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A Flock of Black Swans in June?

Very soon we will be entering the month of June.  Normally June is the time of year in the northern hemisphere when people think of picnics, parks, water sports and the outdoors.  It is a time where plans are made for vacation, rest and relaxation.  This year may be a little bit different.  I say “different” because there is a plethora of converging events, any single one of them with the ability to take the financial markets down to their knees!

Let’s first list the events (which may not even be all inclusive because I either forgot something or am unaware of).  What I see converging in June is as follows; the Austrian mortgage banks and banking sector, Greece, Ukraine, India, Russian sanctions, a Russian/Chinese announcement, the “very secret” TPP, and let’s not forget the second largest gold expiration on COMEX.

Since we know so little about the TPP (Trans Pacific Partnership), let’s start with this one.  We know so little about it because it is being negotiated in secrecy.  So “secret” in fact, anyone who gets to see what is written so far is threatened with jail time if they divulge anything about it.  This harks back to Obamacare when Nancy Pelosi once giggled like a little school girl and said “we have to pass it to see what’s in it!”.  Fast forward and yes, we now know what was in it, a healthcare industry in turmoil, higher premiums and a “tax” if you don’t participate…  Going all the way back to NAFTA, none of these deals has been “good” for the American worker, one can only imagine how deafening that “giant sucking sound” will be that Ross Perot first heard in 1991?  Not even sure how this is possible, our legislative process has been kidnapped with no ransom even requested.  If this masterpiece gets unveiled in June, a wonder as to market reaction?

Next there is the Austrian mortgage bank Hypo Alpe Adria, will they make their smallish payment of 500 million euros or will they start a chain reaction?  If you recall, this pinch came about when the Swiss de pegged the franc and revalued some 20-30% higher within 10 minutes, in many cases it made the loans in Swiss francs worth more than the underlying properties themselves. The southern province of Carinthia has already backed away from pledges previously made by simply saying “we can’t pay”.  An important understanding is how all of these banks …own each other’s debt.  In other words, the “cross ownership” of debt means that when one goes down it will act as a hit to many of the other’s portfolios.  While this is not a huge trigger, all of Eastern Europe can and will be affected by what originated from the Swiss de pegging the franc from the Euro.  With the system as illiquid as it is, there is no telling how far this one could reverberate?

On to Greece, they have already raided pension funds and sequestered local monies, June 5th is the deadline according to their finance minister.  They owe 320 billion euros, they do not have the money to pay nor do they have a printing press to create it.  The only way out is to borrow more …or default and fall into the open arms of Russia and China.  The latter seems most likely to me.  Greece is a natural trading partner with Russia and does sit along the “old silk road”, moving away from the U.S. and even the Eurozone seems a natural.  Please remember the big “nut” here is not the 320 billion euros, it is the CDS written in multiples on their debt AND the interest rate swaps in existence, these are in the TRILLIONS, not chickenfeed in an already illiquid world!

Logically, the next one to segue into is Russia and the NATO sanctions due to expire …in June.  If a vote were to be taken today, would the sanctions be re imposed?  Would Germany vote for them?  Will Greece vote for them if they are still a member of NATO by June?  Please understand the relationship between Mrs. Merkel and Mr. Putin, they “used to” talk on the phone daily …until the NSA spying revelations of last year.  Will Mrs. Merkel go for more sanctions?  What will she do about further aid to Greece.  Greece has the ability to ignite many things, financially and politically all bad for the West.

Moving along, let’s look at Ukraine.  The IMF is seeking a restructuring (read haircut) on $10 billion worth of Ukrainian debt with private holders.  This, the IMF says is necessary before another aid package of $40 billion is approved.  The “haircuts” requested are in the neighborhood of 40-50%, will this one fly?  Let’s not forget, Russia lent $3 billion to Ukraine in late 2013, I wouldn’t bet they will be accepting haircuts any time soon.  In fact, wouldn’t it behoove Russia to watch Ukraine default …and further pressure the financial system of the West?  Interestingly, John Kerry just met over the weekend with Russian minister Lavrov, what exactly did they talk about?  If I had to speculate, my guess would be the U.S. has just walked away from this pink elephant.  But why?  Why would the U.S. walk away now?

Again, further speculation but it seems to me quite odd that Russia would announce “Chinese gold holdings” of 30,000 tons via Pravda.  To rehash this, would Pravda have released this article without Moscow’s permission?  Would Moscow have given permission without the approval from Beijing?  Was Mr. Kerry/Obama informed that China will announce this 30,000 ton hoard of gold shortly?   Is it a true story or not?  As I wrote a few days ago, “gold” is a financial thermonuclear weapon, able to destroy the fiat of the West.  It would not surprise me in the least if Washington was given the “courtesy” of a heads up to some sort of coming announcement even if a smaller sum than 30,000 tons.  The point here is this, any announcement by China raises the question of Western holdings which of course brings Western currencies into question.  It will be very interesting to see how forceful the U.S. is regarding Ukraine, this gold issue may just be the “softener”?  I believe we will see very soon whether or not the U.S. changes tack regarding Ukraine (amongst others) as I suspect the Pravda announcement was no error at all.

Another June deadline is India trying to remonetize gold .They propose to allow the deposit of gold on account and interest paid on it.  This would immediately boost the economy with a shot of adrenaline as collateral would be massively boosted and lending could blossom.  The only problem is that this is about the 5th or 6th time such a plan has been trial ballooned and even if passed, the citizens of India will probably not go for it in masse anyway.  They have a long history of holding their gold in hand with no counterparty risk between them and their gold.  It might work to some extent but the number of 25,000 tons being deposited is a pipe dream.  It should be said however, when China does finally announce their holdings and increase their ability to “price” global assets, the Indians will sit at the table as there is no doubt they hold massive quantities in total!

Lastly but not least important is the June gold expiration on the planet’s favorite gold “pricing” mechanism, COMEX.  As of today, there are 187,500 contracts open for June; this represents 18.75 million ounces of gold or 581 tons.  The “registered” for delivery category has been bled down to about 11 tons or about 378,000 ounces of gold.  The first notice day is June 1st, only seven trading days away.  Does anyone see a potential problem here?  A “problem” as in there are 50 ounces of gold contracted for every one ounce COMEX claims to have?

Yes, yes, I know I have gone through this exercise before and each time the open interest just dried up and blew away.  In fact, many expiration months have seen accounts FULLY FUNDED with cash to purchase the gold on first notice day, only to “go away” later in the month.  This makes no sense whatsoever.  Why would anyone fund their account fully in order to pay for purchase and then just walk away? On the other side, why would any short not deliver on the 1st or 2nd day of the month as they must pay storage costs for each day they don’t deliver?  The answer of course is very simple, the gold does not exist to make delivery and the shorts do not want to let go of what very little they have …and instead cash settle with a little cherry on top?  Before finishing this section, it should be pointed out that the ETF GLD has bled 17 tons over the last few weeks where gold rose $50.  How does this make any sense at all?  It only makes sense to me if someone needed the metal to deliver elsewhere and immediately.  A strange occurrence but a topic for another day.

So there you have it, June could be quite the month as many events all converge over the 30 day timeframe, and none of them good!  I have warned and warned, you must have exactly the positions you want should the markets close and not offer you the chance to alter.  Please, imagine a world where things actually make sense and logic counts for something when it comes to valuing assets.  Let’s call it “Mother Nature world” where values make some sense and are actually related to each other and to reality.  How would your portfolio or financial position look like if we woke up one fine Monday morning in June to a brand new world?

GOTS: Get Out Of The System!

Andy Hoffman joins me to document the collapse for May, 2015. We discuss the Fed’s fudged meeting minutes, the Big Banks latest crimes for which they’ve paid billions in fines yet NO ONE goes to jail, the Bankster’s desire to BAN CA$H, Mockingbird donations to Bill and Hillary Clinton, and the litany of reasons to GOTS: Get Out Of The System!

CLICK HERE FOR THE LINK

JUST WHEN YOU THOUGHT THE WORST HAD PASSED

Nothing will please me more than when Whirlybird Janet is forced to admit the Fed has been wrong all along.  That said, when said “Yellen Reversal” inevitably occurs, it will likely usher in an unprecedented era of financial market instability and accelerated economic decline; and consequently, heightened social unrest, geopolitical instability, and a host of other nasty events (like a “Grexit” or Catalonia, Spain secession) that will make life far more difficult for not just the parties involved, but all of the planet’s seven-plus billion denizens.  This is why wise investors prepare for such worst-case scenarios beforehand; which in terms of financial assets, only physical Precious Metals have consistently proven their worth throughout history.

The Fed – as well as its Washington, Wall Street, and MSM minions – will continue to cheerlead until the bitter end, sitting atop the Titanic’s bobbing stern shouting “recovery.”  As will the ECB, BOJ, and all the world’s Central bankers, in their eternal quest to maintain a murderous status quo, in which the “1%” that own them gather all the world’s wealth, at the expense of the “99%” that actually built it.  However, like the Titanic, it is a mathematical certainty that history’s largest fiat Ponzi scheme will go down; and like the Titanic after it hit that fateful iceberg, the countdown to its demise has not only started, but is in its final economic “hours.”

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All one has to do is search the daily headlines to realize how not three, four, or even five of the economic Titanic’s air tight compartments are now full, but all of them.  Just look at China, which last night revealed several extremely scary data points – starting with not only its fourth consecutive quarter of foreign capital outflow, but it largest ever quarterly deficit.  Throw in the official launch of the municipal debt “swap” program which is essentially a new form of QE, and you can see just how panicked the Chinese government is regarding the collapse of its historically unrivaled real estate, construction, and infrastructure bubble; which is probably why, taking a page from the Fed, it is attempting to bail out every zombified entity imaginable.

Not to mention, creating a new, “bigger and better” equity bubble; undoubtedly, directly monetizing stocks the way the Fed does covertly – and the Swiss National Bank and Bank of Japan overtly.  However, no matter what they do to defer “Economic Mother Nature’s” wrathful vengeance, it’s graphs like this – of steel prices hitting 12-year lows – or this and this – depicting the exploding gap between rising U.S. and European stock prices and plunging economic activity – that tells the real story of the horrifying direction the world is headed.  Or, worse yet, the parabolic debt explosion that must eventually implode – perhaps, far sooner than most can imagine.

To that end, things are getting so bad, government attempts to fudge economic data have moved beyond laughable, to the point of transparency so blatant, even a reasonably intelligent child can see it.  To wit, this morning’s “better than expected” Japanese 1Q GDP growth – which, like America’s, was entirely due to inventory building.  In other words, no growth at all – but simply, the manufacturing of products that may or may not be sold; and either way, must be “unwound” via future GDP contractions.  Perhaps this is why it was a mere four weeks ago – after the supposedly strong first quarter concluded, that a major Bank of Japan official not only said a “natural exit (from QE) is out of the question, as is unwinding,” but “the thought of exit itself is a nightmare.”  Meanwhile, we’re told that yesterday’s U.S. housing starts surge (entirely due to a mysterious, aberrational surge in the Northeast) suggests the worst has passed – when in fact, overall housing starts remain below the trough level of each of the past five recessions!  Not to mention, that with historically low mortgage rates on the rise, already weak mortgage application data is again rolling over (see this morning’s 4% weekly decline).  And this, in an environment of three-decade lows in home ownership, first home purchases, and even family formation – care of the imploding economy and massive debts that make it impossible for most of the nation’s youth to get started.  And if any chart demonstrates just how lop-sided the so-called “housing recovery” has been – i.e., exploding values of high-end “1%” homes, whilst all else flounder – it’s this grotesque, unsustainable depiction of plunging home sales, but surging average prices.

Since the historic oil price crash commenced last Fall – you know, the one Whirlybird Janet deemed “transitory” six months ago; as well as a “net positive” for the economy, despite energy being the largest component of S&P 500 capital expenditure, and the only sector to boast positive job growth since the 2008 crisis – the global “commodity crash” has dramatically worsened.  A brief dollar decline – and incessant “oil PPT” and “copper PPT” support – have temporarily taken the focus away from broad, global commodity price weakness (like the aforementioned steel collapse) that is destroying corporate profits the world round; and sadly, due to four decades of Central bank fostered “deformation,” is destined to remain for years to come.

As you can see below, commodity prices remain barely above March’s lows – which themselves, were roughly the same as the spike low amidst the 2008 financial crisis.  This week’s horrifying base metal decline, smashing prices by nearly 10% in a 36-hour period, appears likely to be a resumption of the catastrophic, terrifying commodity plunge that started the year; all the more ugly, as global stock markets – manipulated or not – are currently “ignoring” the hideous ramifications.  And now that the dollar is surging anew – also, likely to have ended a modest countertrend move – the inflationary pressures on collapsing global currencies will exacerbate the aforementioned risks further.  Not to mention, it will put heightened pressure on the Fed to step up the “final currency war” by easing policy further, to prevent the dollar from rising too steeply against currencies with Central banks dead-set on destroying their own fiat toilet paper.a2

Throw in the potentially catastrophic “tectonic market shifts” we have warned of the past two weeks – of the relentless rate rise occurring despite the aforementioned deflationary factors (which as we discussed yesterday, most likely involves Chinese Treasury selling) – and you can see how clearly, the “worst” has decidedly not passed.  And by the way, for those fearful that such a “deflationary collapse” will hurt Precious Metals, bear in mind that whilst such commodity carnage was occurring earlier this year, gold and silver were the world’s best performing asset classes.  As they were as the 2008-09 financial crisis unfolded – particularly in the physical markets, where supply dried up and premiums surged.  And as for yesterday’s blatant Cartel smash, it naturally commenced just after the 10:00 AM EST close of the global physical markets – not to mention, after the entire 9% base metal crash had already occurred.  Such attacks are inconsequential in the big picture, as they only serve to exaggerate the “supply response” that will pave the Cartel’s demise.  Of course, if you hold mining stocks assuming they will be “proxies” for PM price movements – despite the fact they haven’t been for nearly a decade – you are putting your financial life into fate’s hands.  Nearly the entire junior sector has already been destroyed; and as for the majors, more than a handful of names appear dangerously close to death’s door.

All that said, I’m “champing at the bit” awaiting this afternoon’s publication of the FOMC’s April 29th meeting “minutes.”  Long-time readers are well aware of my view they are doctored to account for current market conditions; and since that meeting, global economic data – notwithstanding a handful of aberrational and/or rigged data points – has utterly collapsed.  The Fed’s own “now-cast” projects the first quarter’s miserable, likely to be downwardly revised +0.2% GDP growth to be followed by a mere +0.7% in the second quarter; and as noted above, the ECB has for all intents and purposes increased its QE program just two months after commencement, whilst the PBOC has initiated its own.  Worse yet, interest rates and the dollar are surging – whilst commodities and currencies are plunging anew, all but necessitating the Fed to be more dovish.  As if February’s “most unequivocally dovish FOMC statement in memory” wasn’t enough!

If any remaining cheerleaders, propagandists – or pardon my French – idiots, still believe the Fed may raise rates at its June 17th meeting, they will likely be forever silenced this afternoon.  And shortly afterwards, the “September rate hike” believers – and thereafter, anyone that still believes a rate hike will ever occur.  Clearly, the “worst” has far from passed – and in fact, is just getting started.  By year-end, my sense is no one will even recognize the “good times” today’s miserable global recession represents.  And quite possibly, even the chief propagandists will give up believing in an institution that has wrought more economic damage than any in history.

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With Central bank balance sheets loaded to the gills with toxic “assets” already, and most having already taken interest rates to zero (or lower), not only will their credibility be destroyed, but their ability to respond to the next crisis – which, most likely, will be “the big one.” that changes the world forever.  Not that previous “responses” have achieved anything other than kicking the can a few years further, by dramatically worsening already unprecedented financial messes.  Consequently, time is running out to protect yourself – as when “the worst” truly arrives, if you haven’t protected yourself already, it will be too late.

 

Audioblog #96 GDP Lunacy Confirms 1984 Has Arrived

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GDP LUNACY CONFIRMS 1984 HAS ARRIVED

IF “THE CHILDREN ARE OUR FUTURE” – RUN!

Given how paper financial markets have been completely commandeered, I have in recent years spoken little, if at all, of “valuation”, “fundamentals”, and “technical analysis.” In my mind, all the financial community was taught for centuries has been rendered meaningless by government intervention – which is why it’s become futile to “invest” in stocks and bonds, particularly on the short side that governments attack as viciously as gold and silver longs. To wit, yesterday’s prototypical “dead ringer” algorithm on the “Dow Jones Propaganda Average“; whilst gold was attacked at the “key attack times” of 10 AM and 12 PM EST – and subsequently, “contained” with equally prototypical DLITG, or “don’t let it turn green” algorithms….

…before being violently attacked at today’s COMEX open, and again at 10:00 AM EST (yes, they took paper silver down 3.5% in ten minutes, to eliminate the burgeoning bullish PM sentiment that even Miles Franklin experienced yesterday.  Of course, given that global PM demand is already soaring, and supplies tightening, all these attacks will “accomplish” is an explosive supply shortage in the coming months and years – particularly as said suppression has put the PM mining industry on the verge of collapse – and irreversibly, “peak production.”  To that end, I wrote two years ago of the implosion of the high cost South African gold mining industry; and watching stocks like Goldfields, Harmony, and Anglogold Ashanti implode into the abyss, it wouldn’t surprise me if the world’s fifth largest gold producing nation experiences an utter collapse in production unless prices dramatically increase, in the very near-term.

I didn’t think it possible, but today’s financial asset mania is far larger – and ultimately, will prove far more destructive – than the 1990s internet bubble.  Only this time, retail participation is at or near all-time lows, given the massive losses incurred in both the 2000-02 stock crash and 2008-09 financial crisis.  Which is probably why the Pied Pipers of investing, CNBC, are experiencing all-time low ratings.  To wit, internet blogger Mark St. Cyr last night described exactly how capitalism and free markets have been annihilated in the post-crisis world – setting us up for a far larger, far more cataclysmic crash.

“Before QE and the outright intervention of monetary policy directly influencing stocks – people bought stocks reflective of the economy. Today? Central Banks across the globe are now openly manipulating markets as a matter of policy.”

Nothing saddens me more; not just because money printing and market manipulation destroyed the vocation I spent 25 years pursuing, but because the world’s “99%” (myself included) are suffering from the virulent, ever-expanding price inflation it has spawned. Worse yet, the resulting economic “deformation” has generated unprecedented global overcapacity – and hopelessly mangled balance sheets – yielding a bleak economic future that could take decades to “normalize.” That is, after the horrifying fiat currency regime responsible for such carnage destroyed. Which, of course, it will – as will the “profits” enjoyed by the handful of people with large stock and bond portfolios; perhaps not nominally, but certainly in real terms.

Even Wall Street, which benefits more from the free money, manipulated markets, and non-existent regulation than anyone, is starting to realize that while the casino is rigged, it must inevitably go bankrupt; which is quite the apt example, given how global gaming revenues – representing the epitome of discretionary spending – are in freefall. To wit, the astounding commentary from Wall Street ringleader Deutschebank yesterday afternoon – as reported by Yahoo! Finance, no less – that perhaps we are in recession. Or better yet, Merrill Lynch’s recommendation this morning, to “add gold” given potentially dangerous and volatile market conditions. Huh? Wall Street advising us to buy gold as a safe haven investment? Comically, Wall Street’s 2Q GDP “consensus” is as over-optimistic today as it was halfway into the first quarter. However, given the aforementioned Wall Street comments, it shouldn’t be long until even their ridiculously upwardly biased cheerleading expectations trend toward the ZERO growth America is at best experiencing.

And this, amidst today’s (Tuesday’s) “markets” featuring exploding Chinese stocks because the Chinese government is encouraging banks to lend to insolvent municipalities (can you say upcoming, hyperinflation QE?); and exploding European stocks – upcoming “Grexit” notwithstanding – because the ECB intends to “frontload” its QE program ahead of an expected “low liquidity” period this summer. In other words, the horrifying collapse of the Euro – and explosion of Europeans’ cost of living, despite ZERO economic growth – is simply not enough for Mario Draghi. And thus, he’s literally making up reasons to accelerate QE – and consumer inflation – further, by pretending banks have “seasonally weak” liquidity during the summer. Just like King.com – which I mocked yesterday – claiming to have “seasonally soft” online gaming traffic during the summer – LOL. Here in the States, this morning’s extremely ugly Wal-Mart earnings report and outlook wasn’t enough to slow the aforementioned stock mania one bit – especially after Chicago Fed President Charles Evans claimed it “not appropriate” to raise rates until 2016.

However, with oil prices finally starting to succumb to the horrifying reality of historic, rapidly expanding oversupply; and the “copper PPT” I have harped on for months being overwhelmed by “Economic Mother Nature” (base metals, on average, are down an incredible 9% in the past 24 hours, rejoining the rest of the collapsing commodity universe); the PPT is fighting an increasingly uphill battle. To wit, the “tectonic market shifts” we warned of last week are only worsening – as yet again, interest rates are surging despite across the board economic weakness (notwithstanding this morning’s comical “housing starts” surge – in direct contradiction to yesterday’s home building sentiment plunge; collapsing lumber prices; and oh yeah, the time-honored, home building-destroying impact of rising rates). Moreover, the dollar is surging anew, yielding plunging currencies – and surging inflation – the world round. And given what we learned last night from Zero Hedge – ironically, a day after I castigated them for shoddy Precious Metal reporting – the “sum of all fears” we have warned of may well be unfolding.

Which is, this amazing analysis of the recent Treasury International Capital, or TIC reports – in which it’s pretty hard to dispute that not only was China the “mysterious U.S. Treasury buyer” in early 2014 (likely, doing the Fed a “favor,” given it’s purporting to be “tapering”); but that today, China is decidedly a major Treasury seller. This is what I have suspected – and written of – for months; as frankly, there is NO WAY Treasury yields could be rising given the across the board collapse of global economic data (and “most unequivocally dovish Fed statements in memory“), unless a major bond seller like the Chinese was involved.

Assuming this extremely logical analysis is even remotely close to the truth, this is the worst imaginable news for the horrifically indebted U.S. government; as well as an historically indebted planet that bases so many of its interest rates on the “benchmark” U.S. Treasury market. Which is why today’s supposed “eight year high” in housing starts is that much more laughable; as not only are mortgage applications already at multi-year lows, but with rates rising even marginally, mortgage activity will likely implode into oblivion. And thus, with U.S. home ownership already at 30-years lows, amidst not only a supposed six-year economic “recovery,” but multi-century interest rate lows, the potential for a new, economy-destroying housing collapse is extremely high. And this, with the Fed’s balance sheet – “tapering” and all – sitting at its all-time high level of toxic bond infestation. Worse yet, with home rental rates at all-time highs, the resulting surge in new renters could, ironically, cause rents to surge so strongly, the overall cost of housing may not even decline! Putting an exclamation point on this terrifying topic – ironically, coinciding with essentially every house in the Denver area having its property taxes raised 15%-30% – is perhaps the most ominous chart I have ever seen, depicting what happened the last time housing starts surged so strongly, in June 2008.

Which brings me to today’s featured topic, of how decades of market manipulation, academic brainwashing, and a marked decline in intellectual curiosity – ironically, amidst an all-time accumulation of student debt – has created an army of robotic “Keynesian youth.” Just as America’s entrepreneurship was destroyed by two decades of stock and real estate bubbles, its educational system has been racked by the poisonous monetary and economic policies that fostered them. Yes, there are young people out there that get it – like Elijah Johnson, for example. However, such “anomalies” are few and far between; and with each passing day, the society portrayed in “Atlas Shrugged” becomes more and more lifelike. And of course, we all know how that ended.

To wit, even I was appalled after watching this hideous segment on CNBC (who else?), celebrating the winners of the 2015 “National Economic Challenge, sponsored by the “Council for Economic Education (has a name ever sounded more Atlas Shrugged inspired?). Frankly, even the government’s head television-based economic propagandist, CNBC’s Steve Liesman, sounded a bit uncomfortable at the answers to his ridiculous question, “who is your favorite economist?”

Nat’l Economics Challenge participant #1: Keynes. I just love Keynes.  

Nat’l Economics Challenge participant #2: I do too, because he spends a lot of money.

Yes, these were the responses of the winners of a challenging featuring 10,500 of America’s advanced students – espousing that the best way to optimize an economy is to print, borrow, and spend money until peak debt is reached; mal-investment maximized; and under a fiat currency regime, hyperinflation achieved. In other words, taking the short-term “easy way out” – which in the long-term, always ends horribly. And all these 10,500 high school and college students had to do to figure this out was read books – instead of the propaganda spewed by Wall Street, Washington, and the Mainstream Media.

What scares me most about this group idiocy – which taxpayers will ultimately be asked to “bail out” when the historic student debt bubble bursts – is we’re approaching a time where the vast majority of “market participants” have not a clue how basic economics work; not to mention, freely-traded markets. And as for monetary policy, I’d bet not 1% of said 10,500 participants – or 5% of traders, analysts, and bankers under 40 years of age, have any idea how destructive, and guaranteed to implode, fiat currency regimes are. In other words, the ultimate “deformation” – of human minds!

Back in the 1980s, Whitney Houston was immortalized for singing “I believe the children are our future” – although few realize it was actually George Benson that first wrote and recorded the song, a decade earlier. For that matter, I’d bet few music aficionados realize George Benson is one of the greatest guitarists of all time, certainly in the jazz realm. Anyhow, in watching the above video, celebrating such horrifyingly misguided youth, it nearly brought a tear to my eye. Here at the Miles Franklin Blog, we do everything we can to educate as many people of the ugly reality that’s approaching – and hopefully, you too will help spread the words of TRUTH. In time – likely, after the deluge – a new crop of intelligent, anti-Keynesian youth will arise to navigate us through extremely troubled waters. But for now, if these children are our future, our only advice is to run - and protect your assets as quickly as possible!

Here come the TRUTH BOMB(s)!

A few months back I theorized the rest of the world led by a Chinese/Russian alliance might let loose with a “truth bomb” or a series of them.  It is clear the U.S. has been on a pathway in the desire to start a war.  We have pressed in Syria and the Ukraine but so far to no avail.  From the standpoint of the U.S., it is my opinion that a war is “necessary” to point at and blame for the financial collapse surely coming because in no way can “policy” be blamed.

The upcoming month of June will be a telling one as the situation in Greece comes to possibly a final head.  Tiny Greece is important for several reasons.  The first and most obvious, they are certainly a firing pin for the derivatives market.  Should they default, what will it be called?  Somehow, some way, a Greek default cannot be classified as one because a cascade of failures will immediately follow.  Financially, Greece can take the Western financial system down all on its own.

Next, Greece is also a member of NATO, what will they do when the current economic and financial sanctions on Russia run out?  Will they vote to extend the sanctions or vote in their own interest against them?   Or, will they accept financial help and the cash flow from the proposed natural gas pipeline?  A lesser question is what will happen to their EU status?  Will they quit, get kicked out or remain as a black sheep in a dirty family?

I ask these questions again because Greece now says they will run out of money on June 5th.  They have already pilfered pension funds and sequestered local agency monies, while pleading for the previously pledged but so far withheld aid.  Atop this and more important are the sanctions on Russia due to end also in June.  June is a very pivotal month!

To this point, the Chinese and Russians have been patient but firm dealing with the U.S..  Russia has warned about arming western Ukraine and placing firepower on Russia’s borders.  China has sternly warned the U.S. regarding the disputed islands in the South Sea, a near spark incident was avoided last week.  My point is this, the U.S. has been pushing while Russia and China have stood their ground.  How long this can go on without some sort of “accident” morphing into conflict is questionable.  As an example are the recent events surrounding the Spratly islands in the South China Sea , can the U.S. really push China in their own back yard?    China and Russia are fully aware of the U.S. falling further and further into a weakened position in many ways, time is running out before a financial collapse and they know a wounded animal often strikes in desperation.  They must in my opinion do something very soon to neutralize the U.S. or face the reality of fighting.

As I began with, I believe the only form of neutralization is some sort of “truth bomb” or a series of them.  How best can this be done?  I believe it must and will be done “financially”, let me explain.  If the ROW can neuter the U.S. financially, they will seriously hamper U.S. efforts to make war.  As a side note, “the truth” will also take most all public support away for making war.  I believe the process may have begun this past week.

While you may react with “oh it’s just propaganda” because of the source, Pravda posted an article over the weekend speculating China will very soon announce their gold reserves.  The article speculates China has amassed 30,000 tons of gold.  This may or may not be true, but I can easily prove 10,000 tons just on the back of a napkin.  Whether the number is 10,000, 30,000, more or somewhere in between is moot in my opinion because it is MORE than the U.S. “claims” to have.  It would also call into question “where” exactly all of this gold came from.  As I have written before, China need not ask for an “audit” of Western gold, should they provide audited numbers; market participants will make the connection themselves.

I believe there are several questions needing to be asked.  Is this a “30,000 ton bluff” by Russia?  I don’t think so but if it is, what is the upside?  Would Russia really throw this figure out publicly without clearing it with Beijing?  Would China really bluff about how much gold they have?  My opinion is no, they would not.  I have said all along I believed China would announce their holdings probably this year.  If this is the “pre pre announcement”, it is a very big number and one I believe only as an opening salvo.  Should China themselves make this announcement, please understand the “golden nuclear bomb” this would actually be.  The financial system of the West will be destroyed overnight!

Before going any further, let me put a few of the various dots on the table.  First and maybe what they were waiting for, the Western credit markets have had two very big convulsions in the last 10 days, these flash crashes have occurred as nearly all liquidity was briefly lost.  While speaking of liquidity, this seems to be drying up across the board including the equity markets as volume has gone comatose.  U.S. economic numbers are unmistakably weak and recession will be known by the end of June or early July.  Another classic sign of illiquidity is the shortage of collateral available to the shadow banking systems in both the U.S. and in Europe.  A “margin call” to a system undercapitalized and under collateralized is a deadly recipe.

We also saw a story last week where several of the larger ETF’s have contracted for rather large credit lines to use in a “market event” causing mass liquidations.  This is an entire story in itself and a humorous one at that!  What makes the ETF’s believe their financial institution will be left standing and able to lend during a panic?  And even if standing, during bad times the old saying goes …”credit lines are made to be pulled”!  Worst of all, if they actually do use the credit lines because their various investments cannot be sold, won’t this ultimately injure remaining shareholders and make those who panicked first …the best?  And especially if their investments do not immediately snap back, they will be required to sell more and at lower prices just to pay the loans (if they get them) down!  Very poor “preparations” if you ask me.

Other dots include, the AIIB, an alternative clearing system to SWIFT, currency hubs all over the world, physical metals exchanges and even the ABX which plans to arbitrage between Eastern and Western markets.  China has very rapidly recreated the “old silk road” trading route which includes both Iran and Greece, both sticking points in the side of the West.

I believe the Sino/Ruso alliance now sees weaknesses in the West, it is exactly what Sun Tzu would look for.   The economy is slowing, liquidity is drying up and leverage is maxed out.  Volatility has now struck the all-important credit markets of which are relied on to support the West’s way of life.  What is next?  I believe an announcement of China’s holdings will only be the beginning and put the U.S. on her heels as to our holdings.  Next, and I mentioned this previously, I would not be shocked if Edward Snowden has done a data dump similar to what was feared with Mr. Assange of Wikileaks.

We already know of so many and various “dirty deals” which banks have pleaded guilty to, “proof” of Western deceit will be believed because of all the fines and “non” admissions of guilt already paid and entered.  In essence, it very well may be the East pulls the curtain back on the Wizard of OZ!  A data dump by the Russians and Chinese regarding the finances of the West (including a lack of gold), how markets are rigged and economic numbers “created”, along with information regarding various false flags and the misdirection of the public would go a long way.  The “questions” are numerous and may have a starting date of 9/10/01 when Donald Rumsfeld announced the Pentagon’s “missing” $2.3 trillion …which was never spoken of again after the following horrific day.

Much, if not everything has a paper trail to it.  Enron’s misdeeds and hollow derivatives were conveniently washed away the following day as well as any paper trail to the “world bonds” issued during the Reagan years …and cashed in within the two weeks following 911.  Nearly everything since then still has a paper trail attached to it, should Russia/China have the ability to expose and prove some of it, our financial system will be toast!

In the event of a little sunlight touching Western “dirties”, currencies and bonds will be smoked along with of course the precious Dow Jones.  An exposure would effectively cripple us financially, torpedo public support and effectively make it very difficult for the U.S. to run around the world further swinging a bat and stirring up war.  In essence, an exposure would take the ability to point blame elsewhere off the table …and the past policy itself will finally eat the blame it deserves!

THE DEATH OF GOLD

It’s Monday morning; and despite every “cap” and “attack” algorithm imaginable, gold has rallied more than $50/oz in the past week, and silver nearly $1.50/oz.  That said, even Zero Hedge, by far the world’s best alternative news outlet, cannot get past its eternal “blind spot” towards the most blatant, world-destroying manipulation of all.  To wit, it posts dozens – if not hundreds – of articles discussing every market “intervention” but Precious Metals; despite dramatic evidence proving such, including countless admissions spanning not just years, but decades.  Consequently, I wasn’t surprised to see its mindless headline this morning, of “gold jumps despite stronger dollar.”  I mean, my god, the gold price has had essentially ZERO correlation with the dollar index for the past decade – as it rightfully shouldn’t, given that the “dollar index” simply refers to the dollar/Euro and dollar/Yen exchange rates.  In last year’s “if a nuclear bomb destroyed Europe,” I discussed how it matters not how the dollar performs against other fiat trash – but to the contrary, how it stands up against real items of value like gold and silver – over the long-term.  And yet, Zero Hedge still succumbs to the propagandists’ #1 gold myth!

To that end, the ECB and BOJ – issuers of the two largest currencies in the dollar index – are amidst the most maniacal money printing schemes of all time; which is probably why Yen-priced gold is at nearly an all-time high, and Euro gold not far behind. In fact, in the vaunted “BRICS” – where more than 40% of the world’s population resides – gold prices, on average, are just 5% below the all-time highs established between 2011 and 2013. That is, except China, due to the PBOC’s suicidal pegging of the Yuan to the dollar. Eventually, as we have discussed ad nauseum, said peg must be broken – yielding exploding Chinese, and worldwide, gold prices. To wit, if the peg is broken without China simultaneously disclosing its massive gold holdings, the Yuan will plunge, yielding skyrocketing Yuan-priced gold. Conversely, if China simultaneously announces its gold holdings, prices will likely rise parabolically – as the entire world realizes gold is no longer the “speculative investment” it has been propagandized to be for four-plus decades; but instead, the real money it’s represented for thousands of years.

 

That said, Zero Hedge not only consistently misses the giant pink elephant that is Precious Metals suppression, but the fact that the dollar is decidedly NOT strengthening! I mean, yes, the dollar index is up a measly 0.5% this morning. However, in the past month – despite an imminent “Grexit“; expanding Abenomics; and a spate of similarly “dollar positive” news flow, the dollar index has plunged 7%, to levels not seen since January. And thus, the international gold bull market depicted above remained in a holding pattern, even as “dollar-priced gold” has crept higher. Clearly, the Cartel is laboring under the pressure of a collapsing global economy, exploding worldwide money printing, surging international gold demand, plunging COMEX inventories, and the rapidly spreading realization that “peak gold” is upon us.

Not to mention, the ominous storm cloud hanging above the entire world; i.e., the massive, exponentially growing mountain of debt now estimated to exceed $200 trillion. Which, by the way, incorporates only the amount visible to investors – excluding “off balance sheet” debt (like the $5 trillion owed by nationalized entities like Fannie Mae and Freddie Mac); “unfunded liabilities,” such as pensions, social security, and Medicare requirements. And of course, countless trillions of over the counter derivatives; “shadow banking” liabilities; “peer to peer” loans; and who knows what else.

As the Toronto Global and Mail put it this weekend, said “global debt binge casts a shadow over the fragile recovery”; getting it 100% correct, other than the silly notion of a “recovery” that only exists in Washington, Wall Street, and MSM propaganda. And frankly, “binge” doesn’t do justice to the worldwide financial hell Central banks have wrought since the unprecedented fiat Ponzi scheme launched in 1971 broke in 2008 – as sovereigndebt alone (again, the “on balance sheet” portion only) has skyrocketed by 76% since; whilst total worldwide debt/GDP has surged from 269% to 286%. And don’t forget that in recent years, nearly all countries, the U.S. included, have “adjusted” GDP calculations higher to prevent this ratio from rising – by including all manner of non-productive investments, “intangibles,” and illegal, non-tax generating “businesses.” On an absolute basis, I wrote of the incredible $57 trillion of global debt incurred since the 2008 crisis in February’s “inevitable global sovereign debt collapse“; and now that mainstream publications like the Globe and Mail are writing of it as well, it’s just a matter of time before the entire world realizes we are headed for the largest, most comprehensive debt default – or hyperinflation – in global history.

As for the “tectonic market shifts” I warned of last week, this morning’s renewed Treasury bond plunge – the third such episode in two weeks – highlights how precariously the aforementioned, unprecedented debt edifice sits, as even the slightest rate increase will destroy the global economy like a nuclear bomb. Predictably, 99% of the financial community – and for that matter, Westerners in general – has not a clue what’s coming, as demonstrated by the fact that yet again, every single economic data release this week is predicted to improve. To that end, they’re already “0 for 1″ – as the massively upwardly-biased National Association of Homebuilders’ “Housing Market Index” not only didn’t rise as expected, but instead plunged. And this, just two days ahead of publication of the April 29th FOMC meeting “minutes” (likely to be doctored to account for current market conditions); and four days before Whirlybird Janet gives a heavily scrutinized speech on the Fed’s present “economic outlook.”

OK, now on to more “fun” topics; like the king of financial propaganda, the Economist, yet again making a call that in hindsight, will be as unequivocally wrong as its “drowning in oil” article of March 1999 – in which it claimed oil would fall from its then price of $10/bbl to $5/bbl over the “long-term.” Instead, it nearly bottom-ticked the oil bear market to the week, before it surged 15-fold over the ensuing nine years. Trust me, I know the story well – having been an oilfield service equity analyst at the time, suffering through the same misery I have endured as a Precious Metal advocate since 2011.

Now, let’s fast forward to Sunday, December 1st, 2014 – the day after ”Lady Macbeth” Thomas Jordan of the Swiss National Bank successfully duped the Swiss people into rejecting the “Save our Swiss Gold” referendum. That night, gold and silver prices were smashed to $1,140/oz and $14.10/oz, respectively – prompting MSM ringleader Yahoo! Finance to on Monday herald the end of the gold “super-cycle,” just hours before PM prices surged, ending the day at $1,205/oz and $16.50/oz, respectively.  However, at least Yahoo! had the common sense to shut up afterwards – as opposed to the Economist, which two weeks ago, with gold and silver trading at $1,165/oz and $15.90/oz, respectively, posted an article even more devoid of logic than 1999’s “drowning in oil.” In their view, gold prices were, for all intents and purposes, permanently “buried.”

Unlike “drowning in oil,” gold’s “burial” story was not on featured on the front page. However, the Economist went out of its way to find a photo “representative” of gold’s death; and in true propagandist form, this is what they came up with – with an equally depressing by-line suggesting “an ever more marginal existence.” Which it certainly has been for gold miners – and likely will be even after prices surge, when worldwide governments nationalize everything in sight.

That said, the premises of the article are so outlandish, it’s hard to even think about such lunacy without laughing – let alone, to write about it. To wit, not a single point made has even the remotest link to reality – from a supply, demand, economic, demographic, cultural, or monetary perspective. Which is why, thankfully, I don’t need to personally take this propagandist drivel apart point-by point – but instead, can point you to Pater Tenebrarum‘s dissection of it in his aptly titled article, “a proven contrary indicator.” Which, frankly, is EXACTLY what I expect this article to represent – as if the Economist innately seeks to maximize its humiliation.

This weekend, someone posted a comment on the Miles Franklin Blog’s investor forum that “we all know manipulation is going on. But if it can’t be stopped, why worry about it?” Why? Because such manipulation not only can, but always has been stopped; and in this case, it’s not just gold and silver prices that are way out of whack, but all financial markets. Inevitably – and perhaps, imminently – the mirage portrayed by the bastardized progeny of unprecedented global money printing, market manipulation, and – as depicted by the aforementioned Economist article – propaganda, will be destroyed in epic fashion. And when it is, only those who were wise enough to see through it – and prepare for what’s coming – will be in a position to financially survive; let alone, thrive.

Hopefully, you will be one of the lucky few that joins the “new 1%” of the coming monetary age. And also, they you recognize that the road to such “utopia” will be extremely scary. Remember, gold and silver are not “investments” held with hopes of “appreciation”; but to the contrary, the only time-honored methods of shielding your savings, and insuring them from political, economic, and financial cataclysm. Miles Franklin has been selling such protection for decades – and would be honored to have the opportunity to earn your business.

This is HOW People Will Lose EVERYTHING — Bill Holter

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LIES, COLLAPSE, AND THE RETURN OF PRECIOUS METALS

Of all the moronic excuses I’ve heard in a 26-year Wall Street career – including seven as a sell-side equity analyst – this morning’s” management comments” from one the most hideous “hot IPOs” of today’s historic tech bubble, King.com, takes the cake. King, which produces free, mindless online games like “Candy Crush” blamed a variety of miscellaneous issues for the fact that its 15 minutes of fame are over – from foreign exchange losses (Really? Are they honestly trying to portray themselves as a multi-national firm?); to a lack of new product releases (quite the ugly admission from a company that went public last summer); to – get this – expected “seasonally softer” sales in the “mid-year period.”

For a second, let’s forget that if King.com truly has a “seasonally soft” period, it should have disclosed it to investors when it went public – a measly 12 months ago. To wit, when I worked on IPOs as an oilfield service equity analyst at Salomon Smith Barney – creating earnings models and invariably bullish “initiation reports” (our investment bankers wouldn’t “allow” anything else, and potential clients wouldn’t hire us if said bankers didn’t “promise” buy ratings), my research team grilled management about every aspect of their business. Of course, compared to the halcyon days of the late 1990s and early 2000s – when Wall Street fraud was generally limited to the relatively benign sphere of conflict of interest (think Jack Grubman), today’s “research” efforts are far sloppier, with far less attention to rules, no matter how flimsy such rules might be.

After all, Wall Street has commandeered the government; and care of the PPT, no matter what lipstick-covered pigs they take public, they typically do well. That is, until their seedy underbellies starts to show – be it parasitic brain cell destroyers like Twitter; boiler room, pump-and-dump scams like “The Grilled Cheese Truck“; dying, bottom of the barrel fast food chains like “El Pollo Loco“; or highly commoditized, zero value-added societal drains like King.com. Anyhow, the fact that King’s management actually published such drivel in its earnings report shows just how close to Satan’s Lair Wall Street has descended; in KING’s case, as advised by underwriters” such as…drum roll please…JP Morgan and Bank of America.

Why did I start today’s article – written, by the way, after Friday’s market close? To show you that nearly everything Wall Street says is, if not an outright lie, heavily biased toward their own, selfish interests. As are essentially all emissions of the other two legs of the “evil tripod” – of Wall Street, Washington, and the Mainstream Media. The first of these “triplets of terror” will do anything to be elected, while the second would sell their mother’s souls for profit. As for the latter, they care not a whit about truth – but instead, ratings. Hence, the first part of today’s tripartite title – lies.

Putting these three satanic forces together, let’s consider this week’s across-the-board, horrific economic data releases, as well as the “spin” put on them – while on the topic of putting lipstick on pigs. For example, consider yesterday’s miserable April retail sales growth, which came in at a big fat ZERO; which sadly, means the heavily propagandized “pent up demand” due to cold winter weather never materialized. More accurately, there never was any such demand. Moreover, if such a “seasonal component” to retail sales actually existed, it would have been picked up by the government’s myriad, overly optimistic”seasonal adjustments.” To wit, in today’s horrific world of Central bank fostered “peak debt; falling real wages; rising inflation; and the worst economy in generations, it doesn’t matter what “the weather” is; how much the Fed lowers rates; and how much the PPT gooses the stock market. People simply aren’t spending – in strip malls, online, or otherwise. Which is probably why 2014 witnessed the weakest holiday spending season since 2008; and why retail sales haven’t fallen this rapidly since…yep, you guessed it…2008.

Worse yet, not only is consumer spending plunging – which according to Wall Street, constitutes two-thirds of the U.S. economy; but like the BLS’ fraudulent “employment” numbers; the NAHB’s equally fraudulent “housing” statistics; and “Markit’s” upwardly biased, statistically insignificant “diffusion indices”; said numbers are inevitably revised lower. The March NFP headline is a perfect example – last week, revised from +126,000 to +85,000; which by the way, pales in comparison to the BLS’ annual “benchmark revisions” – which over the years, have erased hundreds of thousands of supposed “jobs”; or, for that matter, the equally large “downward revisions” ADP unveiled roughly three years ago. As for retail sales, even I was taken aback by this chart, demonstrating how an incredible 20% of initially reported retail sales over the past five years have been subsequently revised away. In other words, as I postulated last year, “all economic data are lies“; overstated at the least, and fraudulent at worst.

And then there’s “inflation” – right up there with “employment” at the top of the fraudulent data list; in this case, serially understated for myriad reasons, ranging from cheating senior citizens out of appropriate cost of living adjustments; enabling misleadingly low “discount rates” in corporate, municipal, and Federal cash flow projections; and of course, masking the virulent price inflation unfettered money printing relentlessly poisons the economy with. To that end, I’m still incredulous at how the BLS actually applied a negative deflator to its 1Q GDP report, enabling it (before upcoming, potentially significantly negative revisions) to be reported at +0.2%. Aside from the bottom of the 2008 crisis, the last time a negative deflator was used was 66 years ago; and as we all know, the cost of living – notwithstanding a brief, already reversing gasoline price decline – has never risen faster. To wit, essentially the entire Denver area was hit this week with 15%-35% property tax increases – irrespective of actual home price trends.

Anyhow, it was just yesterday when I said the following; regarding the utterly comical Producer Price Index released Wednesday – purporting consumer prices plunging by 0.4% in April.

“The U.S. government is so desperate to slow the “interest rate train” down, it actually reported – get this – an April PPI depicting the biggest monthly collapse in five years. Yes, even with average U.S. gasoline prices having risen by 4% during April – and by the way, another 4% in May; the BLS – already infamous for publishing the monthly NFP employment report – actually reported American’s cost of living declined by 0.4%, compared to expectations of a 0.2% rise.”

Well, it appears my math was a bit off – as I was simply looking at the unofficial “Gas Buddy” website; as opposed to the BLS’ official energy inflation algorithm, which depicted an average U.S. gasoline price increase in April of not 4%, but 7.9%. Yes, actual Americans, on average, paid 7.9% more for gasoline in April than March; again, according to the BLS’s own calculations. And yet, the number it used to calculate the April PPI was minus 4.7%! As I wrote in this week’s “final round of finance’s most momentous heavyweight battle,” the government will lie about anything and everything to preserve a dying status quo based on hyper-inflating fiat currency. That said, their “footprints” – like the gold Cartel’s – are as large as the Sasquatch. And thus, if you simply seek the truth – which fortunately, is always on display at the Miles Franklin Blog – you should have no trouble understanding the tragic direction the world is going; and consequently, how to protect yourself from it.

For that matter, let’s move on to today’s “trifecta” of hideous economic reports – including an “unexpected” decline in Industrial Production; a “less than expected” Empire State Manufacturing Index, depicting the lowest corporate spending outlook in 15 months; and last but not least, an utterly catastrophic plunge in consumer sentiment. Regarding the latter, the report revealed further evidence of what we have purported all along – including, in great detail on yesterday’s Audioblog, how plunging “weekly jobless claims” is the most misleading of all the government’s “island of lies” statistics. To wit, this incredibly damning chart; which, just as the weekly jobless claims plunge has eerily correlated with the collapsing labor participation rate, has also plunged with a nearly perfect negative correlation to the “worried about losing one’s job” subcategory. Which, you’re probably not surprised to hear, surged in April – “good weather” notwithstanding – to its highest level since…drum roll please…late 2008.

Of course, such “lies” and “collapse” are becoming standard practice worldwide – as are the manipulation of financial markets on a 24/7 basis, entirely with freshly printed money fiat toilet paper. I mean, the fact that Japan – where the Yen has collapsed, and consumer inflation is exploding – still uses a negative GDP deflator should tell you all you need to know. Or, for that matter, that it is now estimated that fraudulent accounting regulations allow trillions of non-performing Chinese corporate and municipal bonds to be held “off balance sheet”; which is probably why the PBOC last month issued a “trial balloon” regarding a soon-to-be launched monetization scheme, akin to the off balance sheet “swap agreements” the Fed still holds with countless insolvent European banks – enabling the Fed to print money without reporting it, by terming such transactions “swaps” instead of “loans.” And still, per my earlier comment regarding “Sasquatch-ian sized” footprints, the Fed’s balance sheet continues to surge to unprecedented levels.   As do all the world’s hyper-inflating Central banks – such as the ECB, which promised so much today.

That said, “markets” are starting to do strange things. Sure, global PPT initiatives are hyper-inflating stocks to unprecedented valuations – whilst underlying economic activity implodes beneath them (what could possibly go wrong?). Not to mention, unprecedented attempts to paint every imaginable market in a manner favorable to the terminally cancerous status quo – including a handful of politically-sensitive physical markets, like gold, silver, copper, and oil (which inevitably, will be steamrolled by the “unstoppable tsunami of reality.”) Moreover, the past two weeks’ “tectonic market shifts” indisputably portend disaster – as surging rates are causing Central banks, both overtly and covertly, to step up QE to unprecedented levels. Meanwhile, violently volatile currency markets – i.e., the “single most Precious Metal bullish factor imaginable” – are destroying global trade as powerfully as the massive supply/demand “deformation” caused by four decades of unfettered money printing. And not just in mining, manufacturing, industrial production, and infrastructure – but agriculture, where plunging prices of key foodstuffs like rice, corn, oats, soybeans, and wheat; acute water shortages in drought-riddled areas like California and Brazil; and the first farmland price declines in three decades, portend a “farming emergency” in the very near-term.

That said, despite the most violent, blatant Cartel activity I have witnessed in my 13 years in the sector (I’m celebrating my “anniversary” this week), gold and silver prices have significantly reversed to the upside. Oh, the “Sunday Night Sentiment“; “Cartel Herald“; and “2:15 AM EST” algorithms are as pervasive, and relentless, as ever. However, amidst soaring global PM demand – everywhere but the still-brainwashed U.S., that is; plunging inventories; the bleakest production outlook in decades; and oh yeah, explosive money printing, set to go parabolic in the coming months and years, the massive bottom formations created by years of suppression are starting to lift. As the aforementioned, terrifying economic and financial trends accelerate in the coming months – particularly in the United States of “Recovery,” which ultimately will yield the long-awaited “Yellen Reversal” – Precious Metals’ historic monetary power will return to the fore, just as they have with the collapse of every collapsed fiat currency. Let alone, today’s unprecedented catastrophe of all currencies having zero backing. Clearly, the tides are turning – and as the dying fiat regime moves through its death throes, the “Return of Precious Metals” will have the same impact on the status quo as the “Return of the Jedi” did on the political structure a long time ago, in a galaxy far, far away.

Audioblog #95 106 In A 50

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