rate at 36-year lows, as well as essentially all other metrics of economic activity.  Remember, mid-term elections are just two weeks away, so the BLS and BEA data-cookers are working overtime to “paint the tape” – just as the PPT uses every illegal trick in its arsenal to preventing 2008’s horrors from exposing themselves in all their glory.

Labor Rate vs Jobless Claims

However, PPT or not, no manipulations are powerful enough to overcome the “most damning proof yet of QE failure” – i.e., the utter freefall of Treasury yields toward all-time lows as the entire world anticipates “QE to Infinity.”  To that end, yesterday’s yield plunge was unquestionably the most rapid in Treasury market history – with even 2008 unlikely to have witnessed a similar move.  Thanks to HFT algorithms’ utter destruction of market dynamics, the world’s largest financial market – U.S. Treasuries – moved like illiquid OTC stocks on not only their largest volume ever, but nearly ten times the average of the past decade!  Seriously, this chart has to be seen to be believed depicting a permanently broken market, enroute to a horrific, unprecedented conclusion.  The benchmark 10-year Treasury yield shockingly plunged from 2.20% to 1.91% in a matter of minutes before being run back to 2.16% at the close – followed by this morning’s plunge to 1.99% and 2.11% as I write at 10:35 AM EST, following an utterly hideous plunge in the NAHB’s housing market index from 59 in August to 54 in September versus “expectations” of 59.

European stocks are falling my BIG percentages with major indices like Germany’s DAX down 15% this month, but the U.S. PPT simply will not allow the daily 3% plunges common in Europe.  Yesterday’s low for the Dow was 450 points or 2.7%; but only for moments, before the PPT “Hail Mary’d” it to just a 173 point loss in the day’s final hour.  Just as this morning, with major European indices down more than 2%, the PPT wouldn’t allow Dow Futures to fall more than 1.5% with the market “miraculously” erasing most of its losses in the opening minutes of NYSE trading – just as it did yesterday, with the follow up second wave of selling also met by relentless PPT forces.  In other words, U.S. manipulators are using every tool in their arsenal to prevent the world from realizing the U.S. is coming apart at the seams – like the Cartel’s unrelenting “Cartel Herald” algorithms every time paper precious metal prices attempt to surge (in line with surging physical demand); as they did yesterday at the “key attack times” of 10:00 AM and 12:00 PM EST and this morning when gold attempted to surge toward yesterday’s “line in the sand” highs.  Not to mention, the Fed’s “new hail mary trade” goosing of Treasury yields from their lows at nearly the same minute in the early hours of New York pre-market trading, both yesterday and today.

24hr Gold Silver Charts  10-15 10-16

When all is said and done, the relentless Fed, PPT, and Cartel manipulations are not only patently obvious to the entire world, but no longer able to mask the fragility of the dollar-led Western financial system.  With stocks, Treasuries, commodities and currencies entrenched in the hideous, downwardly-biased volatility characteristic of collapsing markets, it shouldn’t be long before all control is lost – first, of the aforementioned paper markets and shortly thereafter, the physical gold and silver markets that act as the “financial world’s Achilles Heel.”

Before I go, please remember to look on the blog tomorrow when we upload this afternoon’s widely anticipated “Miles Franklin Silver All-Star Panel Webinar.”  Not to mention, an upcoming article and podcast describing significant, positive developments at Miles Franklin’s industry-leading storage program with Brink’s Montreal.  And given the stress and strain of working so hard against such powerful (but failing) forces, I wanted to share the joys of doing what I and the Miles Franklin Blog and Newsletter in general, do – as exemplified by a message received yesterday, from reader “Shelley”…

Hi Andy.  Great article as usual. Your words are like inhaling freedom!

 

Fire, Water…and the “4 G’s”

I have thought about writing this type of piece many times before but have only touched on the subject several times.  I had decided in the past not to venture forth because I was afraid that what I wrote might be perceived incorrectly and turn readers off to my main message of protecting themselves financially.  What I am about to write assumes we will have at least a short period of time where life goes back if not 150 years, but maybe to “caveman days.”

Before really getting started, ask yourself if you believe it is even possible for an event, or events (plural) could possibly send us back in time where one must be self-sufficient just to sustain life?  Is it possible for the global fiat money system to collapse?  Is it possible to have a widespread banking and financial system closure?  Is it possible for a war, any war to pass the Rubicon and go nuclear?  Is it possible for some type of pandemic (Ebola?) to become widespread which shuts the system down and people to within their homes?  Is any of it even possible?  In my opinion any or all scenarios are possible, the fiat money and financial system breakdowns are even highly probable in my opinion.  If you don’t believe this then what follows is a waste of your time …until maybe it’s not?

Assuming a few weeks or few months where “nothing works” as it once did, what can you do now to prepare yourself?  There are several areas, each with its own subsets and choices.  I will ask a few questions and hopefully if you have not prepared for anything yet, you get cracking.  If you have prepared then hopefully at least one light bulb goes on where you say to yourself “I had not thought of that.”  First, you have only so much money you can use to prepare with so you do whatever you can.  Secondly, if you live in a city or densely populated area, in my opinion you shouldn’t.  Remember, you can only do the best you can do and if/when things pass there is no sense in beating yourself up for something forgotten.

To begin with, fire and water are life’s necessities, the “4G’s” (God, Grub, Guns and Gold) will all have variable importance to your survival depending who and where you are.  The two most important things to mankind sustaining himself are “fire and water.”  If workers are not getting paid (or fearful of a pandemic) to man and maintain a clean water supply will they go to work?  What will you do for clean water?  If you live near a river or other water supply then great …but it’s probably not drinkable.  You can also put trashcans under your downspouts …this is probably also not drinkable.  Have you done anything to aid in purifying water?  Do you have Clorox?  A filtration system such as a Steri pen or even something as simple as purchasing Life straws?  Nothing can live without water, this should be your number one concern, and a filtration system should be a top concern.

Do you plan to boil water?  What will be your source of heat?  LP gas?  How many tanks?  Wood?  Have you ordered a cord or two?  How will start a fire?  Do you have massive amounts of newspaper or kindling to get it started?  Do you even have disposable lighters or matches?  What will you use for light at night?  The fireplace?  Candles?  Do you have enough to last a couple of months?  Had you thought about buying a dozen or so of the solar driveway lights and instead of prettying up your driveway, you won’t smack your knee on the coffee table after dark?

What about food?  How will you cook what you have?  Have you stored anything …at all?  Have you stocked up in the different categories such as bulk, protein, vegetables and fruits etc.?  How long and what are the expiration dates?  How long after the expiration dates is it safe to eat?  Have you stored your grains so that bugs will not infiltrate?  I personally found that “parboiled rice” stores much longer and does not attract bugs like other rice … (it also tastes better).  Do you have oil to cook with?  In my opinion, if you want to build a storage it should be done with dry products, canned products and topped off with dehydrated products that will last up to 25 years.  (Once you get the basics taken care of, don’t forget some “fun food.”  How great would some M+M’s, potato chips, raisins or even cookies taste after not having any for 2 months or more?)  Remember, you will need water for much of this.  If you want to cook rice, pasta, dehydrated packages or even MRE’s, you will need WATER and preferably FIRE to sterilize and allow for warm food.  I could write an entire book on this subject but YOU need to research and decide what is best for your family.  What is right for me, my next door neighbor or anyone else may not be the solution for you.  You may have a special diet, low sodium or even an allergy.  Some people are allergic to peanuts (I am), peanut butter is great for protein intake but not if it affects you negatively.  You need to try to think of everything in the food category, not just what will fill your bellies but for nutrition and the ability to actually prepare it.

What about household goods?  What if you have an ant or insect problem?  How will you get rid of your waste from food?  Maybe a little bit of gasoline will help you burn it?  Plastic bags?  What about “your” waste?  How will you dispose of it?  Have thought about what it would be like to “squat in the woods?  Two pieces of rope between two trees tied to a saddle “girth” to lean back on might be handy huh?  What about your medical products?  Can you purchase some of your meds ahead?  If your insurance company won’t let you buy more than 2 months ahead …can you purchase some from Canada or elsewhere to give you a buffer?  What about over the counter products?  Do you have any cold or flu medicine?  Aspirin or pain killers?  What about something simple like Rolaids or even diarrhea medicine?  Toothpaste or soap?  An extra couple of razor blades, shampoo and don’t forget the toilet paper?  I mentioned disposable lighters earlier, you would need these but here is a valid question …what would a .99 cent lighter be worth to someone who didn’t have one?  Would it maybe be worth a bicycle or something similar?

Speaking of transportation, what will you use if gasoline could not be procured?  A horse?  How will you feed him?  A bicycle?  What if it gets a flat?  Could you repair it or do you even have a pump to pump it up if it becomes low?  Speaking of a horse, do you have a cat or some dogs?  What will they eat?  Table scraps of rice and beans?  What will they drink for water?  So you live near a river and will get water from there and travel on your bike …can you protect yourself and your bucket of water?

Protection, this is a whole ‘nother topic.  Do you have any arms?  More ammo than just one clip or two?  Can you shoot and actually hit your target?  When was the last time you practiced?  Do you live in a state where it is legal to carry concealed?  Do you have a license in case you were stopped (if the police are actually working) while carrying?  How about a shotgun for close quarters at home?  Do you only have buckshot or did you remember to buy some birdshot for a squirrel or juicy white wing dove?  How about a pellet gun for a rabbit or something similar?  Have you ever cleaned and cooked an animal before or might it be a good idea to buy a book or print something from online now so at least you have an idea what to eat and what not to?

I have written extensively regarding “money” itself.  Do you have a little bit of “cash cash” which might spend for a short time period for something your neighbor has a surplus of?  How about silver?  Did you buy 100 ounce bars?  10 ouncers? Or did you buy rounds or junk which will be “spendable?”  Have you spoken to any local farmers and asked them if they will accept silver now?  Will they?  Do you even know any local farmers?  How about your serious capital?  Have you taken anything “out of the system” so if a financial collapse or even a major “hack attack” wiped out your balances, will you have anything left?

Another area I am sure some will roll their eyes at is “religion.”  Do you have any spiritual relationship with whoever your God is?  Should you?  Is it something you believe is worthy now?  Or when things look darker than midnight will you come around to it?  What about your physical shape?  Can you walk 10 miles packing supplies?  Have you exercised or tried to keep yourself in good shape given your age?

I have only scratched the surface here and I am sure I will hear from those who say what about batteries or radios or whatever.  Yes!  That is exactly the point of me writing this …THINK!  Think for yourself.  Think now about what you might need.  If I am wrong and we “live happily ever after” you can ride your bike, eat your food, have some fun target practicing and make your driveway the envy of your neighbors after dark!  And…You will be purchasing any and all items most probably “2%” (sarcasm) cheaper than you can get them a year from now!

Maybe I am wrong, I don’t think so.  In my opinion, the odds of some sort of major league “Black Swan” have increased greatly over the last couple of years and are approaching certainty.  Do I know what it will be?  Do I know when it will arrive?  Do I know how severe or long lasting affects it will have?  No, of course not, but I do know that “something” (many things) just ain’t right.  I know the population is now more unprepared than any time in my lifetime to be self-sustainable.  The will isn’t there, the ability is fleeting and the knowledge is almost gone.  No one will “prepare” anything for you, only you can “think” and then “act” for yourself.  Please do not fall into the trap I hear all the time …”they” will never let it happen.”  “They” have put us in the situation we now find ourselves and unfortunately it is my opinion “they” will kick the table over and then “blame” it on something “out of their control.”  The system is big, too big, and there is nothing anyone as an individual can do about it.  The ONLY thing you can do is be as ready as you can for when the table does get kicked over.  I hope this piece was helpful and even if just one person takes heed, it was well worth my time to write it.

Worldwide Fiat Implosion: How High Can Silver Go?

Andy Hoffman spoke with SGT Report to discuss bond yields around the world have now hit an average an all-time low, global interest rates plunging, oil prices, Shanghai Gold Exchange, gold and silver.  To listen to the interview, please click below.

Video: Worldwide Fiat Implosion: How High Can Silver Go?

My Most Important Audioblog Yet

On his weekly podcast, Andy Hoffman discusses the U.S. dollar, oil prices, gold and silver, U.S interest rates, record Silver Eagle sales and retail sales.   To listen to the audio, please click below.

Download the audio file: My Most Important Audioblog Yet

Video: My Most Important Audioblog Yet

 

Crashing Oil Prices Portends Unspeakable Horrors

OK, so how about that for a headline?  And no, we’re not exaggerating as the charge toward global depression, war and hyperinflation is exploding out of control, like terrified wildebeest pursued by a den of lions.  We wrote last week that the only difference between 2008 and today – aside from tens of trillions of debt and historic geopolitical tensions – was the PPT’s ability to manipulate equity markets higher.  However, “Economic Mother Nature” is decidedly asserting herself; and consequently, TPTB are massively losing control of paper financial markets.  Eventually, the physical gold and silver markets will be liberated as well, ending the Cartel’s disgusting, 15-year masking of reality.  And with just $50 million of silver inventory on the Shanghai exchange, and U.S. Mint sales on pace for one of their best months ever, it’s just a matter of time before the Financial System’s Achilles Heel destroys it – permanently.  Now, more than ever, it appears “it” has commenced – i.e., the “Big One.”

Athen's Headline

Frankly, we could write entire articles on no less than a dozen “horrible headlines” this morning, including…

  1. Greek stock and bonds collapsing as a 2015 default appears certain
  2. The collapsing French government, as Hollande has lost political support
  3. Plunging German growth estimates
  4. The growing Italian movement to secede from the Euro monetary system
  5. Growing support of Catalonian secession
  6. This morning’s horrifying plunges in U.S. Retail Sales, the Empire State Manufacturing Index and Mortgage Purchase Originations
  7. Wells Fargo reporting yesterday that mortgage activity has plummeted to 2008 Lehman levels
  8. The all-out global commodity crash, highlighted in today’s article
  9. Exploding currency volatility – i.e., the “single most bullish precious metals factor imaginable
  10. Unmitigated Western bond yield crash as the “most damning proof yet of QE failure” exposes a collapsing global economy.
  11. Exploding U.S. debt about to eclipse $17.9 billion due to the “unreported” $100 billion spent on Iraq, Syria and the Ukraine
  12. Last night’s absurd stock repurchase admission by Intel – likely, marking the painful end of one of QE’s most hideous shareholder-destroying practices.  It is estimated that 95% of all 2014 U.S. corporate earnings were plowed into buybacks – often supplemented by new debt – at historically high valuations, whilst average property, plant, and equipment averaged 22 years of age, its oldest level in 60 years.
  13. A new study purporting the largest “TBTF” banks may require $900 billion of capital to remain solvent

However, we don’t have time – so suffice to say, this morning’s burgeoning global market crash may well constitute the beginning of what could be a very, very rapid end.  The U.S. 10-year yield closed last night at 2.21%; but as I write, is down to an astounding 1.93%, in perhaps its largest daily move ever – en route first to ZERO, and subsequently INFINITY, when the upcoming imminent (yes, I said imminent) announcement of QE’s 4, 5 and 6 emerges.  Frankly, if the PPT can’t pull a rabbit out of its hat and “save” the world with unprecedented market manipulation, we think it likely the Fed will not only cancel the “taper” at its October 29th meeting but hint at reversing it entirely.

If we really get a sustained, disinflationary forecast … then I think moving back to additional asset purchases should be something we should seriously consider.

John Williams, SF Fed President, October 14, 2014

In other words, the “countdown to the Yellen reversal” has commenced”; and if it occurs this Fall, we may well see the long-awaited collapse of the gold Cartel.

24hr Gold 10-15

This morning, WTI crude prices are down another $1+ to $81/bbl., whilst Brent Crude has plunged to $84/bbl.  The carnage on energy industry equities is catastrophic, as all energy-related sectors have broken down to multi-year lows, portending a horrific 2008-style crash.

Energy Sector Graph

The desperate financial media will likely trot out headlines about “relief for the consumer”; but in vain, as not only is no one listening but the negatives of plunging oil prices so dramatically outpace the positives, it is all but comical.  It’s like saying that due to Ebola, consumers will benefit from the lack of traffic to the airports!  Frankly, the impact on global economies and politics from such an economic catastrophe will dwarf those of the 2001-02 and 2008-09 oil prices plunges, given the massive increase in sovereign debt, surging costs of production, and heightened geopolitical tensions in “hotspots” like the Middle East and Ukraine.  The fact that this morning, amidst a crashing ruble, Russian Prime Minister Medvedev said a restoration of U.S.-Russian relations was “impossible” says it all, as the global age of “de-dollarization” explodes.

Overseas, $80 crude puts the budgets of essentially all major oil producers underwater from Iran to Russia to even Saudi Arabia.  OPEC, which back in my energy analyst days of 1995-2005 was all-powerful, can no longer support prices.  And thus, as what we expect to be a far greater economic cataclysm than 2008 unfolds, it would not be surprising to see oil prices fall to $30-$40/bbl. again – as global economic activity utterly implodes.  Frankly, it is difficult to envision a scenario where the resultant geopolitical tension does NOT catalyze war – and hopefully not World War III.

Price Chart

But even uglier is the impact collapsing oil prices will have on the “last bastion” of illusory American success – the shale oil bubble that will surely collapse in short order.  On average, it is estimated that shale oil’s marginal cost of production is $85/bbl.  However, as we learned earlier this year, when the nation’s largest shale field had 96% of its reserves erased, the economics of this rapidly depleting resource are far uglier than the propaganda will have you believe – and the finances of venture capital financed “juniors” horrific, as their balance sheets were piled up with high-yield debt.  Eighteen months ago, I wrote of the “unending energy independence hype” I experienced first-hand as an energy analyst – and from everything I’ve read, shale is no different.  In other words, just as the first “pillar” of the “recovery” propaganda, housing, was decidedly broken this summer – the second, energy, is dead now too.

Only time will tell if TPTB can even slow the global economic and financial market collapse; and certainly, they can’t stop it.  If ever there was a time to heed the warnings the Miles Franklin Blog have proffered all these years, it’s NOW.  The window to PROTECT your assets from the inevitable hyperinflation that collapsing economies and currencies will cause is rapidly closing – as when the scant amount of actual metal runs out – as it did in varying degrees in 2008, 2011, and 2013 – you may never get another chance to procure it.

 

Who Could’ve Seen It Coming?

I can almost promise you when the dust is clearing you will hear “who could’ve seen it coming” everywhere you turn in the mainstream.  You will hear the financial pundits say it, you will hear many titans of industry say it and you will certainly hear the politicians and regulators say it.  The politicians and regulators will be running around with signs on their foreheads that say “don’t look at me” while babbling “who could’ve seen it coming?”

Before going any further, I do want to tell you there have been many who have seen it coming and have voiced their opinions verbally and in print.  Obviously, if you are reading this then you know I am included in this group who have been shouted down and labeled as “one of the crazies.”  If you think about it, “us crazies” were the only ones who saw 2008 and the financial crisis coming.  We were the only ones who foretold “why” it was coming and have said all along that the “fixes” would not work.  Were we laughed at and ridiculed in late 2006 and throughout 2007?  Yes, of course we were but I don’t remember the “fervor of our branding” as whackos as strong as it is now.  Maybe because the vast majority at the time were also long and recommending gold which was pushing new highs at the time.  Now, $1,230 gold which is some $400 higher than it was back then has “fallen” $700 from its highs so “we” must be even MORE wrong now?  If you cannot understand that increased physical demand should result in higher prices and when it does not …there must be a logical (nefarious) reason for it, then you surely must know “why” the stock market has reached its levels.  Heck, even Bloomberg has reported on “it.”  “It” being the “Plunge Protection Team” which many of us talked about well over 10 years ago only to be followed by blank stares, the rolling of eyes, snickers, and the whispers of “conspiratorial crazy.”

In any case, I figured I would write out a few thoughts now so when you do hear “who could’ve seen it coming” you can tell them “you” did!  If you ask anyone on the street today whether or not the U.S. government is broke, you will get an 80-90% answer of yes, the government is broke (even John Boehner publicly said, “We are broke”).  Everyone knows this but yet expect life to go on and not change compared to the old days when we weren’t broke?  Of course, dollars are issued (not really) and backed by this bankrupt government yet this 80-90% who believe the government is broke think that their issued dollars have value and are not affected by the bankruptcy of the issuer?

Then, we have the banking and financial systems.  These are regulated, backed (FDIC and SIPC) by government agencies and supported by the Fed and Treasury, it should be “safe” to put your worthless currency into an overleveraged institution backed by a bankrupt government …right?  It should also be safe to put your money into the bond market where all bonds are priced off of a benchmark of bonds issued by the bankrupt entity …right?  And the stock market?  This should be safe because the Plunge Protection Team has your back, the Fed will never raise interest rates, tighten credit or reduce their balance sheet …right?

As a side not, if even Bloomberg admits to the PPT supporting the stock market and the Bank of Japan publicly admits they are the biggest owner of Japanese equities, then what other markets might the central banks be “playing in?”  Yes I know, you are thinking the gold and silver markets …but please don’t go there because of the crazy looks you will get and who in their right mind wants to be labeled a “crazy?”

So we live in a land where the government has promised more than it can ever provide because the underlying economy isn’t big enough, has too many sucking off the public and not enough worker bees.  The economy doesn’t “make anything” anymore anyway but don’t let that bother you.  15% of the population is in a “bread line” but since this is 2014, it’s no longer politically correct to actually “stand” in a line…and in public no less!  Besides, those people were dopes back in the 1930′s, standing in line is actually work.  We now have more recipients than we have donors …who could’ve seen it coming?

Finance is now over 30% of the economy and manufacturing 10% or thereabouts …farming even less, who could’ve seen it coming?  Derivatives are now about 20 times the size of the global economy and 10 times the size of the equity and debt markets, who could’ve seen it coming.  Mom and Dad both work today and some even more than one job, I’m only 54 years old and really cannot remember ANY of my friend’s Moms working except for the school nurse, has something changed?  $1.2 trillion of student debt outstanding with an average graduate owing $30,000 …which cannot be wiped clean in an honest bankruptcy?  50 percent or more of our population living from check to check with no savings at all?  Nearly 15 years where 95% of the population’s standard of living has decreased because “nonexistent” inflation has grown faster than their paychecks?

I’ve only scratched the surface of the financials above and did not even get into social or public issues.  I didn’t even get into racial issues either but ask yourself if we are now “more harmonious” between races, religions or even “nationalities” than we were back in the old days …when we weren’t broke?  As for social and moral issues, I really shouldn’t go there but let me ask a question or two.  If an individual has poor morals, should they be trusted at their word?  Should an entire country?  I think this has been a common question and on a global basis recently.

Of course, we also have the largest military by leaps and bounds past the rest of the world combined.  Ask the average person if we have used our military wisely, fairly and justly?  Can a bankrupt treasury really afford the largest military in the world?  The average person can get the answer to this one correct also.

I could keep on going and going with examples but I won’t and rather finish with a few questions.  If it was the crazy lunatic fringe who foresaw the financial crisis coming, voiced it publicly (amidst laughter) and were correct not only in what happened but more importantly “why” …then why are “we” still crazy?  Oh, I know, because gold and silver have fallen in price?  “We” say gold and silver prices have been “diluted” with paper substitutes, are we crazy about this or does it make common sense that “something” is negating the simple laws of supply and demand?

If you agree that the façade, charade, house of cards, Ponzi scheme or whatever you’d like to call it is on its way down, please read my work tomorrow.  I plan to write about some common sense preparations which by no means will be a complete “survival guide”.  Hopefully it will make your brain churn a bit as to what might be needed to be done.  There is a possibility of “the worst case scenario” actually occurring, if this is the case, you should be thinking like a caveman here and now.

Miles Franklin Q & A: The Dollar Is Coming To An End

Q:  James Rickards has stated in a number of interviews that the centralbanks will fail within the next few years.  He also predicts that SDRs will then be used for world commerce.  Whether central banks or theWorld Bank aren’t we talking about the same group of snakes controllingthe money?

David Schectman’s Answer:

Richards believes in the “One World Government” movement.  They are there, hiding in plain sight and you can read about them yourself.  Check out CFR, Bilderbergers and Trilateral Commission.  You are correct; they all are part of the “elite” who wish to control the world.  Personally, I don’t believe we will see the end of the central banks.  There are too many high benefit, high salary jobs at stake.  People in power don’t easily relinquish it.  If SDR’s come into play, the dollar, as the world’s reserve currency, will be dead!  We have been warning our readers for a long time that the end of the dollar, as the currency that is used globally as a means of settlement is coming to an end.  I suppose if the dollar goes, there isn’t much need for a Federal Reserve, but we shall see.

So much to worry about these days – Ebola (will it become a global pandemic?); another war in the Middle East (ISIL?); With Europe already in recession, will the U.S. (officially) follow suit?  And will the stock market collapse?  Worrying about whether the central banks or the World Bank controls the money is not at the top of my list of things to be concerned with.  Rather than ponder who will control the new currency, why not prepare for the event and move your dollars into precious metals.  You will profit handsomely, if it happens.

Just watch the dollar (in the USDX).  Once it nears 72, the change you are concerned with will be close at hand.

Q:  I’m thinking that the metals manipulation is geared to the possibility that control of the US Senate may change hands after the election. Should that occur, an event would need to be quickly orchestrated (already in place??) to show the “world awareness” that this result is going to destroy the magnificent recovery that has been brought to us by the current leadership.


Remember- we were told that “We will reward our friends, and punish our enemies.”  In looking for an event to point to shift blame, could this qualify as one?

Bill Holter’s Answer:

I’m not really sure I understand the question.  Manipulation of markets has been going on far longer than for just this election cycle.  Gold and silver really came under the hammer going back to 1996 and before that with the London Gold pool which collapsed in the late 1960′s.

Are there not enough other events to point at?  Such as Ukraine, ISIS, Ebola, banks and financial institutions far and wide, Japan and Europe’s economies, Fukushima, China and Japan arguing over south sea oil or even the U.S. and Russia fighting over Arctic oil or anything in the Middle East?  The “something to point at” can be big, small, a known or an unknown, finding something as a “cause” could be as easy as a sneeze at this point.  I suppose pointing at rigged gold and silver could be a cause but in my mind the end of this rig will be more likely a result of something else rather than a cause.  Just my thoughts…

Q:  What would happen to the US economy and how would it impact the average person in the event that the US defaults on its Treasury bond payments to address the US debt?

Andy Hoffman’s Answer:

There are several facets to this question, as it depends under what circumstances such an event occurs under.  However, under all scenarios, the ramifications will be utterly horrifying for our way of life.  And sadly, it mathematically MUST happen – whether by outright reneging or hyperinflation.

Frankly, the latter scenario is unthinkable, as the U.S. has a “thing called a printing press” – in Helicopter Ben’s words – which it will surely use, under all circumstances.  This is how hyperinflation occurs – and in fiat currency regimes, there really is no other choice.

Suffice to say, either an “explicit” reneging or “implicit” reneging via hyperinflation, the result will be a precipitous plunge – by perhaps 50% or more in the dollar’s purchasing power, the end of its reserve currency status, universal hatred of America; and likely, draconian government actions (U.S. and others) and war.

In other words, what MUST happen WILL happen.  And thus, if you do not prepare beforehand, the impact on your financial net worth will be devastating.

Radio Appearance with John Stadtmiller – October 14, 2014

Andy Hoffman joins John Stadtmiller of the Republic Broadcasting Network to discuss the gold and silver markets, U.S. unemployment rate, manipulation of the markets, currencies collapsing around the world and the U.S. dollar. To listen to the interview, please click below.

Andy Hoffman – Republic Broadcasting Network – October 14, 2014

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