Let’s look at two different topics where we are seeing contradictory “evidence”. First up is what’s happening in the gold and silver markets. Never before have I seen sentiment as poor as it is today. Nor have I seen so many negative articles about gold in the various mainstream publications. It has gotten so bad, gold has even been compared to “pet rocks”! While we have seen food fights before, the name calling as of late has become deafening led recently by Martin Armstrong and Cliff Droke. I wonder how or what their response is to the physical side of the argument?
As you know, there have been “air pockets” in the price of gold over the last three years. Nearly always, these take downs occur at night and in particular Sunday nights. The last one a couple of weeks back, saw $2.7 billion worth of gold sold over a two minute span. I have asked the question many times, “who” controls this much gold and if we could identify someone or some entity, “who” would ever sell in a manner to destroy pricing if a profit motive truly exists? Can anyone conjure up an answer to this while including the phrase “profit motive”? I dare any of the gold bashers to answer these two very simple questions! Front running just a bit, any real answer I would imagine must have “desired lower gold price” as part of the explanation.
A very real problem or flaw in logic exists in the current gold and silver markets. If there is in fact so much selling (panic selling), how is it possible the U.S. Mint had to stop selling Silver Eagles nearly a month ago? It can only be for one of two reasons. Either they had enough silver but could not produce coins fast enough to satisfy demand, or, they could not source enough silver to make the coins. But this does not make any sense. How could there be “too much demand” if everyone is selling? Also, how could there not be enough silver available if everyone is selling and has sold? Where did all of this “sold” silver go to? Again, I dare anyone to come up with a logical answer to this.
We are also seeing the same thing in gold. It is trading in backwardation ($7 plus) in London and with substantial premiums in India and throughout Asia. If the masses are dumping gold then supply should be plentiful, how can physical tightness exist or premiums over the paper price exist if recently sold gold is falling out of dump trucks on their way to refineries? Any logical answers for this? The gold bashers say “see, the price is down, there is your proof”. Do Armstrong and crew deny that the only thing necessary to sell a COMEX gold or silver contract short is the ability to post margin? Do they deny that “money” (margin) can be and is created for free ? And then used to “water down” the futures in the same manner as a company over issues stock or a country over issues money supply?
There is a very real distinction between paper gold and physical gold, this will soon become apparent. The difference is physical in your own control is no one else’s liability. Paper gold on the other hand is the liability of the issuer of the contract. Currently, COMEX has a whopping 11.7 tons left of deliverable gold left. JP Morgan claims to have less than four tons, these are the lowest numbers I can ever remember. To put it in perspective, 11.7 tons of gold is worth less than $400 million dollars. The COMEX can now be broken and exposed with petty cash! As sure as the Sun will rise tomorrow, there will eventually be a “call” on real gold. Not only on COMEX gold but ALL paper gold …any call will not be met because the gold does not exist to meet the call. There are now more than 100 paper ounces of gold sold for every one ounce of real gold that exists to deliver. If there were 100 fake shares of IBM trading and watering down every one real share in existence, the price of IBM stock would be trading in the low single digits! The fake shares would alter perception but not the reality of what the company is worth as an ongoing concern.
Another area to touch on is the “threat” of the Fed raising interest rates. I view a rate hike as ONLY a threat at this point and will get into that shortly. Looking back, the Fed has floated the idea of rate normalization ever since early 2010. It was always six months out …and continually extended. But this time they really mean it? The consensus is now for a rate hike in September. I can only say one thing to Janet Yellen and the gang, I DARE YOU! In my opinion, if the Fed were to raise rates we might only have a functioning financial system for about 48 hours, I cannot see more than a week or two at the most.
Why is this you ask? Let’s count the ways … First, global trade is already imploding. China is entering a margin call scenario on many fronts. An already strong dollar is pressuring an over indebted world that owes in dollars. Internally, the U.S. is missing on many cylinders, retail sales and housing turnover already weak will become disastrous. Reported economic numbers are barely treading water even with bogus assumptions and accounting. Tightening credit will also have a negative effect on the banking system with razor thin margins and even more so in the derivatives complex. Higher rates on their own will create margin calls, not to mention investors scrambling for the door in fear of even more rate hikes. Panic begets panic in other words.
The way I see it, there is a very real probability the Fed not only does not raise rates in September, a very real chance exists for QE4 to be announced and implemented in a panic. It should be added that the possibility of forced U.S. Treasury sales by China is a distinct possibility. They may be forced to do this to shore up their panicky markets. Who will be the buyer? Yes of course, the Fed and ONLY the Fed! It is my belief the Fed is about to be tested beyond breaking not only as lender of last resort but also “buyer of only resort” when it comes to the Treasury market. Liquidity is already quite tight world wide, can the Fed really exacerbate the situation by raising rates? Is any economy anywhere in the world strong enough to bare higher rates? Any financial system solid enough? I DARE THEM to raise rates …I bet they will instead be forced to do the opposite and pump unprecedented new liquidity!
As usual, I have extremely timely, eminently actionable topics to discuss. And while I’d love to simply talk “big picture,” the collapse of history’s largest, most destructive fiat Ponzi scheme is moving too rapidly to be complacent. Trust me, I’d love to take a well-deserved rest – and man, is it well-deserved. However, the so-called “race to the finish” is on; and as I not only love my job, but feel compelled to do it as well as possible, there’s no way I’m going to slow down any time soon. In return, I ask for nothing but your goodwill, and help in spreading such “gospel” as rapidly as possible. That said, Miles Franklin would clearly appreciate the opportunity to earn your business, if you happen to be considering the purchase, sale, or storage of Precious Metals.
This week, it’s been a pleasure spending time with Miles Franklin’s first class team here in Vancouver – led by my “twin brother” Andy Schectman, who provided the Yin to my Yang at today’s presentations; with me answering investors’ questions about the markets and economy – and he, the “State of the Bullion Industry.” To that end, Andy and I have hosted numerous private meetings for investor groups throughout the country – and would be thrilled to do so for you, if you can put one together in your home town.
Due to my maniacal aversion to roaming charges, I kept my phone off for much of the day. And thus, when I returned to my hotel room to learn of Whirlybird Janet’s antics at the FOMC meeting, I was oblivious to not only its content, but subsequent market movements. That said, I wasn’t particularly interested, given my 100% expectation of “more of the same” dovishness – which is exactly what the Fed delivered, and then some. Moreover, I was itching to pen today’s primary topic, which I’ll get to momentarily.
Actually, the first thing I noticed when I turned on my computer was the appalling, expanding plunge in the National Bank of Greece’s ADR, ticker NBG. Not to mention, an equally ugly implosion of Greek sovereign bonds; as per what I continue to cover with laser like focus, it’s looking more and more like not only a “GrExit,” but the all-out political, economic, and perhaps social collapse of Greece may shortly occur. To wit, the IMF appears on the verge of backing out of the “bailout” negotiations before they even start – making it more and more likely that not only will Greece default on hundreds of billions of debt, but that its economy might disintegrate to dust. Reports of plans for “parallel currencies”; “new Drachma”; collapsing business activity, and even barter situations are expanding at an alarming pace. And trust me, once the world starts to refocus on Greece – and how not only was nothing fixed, but things are much worse than before – the already powerful downward pressure on stocks, bonds, and currencies will inexorably strengthen.
Which, in turn, will serve as a powerful impetus for the Fed to not only give up its charade of pretending to consider rate hikes – but reverse course 180 degrees, in inevitably announcing QE4, and potentially Negative Interest Rate Policy (NIRP) to boot. To that end, today’s FOMC statement was as dovish as I imagined; albeit, tempered by yet another successful “application” of the pre-FOMC drift – in goosing the “Dow Jones Propaganda Average” by more than 300 points in the hours surrounding the decision, as the PPT has done in nearly every such situation for the past two decades.
In fact, the sheer “laziness” I have noticed in recent FOMC statements – as clearly, the Fed has become way to confident in the PPT’s ability to “interpret” its word clouds positively – has caused it to let down its guard. To that end, despite continuing, unrelenting propaganda of how the Fed is “laying the groundwork” for a late 2015 rate hike, not a peep was made regarding such intentions. Or, for that matter, anything incremental; as, for all intents and purposes, the only material change relative to the June 17th FOMC statement was substituting…
“The Committee anticipates that it will be appropriate to raise the target range for the Federal Funds rate when it has seen further improvement in the labor markets and is reasonably confident that inflation will move back to its 2% objective over the medium term.”
“The Committee anticipates that it will be appropriate to raise the target range for the Federal Funds rate when it has seen some further improvement in the labor markets and is reasonably confident that inflation will move back to its 2% objective over the medium term.”
Yes, with the global economy collapsing around them, the best the hundred-plus taxpayer funded Fed wordsmiths could come up with was adding the word “some,” whilst changing not a single other word regarding the Fed’s economic forecast and updated monetary policy expectations. And thus, 53 Fed meetings since rates were taken to zero, not even the slightest inkling of a change in policy – which of course, must remain until “infinity” given the massive, unprecedented debt load incurred as a result of said policy. Not to mention, the horrific “unintended consequences” of ZIRP and QE, like the lowest U.S. home ownership in 48 years, and the highest average rents.
Moreover, an additional, extremely dovish statement emerged from the FOMC meeting – in this case, from the Fed’s “mouthpiece” at the Wall Street Journal, Jon Hilsenrath; who for the first time since the Fed’s “tapering mirage” commenced in early 2013, wrote a post-statement article backing off the relentless “upcoming rate hike” propaganda he has clearly been paid to espouse.
“The Federal Reserve on Wednesday kept interest rates near zero but cited progress in the U.S. job market, a sign it remains on course to raise interest rates in September or later this year. At the same time, however, it flagged a nagging concern about low inflation, which is creating caution among officials and could convince them to delay the day of the first increase.“
Not that I could care less what Jon Hilsenrath has to say – as being the Fed’s “mouthpiece,” essentially all he has hinted at since “getting the job” two-plus years ago has proven wrong. However, given that he clearly has his words put in his mouth, the fact that he is writing of FOMC “doubts” for the first time speaks volumes. Not to mention, as a “blistering” five-year Treasury auction was simultaneously priced – and oh yeah, a CRB commodity index on the verge of breaching 40-year lows, which certainly doesn’t foster expectations of the Fed’s “2% medium-term inflation goal” being exceeded anytime soon. Or, for that matter, “further improvement” in employment, when said commodity collapse is causing massive layoff announcements in mining, energy, and countless other sectors.
Which brings me to today’s primary topic, of which I can’t help but thank Doug Casey. Which is, the surprising content of his Sprott Conference speech, directly following Andy Schectman’s passionate discussion of Miles Franklin’s commitment to protecting clients with conservative investments in physical gold and silver. In it, he spoke of why mining is a “stupid, 19th century choo-choo train business” – which not only destroys capital at an unprecedented rate, but likely will disappear entirely in the not too distant future.
Frankly, he couldn’t have espoused better what I have been screaming for the past four years, after having witnessed it first-hand working for mining companies. Aside from the fact that mining shares are speculations – as opposed to physical gold and silver, which cannot be destroyed, wasted, or depleted – the mining business has become so difficult, it is next to impossible to profit from. Which, even if a miner is one of the “precious few” lucky enough to do so, still doesn’t guarantee equity investors will benefit. And if Casey’s contention that gold and silver prices are not manipulated turns out to be wrong – I think you know where I’m going with this – making money with such “paper PM investments” will be that much harder.
In his view, surging exploration, development, environmental, production, and tax expenses make it all but impossible for the industry to survive; much less, as Central bank money printing exacerbates these horrifying trends. He actually believes modern mining will ultimately be replaced by mining of the sea and asteroids, via nuclear fusion and nanotechnology methods that have yet to be invented. I’ll let you decide if and when this will occur (I’ll side with never and never); but either way, if you “bet” on such speculations, keep in mind that Casey has been one of the mining industry’s biggest advocates for a long, long time. Fortunately, he agrees that physical gold is one of the only commodities likely to rise in the coming years, due to said money printing. And as for mining shares, he ended his speech with what I deemed a “tongue in cheek” attempt at gallows humor, in claiming mining share owners are “waiting for a bubble to bail us out.”
I don’t know about you, but the last thing I’m looking to invest in is a bubble – let alone, one that hasn’t shown a glimmer of hope of commencing. And if Casey’s right about the mining industry’s “imminent demise” – and wrong about gold and silver prices being freely-traded – it strains credibility to believe there’s even a tiny chance of an imminent mining share bubble. As opposed to gold and silver themselves – which not only are experiencing record demand and vanishing inventories the world round, but will be the primary beneficiaries of the collapsing mining industry he himself forecasts.
And thus, as the Cartel continues to exacerbate such trends by relentlessly capping prices – as it’s currently, nonsensically doing at $1,100/oz gold (and how about the below “flash crash” while I was editing?), ask yourself 1) why you are invested in the sector in the first place, and 2) do you want to guarantee the long-term preservation of your wealth, or “wait for a bubble to bail you out?”
It’s 5:00 AM PST, and to say I’m tired is the understatement of the century. I’m in Vancouver for Eric Sprott’s annual investment conference, where the Miles Franklin crew is spending time with some of the continent’s smartest people. Last night was a particularly late one, and today Andy Schectman and I are giving two presentations. That said, I wanted to pen a few thoughts before heading to the conference – about not only the imploding global economy, but blindingly obvious upward “drift” of government-rigged “markets” ahead of this afternoon’s meaningless FOMC statement. Not to mention, equally blatant intervention to support the collapsing Chinese stock market; and of course, cap precious metals.
To start, let me just correct a mistake I made last week, in reporting that the world’s third largest gold miner, Anglogold Ashanti, lost $3 billion in the first half of 2015, and announced the intention to lay off 53,000 employees, or 35% of its workforce. As it turns out, said announcement was far uglier than I indicated; validating, in spades, what I wrote in last week’s “mining Armageddon” – as in reality, it isn’t just gold mining that’s suffering, but the entire mining industry. The reason being, it wasn’t AngloGold Ashanti that made the announcement, but “big brother” mining outfit Anglo American plc.
To wit, Anglo American is one of the world’s largest diversified mining companies – producing 40% of the world’s platinum, whilst owning the famous DeBeers diamond company and also being a major producer of iron ore, copper, and coal, among other key industrial commodities. AngloGold Ashanti was spun off in 2009, as its bankers convinced it the gold operations would receive a higher valuation independently. Of course, as usual, the bankers were wrong – as whilst Anglo American stock is down 71% from its 2008 high, AngloGold Ashanti is down a whopping 90% from its own high, in 2006. Forgive me for the mistake – as not only was I not home when it occurred, but the erroneous assumption was made principally because that very day, AngloGold Ashanti stock was plunging to an all-time low (which is being breached to the downside as I write). Which, as Bill Murphy of GATA would describe it, will just be “jacks for starters” if the Cartel isn’t broken very, very soon.
Speaking of plunging – I get to again write of my two “favorite” topics, Greece and China. Regarding the former, here we are three weeks after the supposed “saving” of the Hellenic republic, yet the only money that has changed hands is the €8 billion the ECB printed, added to Greece’s debt load, and promptly paid itself back with. As for the rest of the €86 billion Greece needs to survive a few more months, it hasn’t even been discussed yet – which is probably why the Greek stock market remains closed (although the National Bank of Greece’s ADR is trading at an all-time low); Greek banks, while “opened,” remain heavily capital controlled; and oh yeah, the Greek economy is in free fall, as new estimates suggest that since said Greece’s “saving,” retail sales have plunged nearly 70%. Yes, 70% – meaning whatever “bailout” number one has in mind, it probably needs to be dramatically increased.
Moreover, it appears that the IMF – i.e., one third of the “Troika” that will supposedly “bail out” Greece – appears unlikely to participate in said “bailout”; as will likely be the case with much of the rest of bankrupt Europe. And as for Greece, its political situation has gone from bad to worse – with embattled, lame duck traitor Prime Minister Alexis Tsipras threatening “snap elections” before said “bailout” is even negotiated. In other words, “GrExit” has never been more guaranteed than today – not just for Greece, but all of Europe’s “weak links,” starting with all the so-called “PIIGS.”
And by the way, kudos to Mark Grant of Southwest Securities, who did some major grunt work in piecing together what Greece really owes, outside the €350 billion or so of “on balance sheet” debt Wall Street and the Troika pretend is its debt load. As it turns out, Goldman Sachs did a far better job piling on “off balance sheet” obligations than even I imagined; as, in sum total, Greece actually owes closer to €575 billion – before said €86 billion of “bailout” funds are even considered. And, as mentioned above, said €86 billion likely way understates what in fact is really needed, especially now that the Greek economy is in free fall. And trust me, from the rest of the PIIGS to the United States of Derivatives and Accounting Lies, the amount of Enron-like “off balance sheet” debts and “unfunded liabilities” the world round is monstrous, the proverbial “tip of the iceberg.” Which we assure you, will “come out in the laundry” as history’s largest, most destructive fiat Ponzi scheme implodes.
Of course, Greece is “small potatoes” compared to the historic, world-destroying collapse ongoing in China. At 15% of global GDP, its horrifying economic implosion -aptly symbolized by the collapse of its PBOC-fostered equity bubble – is not only destroying “wealth” at a record pace, but setting up a desperate Chinese government to take the “final currency war” nuclear by inevitably de-pegging the Yuan. Which, when it does, will not only be the most disastrous financial event of our lifetimes, but will likely mark the beginning of the inevitable, global mad rush toward physical precious metals – which frankly, has already begun in earnest. Not to mention, in China – where inevitably it must announce its real gold holdings; which likely, are far higher than most can imagine. And by “far higher,” I do mean far higher.
As for the Chinese “stock market” – which for the second time in eight years has been clumsily hyper-inflated by its moronic Central bank, it’s become even less “freely traded” than the “Dow Jones Propaganda Average“; or, for that matter, the Dow’s sister “last to go” markets, paper gold and silver. To wit, despite furious, blindly overt PBOC support, Monday’s historic 8.5% plunge in the Shanghai exchange was followed with another 1.7% decline Tuesday. And if not for this morning’s PBOC-sponsored “Hail Mary to end all Hail Maries,” it would have been another day of horror for China’s 258 million, massively hemorrhaging retail margin accounts. Which, by the way, was matched “dollar for yuan” by the U.S. PPT’s prototypical goosing of the “Dow Jones Propaganda Average” ahead of today’s FOMC boondoggle – “dead ringer” algorithm and all; as has been its modus operandi for years, if not decades.
Yes, quite the stable, “run of the mill” 190 point Dow gain – on a day when bond yields plunged amidst one of the ugliest “consumer confidence” collapses in memory – not to mention, an equally “unexpected” decline in the Case-Shiller home price index (validated, by the way, by this morning’s “unexpected” pending home sales index decline.) And if you think U.S. real estate is weakening, you should see how many “for sale” signs are posted here in Vancouver!
Not to mention, equally prototypical Precious Metal capping at the same 2:15 AM EST (open of London paper market), 10:00 AM EST (close of global physical trading), and 2:00 PM EST “key attack times” as always, via the same “Cartel Herald” algorithm as we have witnessed for at least 15 years. Which, by the way, were followed by identical paper attacks this morning – at 2:15 AM, as always; the 8:20 AM EST COMEX open; and even the 9:30 AM EST NYSE open. And take a look at what price “coincidentally” marked the top. Yep, exactly the round number of $1,100/oz, on what was a COMEX options expiration day. Gee, I’ve never seen that occur before – as in, essentially every COMEX expiration of the past 13 years. And by the way, if anyone still pays heed to the comical propaganda claiming paper markets represent what’s going in in the physical world, not only is the U.S. Mint on a pace to have one of its strongest ever months of gold Eagle sales; but since it re-started “allocated” sales of silver Eagles on Monday, it has sold a whopping 2.6 million ounces. Which, if such a pace continues a few more days, will likely cause it to suspend silver Eagle sales again!
And one more point regarding silver, as discussed in last weekend’s Audioblog, “has the big one commenced?” In it, I discussed a trade I personally made Friday morning, in selling some gold Maple Leafs to purchase the last of the Canadian silver “Birds of Prey” series’ available, the “Red Tailed Hawk.” Well, lo and behold, it too SOLD OUT yesterday, demonstrating just how powerful physical silver demand has become – at today’s ridiculously suppressed prices, whilst fiat currencies the world round collapse. To that end, we are told the next Bird of Prey series will be issued in the coming weeks; and when it does, I’ll immediately relay the details.
OK, on to today’s primary topic – as if the other topics aren’t worth of “primary topic” status themselves. Which is, yet another reminder of just how imperative it has become for the Fed to “prime markets” before its policy statements – using all available manipulative tools, from its own “bond managing” operations; to the PPT in stocks; the “Exchange Stabilization Fund” in currencies; and of course, the gold Cartel. To wit, yesterday’s pitifully obvious Dow goosing, amidst horrific economic data and not a shred of reason for stocks to be higher – or for that matter, Precious Metals to be lower.
Notwithstanding the PBOC’s equally blatant support of the Chinese market – and likely, Central bank support, both overt and covert – of equity “markets” the world round, the U.S. PPT was simply continuing its “unwritten” policy of pushing the market up ahead of FOMC statements – such as today’s at 2:00 PM EST. Which, by the way, I spoke of in said Audioblog, in referring to likely “pre-FOMC drift” trading this week.
Essentially, said “drift” was discovered by the Fed’s own research, in realizing that between 1994 and 2011, roughly 80% of all cumulative S&P 500 gains were achieved in the 24 hours preceding FOMC statements. Which, given the fact that the Fed has been wrong about essentially everything it’s predicted – in the process, destroying the global economy – all but conclusively proves that the only reason stocks rise before he Fed speaks is its desire to keep markets “calm” and “happy” when “Maestro” Greenspan, “Helicopter” Ben, or “Whirlybird” Janet step to the podium. And trust me, the comically manipulative results demonstrated in this data covering 1994-2011 are no different in 2011-15, if not more so.
Amazingly, amidst the all-out collapse of global economic activity – including here, in the United States; as well free falling commodities, currencies, and even many stock markets, mainstream propaganda still calls for the Fed to – in the words of Yahoo! Finance – “push ahead with its rate hike plan.” To which, I can only shake my head in incredulity; as not only would a rate hike be unprecedented amidst an environment of collapsing economic activity and commodity prices – not to mention, stocks – but with the world largest, and rapidly rising, debt load; and most overvalued stock, bond, and real estate markets; the absolutely most devastating event possible for America would be rising interest rates (which, by the way, would decidedly NOT be “negative for Precious Metals“). And thus, we can only advise you to look through the pre-FOMC “drift” toward the “plunge” occurring in the real world – not to mention, explosive, record high Precious Metals demand – and “act accordingly.”
It’s Monday afternoon, just after the U.S. market close. I’m traveling to Vancouver tomorrow morning for the Sprott/Stansberry symposium; and aside from logistics, I’d like to spend a little time with the family beforehand – particularly as Sylvie appears to have gotten some type of summer flu. That said, enough horrifying economic and market events have occurred since penning “the only difference between now and late 2008” this morning to write a miniature book, so it’s not like you’ll be short-changed with this commentary.
Between said article and this one, I taped my weekly podcast with Kerry Lutz, titled “this is it.” Which frankly, couldn’t be more appropriate; as to answer the question posed in Saturday’s Audioblog – “has the ‘big one’ commenced?” – never have I felt more confident. Does this mean “TPTB” won’t do everything in their manipulative power to kick the can as far possible? Of course not, as I’m sure I don’t have to tell you. That said, it has become so obvious “the wall” has been reached, it’s difficult to believe everyone won’t realize this before long. And by “before long,” it’s hard to believe history’s largest house of cards will stand through year-end, in my view. And no, this is not a short-term “prediction” of anything – like stock, bond, or gold prices; but instead, a dire warning of things to come, potentially far sooner than most can imagine.
As for today’s “action,” it started with the second biggest decline in Chinese equity history; at 8.5%, just shy of the previous record of 8.8% – from February 27th, 2007, as the previous PBOC-fostered Chinese stock bubble was commencing a 71% crash within a mere 12 months’ time. Of course, the fact that 1,500 stocks were halted intraday means that, in all likelihood, China would have experienced a 1987-like crash if not for government intervention. Which, as we all know well, has been in full force since the Shanghai Exchange peaked two months ago, 20% above today’s levels – and will certainly be in full force tomorrow, according to the previously conspicuous, but now headline-seeking CSRC, or China Securities Regulation Commission. I mean, they did such a job preventing the 2007 and 2015 bubbles from starting – and ending well, that what could possibly go wrong?
“China will continue stabilizing the market, and sentiment, to prevent risks,” the CSRC says. “Malicious sellers will be dealt with severely.”
“Malicious sellers?” You mean like the ones that long ago marked gold and silver mining shares for death? Or at the least, deemed them to be nothing more than Cartel “signals” of impending gold and silver raids – at the expense of not only tens of thousands of mining jobs and tens of billions of sovereign revenues; but the entire worldwide monetary system? Not that I care anymore, having “paid my dues” in the mining industry from 2006-2011, watching not a single executive stand up for shareholders – or, for that matter, in the ensuing four years. Conversely, now that I work in the bullion industry, and invest solely in physical gold and silver, the “mining Armageddon” 15 years of paper suppression has caused will only make my product – and life’s savings – more valuable.
To that end, following last week’s “Sunday Night Paper Massacre II” – in which paper gold was taken down by $52/oz in roughly one minute’s time – I opined that the ensuing mining collapse – yielding the “biggest supply reaction in commodity history” – was officially “set in stone.” And watching the Cartel attack mining shares as they did today – when their paper gold and silver raids largely failed – I couldn’t be surer of not only “peak gold” and silver, but the imminent shortages that will prevent hundreds of thousands of people from protecting themselves from the upcoming, inevitable, global hyperinflation.
Recall, it was just Friday when we learned that Anglogold Ashanti, the world’s third largest gold miner, lost $3 billion in the first six months of 2015 (before July’s historic Cartel raid), and is consequently laying off 53,000 employees, or 35% of its worldwide work force. This afternoon, this horrifying reality was really driven home by Cartel naked shorting; taking AngloGold’s stock down another 6.2%, as well as the stocks of nearly all its peers – such as the world’s largest gold miner (and top bankruptcy candidate), Barrick Gold, which plunged by nearly 5% itself.
Of course, the reason for such paper attacks on the hapless miners was, for the second straight day, because “Cartel Rule #1″ was in danger of being breached; i.e., “thou shalt not allow PMs to surge, whilst the Dow plunges.” On Friday, the Dow’s decline was stopped cold at the time-tested “PPT limit down” level of 1.0%; and sure enough, in true “dead ringer algorithm” fashion, the Dow bottomed as soon as the NYSE opened – EXACTLY 1.0% below Friday’s close. And this, whilst China was down 8.5% and Europe 2.5%; not to mention, as the CRB Commodity Index plunged anew, to within a half percent of its 2008 spike bottom low.
In fact, most of the CRB’s damage was done late in the day, demonstrating just how comically obvious today’s manipulations were (i.e., the “only difference between now and late 2008″) – with both crude oil and “Dr. Copper,” among others, closing at the day’s lows. As did interest rates, just two days from Wednesday’s FOMC policy statement; which, if the combined efforts of the Fed, PPT, ESF, and gold Cartel are not successful in the coming 48 hours, Whirlybird Janet may not only give up the ghost regarding hints of potential rate hikes, but speak openly of the consideration of incremental “easing measures.” Which, of course, would be like a hunter shooting blanks at a raging Grizzly Bear, as the entire world is starting to realize the only “weapon” remaining in the Central banking “arsenal” is hyperinflation. Which, based on 1,000 years of monetary history, is guaranteed to be launched – likely, sooner rather than later.
“Deflation” notwithstanding, the cost of living continues to rise for the world’s “99%,” with each dollar, yen, Euro, and Yuan printed. That said, the cost of living has little to do with commodity prices – which are plunging as rapidly as expenses like insurance, rent, and healthcare are surging, causing an equally horrific catastrophe for global corporations, municipalities, and sovereignties. And just as the nature of fiat currency Ponzi schemes is its necessity to continue expanding – and thus, diminishing worldwide purchasing power; the nature of today’s historic commodity oversupply will be to destroy all commodity providers and vendors, as well as countless tens of trillions of soon-to-be-worthless financing, starting with high cost providers like U.S. shale oil.
Again, I cannot emphasize enough just how dire the below chart is; as frankly, the only way it won’t break through 40-year support in the coming 6-12 months – if not sooner – will be the aforementioned, overt hyperinflation of “reserve currencies” like the dollar. And by the way, the only times the CRB Index approached the 200 level in the past 20+ years were at the bottom of the 2008-09 financial crisis; the month after 9/11; and the “perfect storm” oil collapse of early 1999, which took WTI crude to $9/bbl amidst an otherwise soaring global economy – which I know of exceedingly well, having been a Wall Street oilfield service analyst at the time. Sadly, this time around, commodity prices have plunged without the “scapegoat” of a singular political or economic event, demonstrating how supply/demand fundamentals alone are the cause; and begging the question of just how scary things will get when such “black swans” inevitably arrive. Perhaps, ironically, said “swan” may well be Greece; where, “bailout or not, the situation gets uglier with each passing day.
In a nutshell, the walls are rapidly closing around history’s largest fiat Ponzi scheme, from every angle imaginable. In many parts of the world, “game over” has already arrived; and in those where it hasn’t – such as said United States of Manipulation – it appears to be right around the corner. To that end, aside from protecting your wealth with Precious Metals – hopefully, purchased from and/or stored with Miles Franklin – we sincerely hope you have spent the last few years of slow motion train wreck preparing for what’s coming; encompassing not only your wealth, but all aspects of your life. Frankly, I have never been more terrified; and hopefully, you too live by the mantra of “preparing for the worst, but hoping for the best.”
Financial Survival Network
Special Monday edition with Andrew Hoffman. Get the low-down on all this and more:
- Manipulation is starting to collapse!
- Commodity, equity collapse!
- China stock plunge, economic implosion.
- Record low currencies
- Surging pm demand, key reversals upward
- End game in sight, everywhere!
- Check out – today’s article, “the only difference between today and late 2008)”