It’s another eerie day of market “management,” 24 hours before yet another “all-important” FOMC policy statement. No chart sums the “pre-FOMC smokescreen” better than the one below, which unfortunately I haven’t found an update of since it was initially published two years ago. However, I did the math myself, calculating that an additional 68 S&P 500 points – averaging 0.3% per trading day – have been added in the days prior to the 18 FOMC meeting announcements in 2012, 2013 and 2014. In other words, since the PPT – i.e., the “President’s Working Group on Financial Markets,” started working 24/7, by my observation following 9/11, nearly all of the S&P’s cumulative gains have occurred the day before FOMC policy statements. Such a statistical aberration is easily “sixth sigma” in nature, attesting to the level of “strategic importance” TPTB place in Fed misinformation.
As you can see, pre-FOMC trading days accounted for all the S&P’s gains from 2000 through 2011. Since then, the effect has been slightly muted – as equities have been “turbo-inflated” by the effects of QE3 on a nearly daily basis. Nevertheless, there is a nearly 100% certainty that stocks will rise the day before an FOMC policy statement, as the PPT “primes” the Fed with as much “jawboning” leeway as possible.
In other words, all markets are managed to enable Bernanke, Yellen et al to have as much “freedom of speech” as possible. If interest rates spike too high, for instance, the Fed cannot blithely speak of “tapering,” lest it trigger stop loss selling above key technical levels. Hence, our must read article from earlier this year, “3.0% – Nuff’ Said” which, among other things, describes how the prevailing 10-year Treasury yield influences the “fudge factors” utilized in the monthly NFP employment propaganda. 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 that 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.” This, of course, is why yesterday’s 70-point intraday NASDAQ decline – following a 73-point drop on Friday – couldn’t be tolerated, especially with the PPT’s “line in the sand” at NASDAQ 4,000 in danger. This is why it was miraculously “Hail Mary’d” late in the day…
…utilizing yet another Ukraine “de-escalation” rumor as cover, as if the Ukrainian crisis has had any material impact on stocks thus far…
Russian troops returned to base from Ukraine border: IFX
…this, of course, was already refuted by this morning…
NATO has seen no sign that tens of thousands of Russian troops are withdrawing from close to the Ukraine border, a NATO official said today, despite a Russian statement that the troops had returned to their permanent positions.
–Reuters, April 29, 2014
Precious Metals, of course, were raided at all “key attack times” from the second thinly-traded paper platforms opened Sunday night; although as I write at 11:00 AM EST, gold has rebounded from its 212th “2:15 AM” EST raid in the past 239 days surging back to the Cartel’s $1,300/oz. “line in the sand” which in recent weeks, has been as staunchly defended – with blatant naked shorting – as “battlefield $20 silver.” Of course, at exactly the 10:00 AM EST close of the global physical markets, it was stopped cold with a prototypical “Cartel Herald” algorithm; ironically, just as a miserable, PM-bullish consumer confidence report was released.
Yes, I know; it’s exhausting getting through said “key attack events” – like tomorrow’s FOMC policy statement and Friday’s NFP employment report. However, as gold and silver are not “investments,” but savings, I spend little time worrying. Conversely, my goal is to acquire as many ounces as possible before the “big one” hits which frankly, could be any day the way the world is going. And when it does, it matters not whether you pay $1,250, $1,300, or $1,350 for something that will ultimately be deemed priceless. To that end, we assure you it will as it always has throughout history, on all 599 occasions when “economic mother nature” was challenged with fiat currency regimes. The only question that remains, of course, is when; which based on the current parabolic growth of debt of all kinds, can’t be too far away.
Which brings me to today’s topic, i.e., the simple math that makes it impossible for the current monetary system to survive. Not that the Fed-created debt edifice could ever be paid off anyway but now that the collapsing economy has caused labor participation to fall to 35-year lows and real wages to 40-year lows; while Obamacare is on the verge of taking the phrase “employer-sponsored health insurance” out of the national lexicon, the national debt load will worsen dramatically as socialism takes over. Already, our “taxation nation” is overwhelming us but shortly, it will be just as bad as in Canada and Europe, where the Federal rate alone is a minimum 50%.
This is exactly why Europe’s already doomed economy has not a chance of survival in its current form – no matter how much money Draghi promises to print. Per this shocking article, just 7% of the world’s population lives in Europe, accounting for 25% of global GDP. Yet, care of its onerous, economy-destroying socialism, it spends 50% of the world’s welfare dollars. Which, by the way, appears to work well during “good times” but per below, not so much in bad times – which is where we stand now, and we’ll be for the foreseeable future. In other words, it’s like mortgaging your house with a 99% mortgage; as just the slightest reduction in income puts you at risk of default. Which by the way is exactly what Europe will shortly be doing?
As for the United States of Depression, the same math holds true as the more the government needs to fund socialistic endeavors, the worse the economy becomes – and the more bankrupt. Not that socialism is the only reason debt is rising; as we can’t forget military spending, student loan guarantees, bailouts, “pork barrel” projects, irreversible trade deficits, and – of course – corruption. However, per below, it’s no coincidence there’s a 90% correlation between Food Stamps enrollment and national debt over the past four decades. I have no doubt other entitlement programs have seen similar growth in recent years – particularly in light of the lax regulation our gargantuan bureaucracy has provided. And now that the “baby boomers” are reaching prime entitlement age, amidst a horrific demographic situation that will dramatically worsen in the coming years, you don’t need to be a rocket scientist to guess what this chart will look like in the future. And oh yeah, what happens if the Fed can’t continue to hold interest rates at all-time lows, amidst surging debt, recession, and inflation?
As you can see, today’s premise was as simple to explain as it comes; i.e., elementary math depicts how guaranteed the dollar’s demise has become. Not to mention, the currencies of all major nations – which all share the same economic, financial, and demographic horrors. There is not a chance in hell – mathematically – of any other outcome; and when TPTB can no longer mask this reality with unprecedented levels of money printing, market manipulation, and propaganda, the “world as we have known it” will permanently pass to be replaced by a hyperinflationary environment in which only those holding real money will financially survive – and likely, thrive.
Thanks Andy your reasoning makes total sense, I seen a video put out that shows the above ground stock of silver is less than that of gold because silver has been used up and gold has not, If true this is even more reason in my mind to own a larger percentage in silver over gold, Thanks for all hard work, Mark C
Yes, there are no more than 2 billion above ground ounces left on the planet – and most are in VAULTS like our Brink’s vault in Canada, never to see the light of day. The tight silver market is the Cartel’s “Achilles Heel,” which is why they fight it so hard with naked shorting. We have already had shortages – in 2008, 2011, and 2013 – and this year, the US Mint is rationing.
I’m still having trouble convincing my wife/extended that acquiring PMs is not ‘spending money’ but, saving and getting real money.
Any tips? You must have had a similar experience with your family members? How did you get through it?
In /family-friends-and-colleagues, I wrote of how it’s just not worth trying to convince them. Most have no interest in truth.
If you had saved 10k in fiat dollars in 1999, today it would be worth about a thrid that due to inflation, and had you bought in $3 silver worth 10k at that time, you’d have 3,333 oz. of silver in todays money. 3,333oz in todays money is ~66 thousand dollars. Its a no brainer. You may not see those gains anytime soon, but the principle remains, over time fiat currency is a losing gamble.
Hope that helps.