Back in my oilfield service research days, from 1995-2005, I experienced a similarly demoralizing plunge in my sector’s fortune – when a “perfect storm” of temporary issues caused crude oil prices to briefly plunge below $10/bbl. Even though long-term fundamentals could not have been more bullish, the supposedly “brilliant” MSM publication, the Economist, published an article in March 1999 titled “Drowning in Oil” predicting long-term oil prices as low as $5/bbl. Back then, the MSM still had some actual journalists in its midst; but irrespective, was just as prone to humanity’s most enduring economic flaw – i.e., “selling low.” Consequently, the article nearly “bottom-ticked” the oil decline to the month – enroute to $150/bbl. nine years later.
Today, the MSM is not only bought and paid for but dumbed down so thoroughly, many articles are now published by the same algorithms that manipulate stocks (really they are). This is why, day after day, not only are some of the most foolish stories published on well-traveled financial websites, but in many cases are not even internally consistent.
Regarding the former, here’s what the king of “mainstream financial madness,” Yahoo! Finance, had to say yesterday morning, before gold surged from $1,150/oz. to $1,220/oz. Not to mention, ignoring the fact that gold is NOT your average “commodity” – which it proved in spades in early 2009, surging to a then all-time high of $1,000/oz., whilst crude oil plunged from $150/bbl. to $40/bbl., and the Dow Jones Propaganda Average from 14,000 to 7,000.
Better yet, here’s what once-respected Reuters wrote this morning – claiming equities, which are just marginally higher, are “taking heart” that oil rose yesterday – despite the fact that during the prior two days’ crude oil carnage, stocks in New York, Frankfurt and Tokyo were largely unchanged. Better yet, why would stocks be encouraged by higher oil prices – particularly a massive energy importer like Japan? Moreover, is a one-day “bounce” from $65/bbl. to $69/bbl., following a two-month plunge from $100/bbl., really a material event – particularly given that American, German and Japanese stocks are at or near multi-year (nominal) highs?
However, for the coup de grace, read the copy below the headline demonstrating the aforementioned lack of internal consistency. In the headline, it suggest stocks are up due to higher oil prices – whilst in the copy, it says stocks are up due to expectations of lower oil prices. And finally, I know it would be soooo difficult to recall a story that turns out to be incorrect, but as I look at my screen this morning, I see oil prices falling anew, and the dollar not only not “capped” but soaring – with currencies as diverse as the Euro, Yen, Real and Ruble plummeting. In other words, NEVER listen to anything written about financial markets by the MSM – which frankly may not even be people.
That said, some news items simply cannot be “spun,” no matter who’s publishing the article or how powerful the “extraneous” forces on them. Endlessly portraying U.S. “recovery,” for instance, when it quite obviously doesn’t exist, accomplishes nothing but lower readership and reduced credibility. In other words, as we have been writing ad nauseum, the “propaganda leg” of the “evil tripod” of money printing, market manipulation and propaganda long ago broke. In the U.S., this realization has been much more recent – while in the rest of the world, the MSM no longer even pretends economic activity is going anywhere but straight down.
Yesterday, for instance, the global manufacturing PMI index plunged to a 14-month low. Moreover, as it turns out, the “recovery” year of 2014 has quantitatively featured the worst U.S. macroeconomic data since 2008. Thank god for the PPT, Federal Reserve, ESF and gold Cartel – whose job is solely to manipulate markets to paint an alternative reality; albeit, one which only the “1%” experience at the expense of all else.
Nowhere was this dichotomy more evident than the unadulterated disaster this weekend’s “Black Friday” holiday sales turned out to be; down an astonishing 11% from a year ago – which in and of itself, was the weakest holiday shopping season since the post-crisis levels of 2009. And now, we learn this morning that “Cyber-Monday” sales were equally disastrous growing at less than half the expected rate. In other words, we were DEAD ON when we wrote “2008 is back, with one temporary exception.” Heck, even the MSM realizes the “recovery” it so desperately wants to believe in is in based on a foundation of quicksand – per Yahoo! Finance’s article this morning, titled “Dodgy Home Appraisals Making Comeback.”
Of course, nowhere is the rot America’s economy has become more evident than in its exploding debt levels, no matter what lies the government purports, such as “declining deficits.” The fact is every aspect of American society has been swamped by unpayable debts – as Federal, municipal, corporate and individual debt levels are all rising dramatically from record levels. This is why the Fed MUST maintain ZIRP and QE “to infinity” – either overtly or covertly – per the definitional parameter of a Ponzi scheme.
To that end, today’s article topic focuses on the Federal debt surpassing $18 trillion last week, despite the fact that it not only doesn’t include the $5+ trillion of debt held “off balance sheet” by nationalized housing zombies Fannie Mae and Freddie Mac, but eternally escalating “unfunded liabilities” estimated by some to be approaching $250 trillion. That said, $18 trillion is alarming enough, particularly as it only took seven years to double from the $9 trillion level outstanding at the peak of the 2007 housing bubble. And by the way, per the above government lie regarding deficit reduction, you can do the simple math yourself. Fiscal 2014 ended on September 30th with a national debt of $17.82 trillion. The debt surpassed $18.00 trillion on November 28th up an incredible $180 billion, just 59 days into Fiscal 2015. At that pace – which given plunging economic activity is all but given – Fiscal 2015 debt accumulation will be $1.11 trillion, or roughly the same increase as Fiscal 2014; when, by the way, the government claimed the “deficit” was just $483 billion! And speaking of “pace,” the below chart says it all – assuming no acceleration of the current rate of debt accumulation. And the scariest part of it all is that “if” the economy worsens or interest rates rise from record low levels, this chart could get significantly uglier. And thus, for those of you “on the fence” as to whether precious metals might we warranted at this potentially historic juncture in time – at historically suppressed prices, well below the cost of production, no less – what more need we say?
Speaking of precious metals, yesterday’s surge was undoubtedly catalyzed by the Cartel covering the massive, naked paper shorts it engaged in all month, in a desperate effort to prevent the “Save our Swiss Gold” referendum from passing. In the short-term, they got their way; but longer-term, have only put turbo jets on the global money printing machine – which is why, no doubt, global currencies are in freefall mode as I write. The funniest part of it is that even on such a “good” day for gold and silver, the Cartel was capping and attacking from the get-go, starting with Sunday night’s historic silver smash (the 76th Sunday Night Sentiment attack in the past 77 weeks); followed by the 2:00 PM EST “crybaby attack” that capped gold’s advance at exactly $50/oz. – “Cartel Herald” and all; silver’s ubiquitous 2% intraday decline from its highs; the instantaneous, “sixth sigma” paper PM raid the second the ultra-thinly traded “Globex” market opened at 6:00 PM EST; the 340th “2:15 AM” raid of the past 386 trading days just as gold was about to breach Monday’s closing level (i.e., the DLITG, or “Don’t Let it Turn Green” algorithm); this morning’s massive, “out of leftfield” plunge at the NYSE open, for no other reason than to enforce the Cartel’s longest standing “rule” – i.e., “all great PM days must be followed by horrible ones”; and last but not least, two additional DLITG algorithms later in the morning.
Unfortunately for them, prices are surging anew as I write at 11:00 AM EST – as unlike paper markets like COMEX futures and the GLD ETF, the physical market is on fire. Not to mention, that given the aforementioned currency collapses, prices in numerous nations are at or near record high levels – like Japan, where Yen-priced gold is just 7% from its March 2013 all-time high. Evidence of surging global demand, for both metals, is everywhere; particularly in silver, which this far below the cost of production, is being hovered up wherever it can be found, yielding historic inventory drawdowns.
All one has to do is look at what the U.S. Mint did yesterday, in starting the month by selling an incredible 523,000 silver Eagles to realize just how ridiculous paper prices have become. Below, we have added the sum total of the world’s three largest transparently reported silver markets – i.e., India, the U.S. and Canada. And lo and behold, with all three projected to surpass 2013’s record demand levels, 2014 is on pace to be 8% higher than 2013. In fact, to demonstrate how rigged – and broken – the paper markets have become, cumulative physical U.S., Canadian and Indian demand (excluding other forms of unreported silver demand) is up a whopping 145% in the past two years, whilst the paper price is down 39%!
In other words, use your own judgment to determine if paper prices reflect reality – let alone, as global money printing explodes and precious metals supply sits on the cusp of an historic collapse. Even the “18 trillion and (rapidly) counting” U.S. national debt is dramatically under-reported; and thus, the more you listen to TRUTH tellers like the Miles Franklin Blog – as opposed to LIARS like those in Washington, Wall Street and the MSM – the better equipped you’ll be to PROTECT yourself from what’s coming. And hopefully, if you do decide to fight the printing presses with real money, you’ll give Miles Franklin the opportunity to earn your business.
Seeking a clarification on your India silver import chart:
Not sure about the source of the chart, whether you prepared it yourself or got from somewhere else (like Zerohedge?). But, doesn’t India import silver in the form of coins like Maple Leafs or Eagles? And if it’s true, adding up India silver imports + Silver Eagles + Maple Leafs would count India’s import of Maple Leafs + Silver Eagles twice?
All official data, from official Indian sources and the U.S. and Royal Canadian Mints.
No, they don’t import coins. They import bars, mostly from London.
The total demand figure for 2014 included 279 million ounces imported into India, 45 million ounces sold by the U.S. Mint, and 28 million ounces by the RC Mint. As for the latter, that’s just Eagles and Maples, as many other types of silver coins are sold, too.
Check this out from the SRSrocco Report today:
Great update, thanks.
Question – In years past when gasoline prices went up the American public was told that the prices in the stores, including food prices, had to rise because of more expensive transportation. Same thing with air transportation.
The local news in Oklahoma said tonight that we may well see gasoline in central Okahoma below $2.00 in the next 2 weeks. Gasoline today is $2.29 at some stations.
Does this mean that prices in the stores and for airline tickets will now decrease? If not, why not?
Possibly, but fuel costs are not the only costs airlines need to pass through. As the economy weakens, and air travel (load factors) decline, margins decline dramatically. And thus, many airlines will try to figure ways to recoup them, such as maintaining ticket prices. If they actually fall, I can’t even imagine how bad the world will be.
Word on the street is USA judge is likely to make decision on class actions within 2 weeks. If this is allowed to go to discovery we are in for a ride. Imagine the pressure that judge is facing……
Bill is it possible that India was the big buyer on Monday after the removal of gold import rules…
Here is the reasoning why I plan to continue to add more silver than gold to my holdings.