I’m absolutely on fire this morning as today’s extremely important topic – which I conceived earlier this week, has been loudly validated by today’s “market action.” Not to mention, our contention that TPTB have in fact instituted a covert “New York Gold Pool” to buy them a wee bit more time before the inevitable collapse of the fiat currency based monetary system that facilitates their power base. Or as it will one day be viewed historically, the financial equivalent of Custer’s Last Stand.
Yes, here’s the last three days of gold “trading” following Wednesday’s horrific GDP report – which is now expected to be revised dramatically lower; Friday’s punk NFP report – which exposed the horrifying state of the U.S. labor market for what it really is; this weekend’s significant Ukraine escalation – including Russia accusing the Ukrainian government of genocide; and yesterday’s market plunge – during which, oil, copper, platinum, and palladium all rose as the “dollar index” declined sharply to a new 16-month low. It’s quite amazing, isn’t it – how each day, “someone” didn’t want gold to trade above $1,315/oz. – pushing it down from this level each time with prototypical “Cartel Herald” algorithms, and subsequently “locking it down” at $1,310/oz.? Yes, “freely-traded” markets that is unless you read today’s New York Times – discussing the myriad banks being sued for “fixing” the gold price.
Before last Wednesday’s FOMC meeting, I wrote of why the so-called “pre-FOMC drift” has resulted, for more than a decade – in massive stock gains the day before Fed policy statements.
As for stocks, if the market were to sharply decline ahead of an FOMC statement day, the highly reactionary Fed would feel pressure to be more dovish in its comments than it would like to be; as opposed to a strong market environment, in which it feels comfortable spreading whatever lies it likes; such as, for instance, “taper talk.”
–Miles Franklin, April 29, 2014
Well, today and tomorrow, “Whirlybird Janet” is giving Congressional testimony regarding the state of the economy – as if last week’s FOMC statement wasn’t enough. And thus, we’ve witnessed the same maniacal effort to stabilize markets in front of it; as up until this morning’s “market miracle,” the trends in stocks, bonds, the dollar, commodities and gold were all going the wrong way – from TPTB’s point of view. In the U.S. alone, we learned that consumer spending is flat-lining and thus, not “recovering” from the winter’s “weather” issues. Also, labor costs rocketed 4.2% higher last month amidst a retail depression catalyzing dramatic guidance reductions at bellwether consumer discretionary staples like Whole Foods and General Nutrition. Let alone, the “perfect storm” of economic hell emanating from this MUST WATCH VIDEO in which the CEO of one of the nation’s largest restaurant chains says…
We have an inflation problem right now. The cost of food is going nuts. Back when I was public, and even still today, they’d ask me, what are you going to do about costs? And I’ve always said, have you ever seen a restaurant put a sign up saying going out of business due to high food costs? But right now today, everything – from a lime, to coffee, to shrimp, to beef – every single thing is hitting us at once. And labor – just right here in California, you’re putting in the new minimum wage, come July. Just me, and I have 70 or 80 restaurants in California, I have $3 million more of labor costs. I have no problem with raising the minimum wage; but in turn, customers can’t say, why are you raising prices? Everything is fair, but the consumer is going to notice – from going to the grocery store to going out for dinner, they are going to be paying more for a meal.
–CNBC, May 5, 2014
In other words, validating what we wrote in the “Most Important Reason to Own Precious Metals” – i.e., food inflation; “Taxation nation,” as the government is forced to increase taxes – both directly and indirectly – to provide for a rapidly expanding “poverty class” and “Californ-inflation,” of how the nation’s most financially-strapped, debt-laden, regulatory-burdened, drought-stricken state is making it more and more difficult for individuals to live and businesses to survive. Throw in additional, en pointe articles like this one highlighting how food companies continue to surreptitiously reduce packaged portions without simultaneously reducing prices, and one can see why said “perfect storm” is so close to leveling America – and with it, the entire world.
And speaking of the Dying States of America, how about this damning chart – validating what we wrote Monday in “Three Numbers: +288,000, +234,000, and -806,000” of how “birth/death model jobs” are purely fictitious given the horrific economic, financial and regulatory environment? Yes, we’re to believe millions of new, profitable companies are being started up each year despite a sharp decline in the number of firms less than a year old and oh yeah, a rising number of “dissolving” firms.
Taking the “horrible headlines parade” a step further, we learned overnight that Chinese corporate revenues are collapsing at their most rapid rate since the bottom of the 2008-09 financial crisis – validating exactly what we wrote in Monday’s “China Syndrome.” Subsequently, the Shanghai Stock Exchange plunged this morning toward the key round number of 2,000 that has been defended staunchly all year (chart below doesn’t reflect today’s 18- point decline, to 2,010).
However, “Chinese PPT” activity doesn’t hold a candle to the “Japanese PPT” – i.e., the BOJ – has protected Nikkei 14,000 which clearly, represents the last remaining “pillar” of its propaganda scheme to convince the world Abenomics has been a “success.” As you can see below, the Nikkei surged from multi-decade lows when Abe was elected in December 2012, under the promise of instituting Abenomics i.e., doubling the money supply in a two-year period to combat “deflation.” By the time it was enacted in April 2013, the Nikkei had nearly doubled as well but that was the high point, and since then, on no less than seven occasions, the BOJ has been forced to covertly protect it at 14,000 fearful that a significant breach would spread fear that Abenomics was a failure (which according to the utterly horrific economic data of recent months, is pretty much a fait accompli). The below chart doesn’t incorporate last night’s massive 3% plunge, to 14,033; and given all we have written on the topic – such as “The Japanese Noose is Tightening” – it’s only a matter of time before it inevitably breaks down. That is, if hyperinflation doesn’t hit Japan first in which case, investor losses will not be nominal, but real.
Which brings me to today’s massively important topic which as I write, is playing out exactly as reality would dictate. That is, that just as the BOJ is terrified of its “Abenomics” money printing scheme being “called out” by a plunging Nikkei, the Fed is terrified of its “tapering” – and thus, “recovery” – propaganda being “called out” by falling interest rates. Remember, we have vehemently maintained that the Fed has not tapered one iota to date (and in fact, proved otherwise). However, the dumbed down populace – and of course, a mindless MSM and conniving Wall Street have believed it thus far. That said if they stop believing tapering to be viable – as fears of economic collapse expand – it will be game over for “Yellenomics.” That said, let’s preface this section with what I wrote last week, just before Wednesday’s FOMC meeting – in reference to the aforementioned “pre-FOMC equity drift,” and other such market manipulations. And keep in mind, Yellen is giving economic testimony today at 10:00 AM to Congress, constituting a similar Cartel “key attack event.”
In many ways, Friday’s comical NFP report represented an inflection point in TPTB’s war against reality. It was inevitable they’d eventually overplay their psychotic game of money printing, market manipulation, and propaganda; and watching the Fed clearly attempting to push rates up may just well be the denouement of this suicidal exercise. To wit, they no doubt anticipated the benchmark 10-year Treasury yield to jump back to the middle of their “managed” 2.6%-3.0% range when the BLS published the “huge” 288,000 job number. However, once the market realized just how fabricated the data was – and how ugly the internals underlying it – rates instead plummeted; and by late afternoon, were on the verge of breaking below the seven month-low of 2.60%. Eventually, the Fed lost this game, as the “quintuple bottom” at 2.60% was broken, with rates this morning falling further, to 2.57%, and appearing likely to fall much lower.
–Miles Franklin, May 5, 2014
Next, take a look at the chart of the benchmark 10-year Treasury yield; i.e., the “world’s most important interest rate.” Uncanny how it looks exactly like the Nikkei, huh? Yes, shortly after QE3 was instituted in December 2012 – just as Abe was elected – the “tapering” propaganda scheme was launched; formalized when “Helicopter Ben” first discussed it in June 2013; coincidentally, just as Abenomics was launched in Japan. Just like the Nikkei, the 10-year Treasury yield nearly doubled stopping at exactly the 3.0% level that was the subject of our massively important January 10th article, “3.0% – Nuff’ Said.” Equally congruently, the Fed has clearly been forced to defend the 2.60% bottom of this range on seven occasions – or eight, including this week. As noted above, we have no doubt the Fed had hoped to “manage” a range of 2.6% – 3.0%; i.e., “not to hot” to stoke inflation and debt collapse fears and “not to cold” to stoke QE failure fears. And if today’s price action is any indication, the Fed may well be near the end of its reign of manipulation terror.
To wit, at exactly 10:00 AM EST, Yellen’s prepared remarks were released as always, stating absolutely nothing incremental – and most certainly, nothing different than what was published in last week’s FOMC policy statement. Gold, of course, was instantaneously smashed below the Cartel’s ten-month “line in the sand” at the key round number of $1,300/oz.; as always, so rapidly, even the world’s fastest HFT algorithms wouldn’t have had time to actually read them before reacting. And this, following the comically blatant waterfall decline at the 8:20 AM COMEX open in “preparation” for this planned drive-by paper shooting.
As noted above, it was painfully obvious the Fed assumed rates would rise from the bottom of their “managed” 2.6%-3.0% range upon release of the “massively bullish” NFP report Friday. But as you can see below – as this is a five-day chart, that gambit decidedly failed; when after digesting the report, the market realized the U.S. Labor Market has never been weaker. Subsequently, the 10-year yield fell below 2.60% on Monday, yesterday, and this morning with “someone” clearly propping it back up each time. And thus, without a doubt, the plan this morning was to “propagandize” Yellen’s comments as an endorsement for “recovery” and “tapering” – with massive doses of paper gold and Treasury shorting. As for the latter, whether the reason for falling rates has been secret Fed monetization – perhaps, via “Belgium” – or simply, actual market participants betting on further QE (given the obvious deterioration of the global economy) it has been happening. And trust us, if 2.60% is decidedly breached on the downside, it won’t be due to “deflation fears” (see the above food inflation comments) but instead, a widespread belief the Fed must support dying financial markets with “QE to Infinity,” amidst an unfolding, global economic catastrophe.
As for stocks, they are clearly not helping Whirlybird Janet’s propaganda. Yesterday, U.S. equities were slammed hard so the PPT went into action as soon as the thinly-traded U.S. “pre-market” session opened – as always. Last night, Asian stocks were slammed and European stocks were modestly lower when – voila! – for absolutely no reason in came the typical PPT surge that – as always – took both “Dow Jones Propaganda Average” and European stocks significantly higher. In our view, there is not a doubt European stocks are supported by algorithms directly tied to the U.S. PPT, “manipulation circle” that much wider. Comically, the “reason” cited for the equity surge – and, as always, a simultaneous paper gold plunge – were more Ukrainian “de-escalation” rumors as always, based on nothing material. Not to mention, the fact that gold is no higher today than when the crisis initially broke out two months ago – or the Dow, any lower.
Unfortunately for Janet and Company, stocks immediately plunged on the news but have no fear, 10:00 AM EST – the “convenient” release time of all such statements – is also PPT “POMO” time and voila! – the Dow immediately regained green status, even as the NASDAQ was still down 50 points. To that end, I have never in my 25 years of market-watching seen so many days where the NASDAQ is utterly crushed while the Dow is not; again, validating all we have written about the “strategic importance” of maintaining the façade of “recovery” via a strong Dow propaganda average.
As I write at 11:05 AM EST, the Dow is up 20 and the NASDAQ down 47; whilst gold is sitting just below $1,300/oz. and the 10-year yield trading at – get this – 2.59%. Trust us, these gold and Treasury levels are very, very important to TPTB; and frankly, I don’t think their odds of maintaining them are very good, especially as the gold prices is so far below the marginal cost of production and global PHYSICAL markets so tight. To wit, no matter how much they write of “Deflation” and “Recovery,” the fact remains that inflation and recession are the reality; likely, to be shortly usurped by hyperinflation and depression. And thus, you can bet your life that every legal and illegal method will be utilized to protect 2.60% to the downside and $1,300/oz. to the upside which in both cases, will likely fail miserably. That is, until the resulting QE increases foster “hyperinflation fears” at which points, “all bets are off.”
Hopefully, this very important article helps you realize just how dire the global financial situation has become and subsequently, how maniacal the efforts of TPTB to buy themselves a wee bit more time with historic levels of money printing, market manipulation and propaganda. To wit, it’s only a matter of time before the “New York Gold Pool” fails as miserably as the London Gold Pool and other similar manipulation schemes; and when it does, if you haven’t already protected your assets with real money, it will already be too late.
Andy, have you heard the latest Jim Willie interview with Greg Hunter USA watchdog? Jim has stated in the past from his London source. That the Chinese have been importing 1000tons of gold a month through London since April 2012! Holy “Au” batman! He states that would put them at 25k plus tons since that time frame alone! What are your thoughts on these figures? I know you guys @ mf don’t like to make predictions & base you writings in fact. But like Bill Holter has stated gold will rise when China can no longer accumulate from the west. They know the math, if what Willie states is true we can’t be that far off from the bottom of the wests golden barrel. I don’t see how they can continue at this pace. Too many swans! Keep up the good work!
Willie is brilliant; but as for his “sources,” ay curramba! I don’t need sources to know China is buying – and won’t EVER stop until there’s no more left to buy.
Excellent write up Andy. I am a huge fan of your work. Keep it up!
Great writing as usual. You cut through the propaganda with a knife. I am long gold and I am just amazed that it is still considered a contrarian position despite the raging fundementals.
Thanks for the articles.
Yep, only time in history it has been contrarian to own something in a bull market – even two years ago, before the Cartel attacks went berserk.