In my January 31st RANT, “SUNDAY NIGHT SENTIMENT,” I wrote of the Cartel’s decade-long penchant for attacking PAPER Precious Metals in the thinly-traded Sunday night markets; i.e., when only Hong Kong – or even Sydney – have available trading platforms.
Call it a curse or blessing, but Precious Metals trade 24/5 – plus – care of electronic trading platforms, subject to heavy intervention. Consequently, PM’s are typically lower 90% of the time after the NYSE closes, for example. Other markets also trade overnight, such as currencies and crude oil. However, they rarely have material moves in the wee hours; as no one MANIPULATES them with the same intensity.
I have long noted TPTB’s last remaining “weapons” of MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA; cumulatively, utilized to affect popular PERCEPTION; i.e., sentiment.
Moreover, given the tiny size of the global PM community, it doesn’t take much to dissipate bullishness; particularly given the constant attacks, smashes, and WATERFALL DECLINES characterizing the market; let alone, the relentless stream of fear-mongering – both inside and outside the PM community; and, most importantly, the tendency of PM believers to avoid PHYSICAL bullion in lieu of highly speculative “PAPER PM Investments” like ETFs and mining shares.
The most notorious “SENTIMENT” attack was the May 1st, 2011 “SUNDAY NIGHT PAPER SILVER MASSACRE”, per below. As silver approached its “ultimate triple-top breakout” at $50/oz, industry supply SOLD OUT, yielding genuine Cartel fear of a monetary meltdown.
Thus, with the Chinese market CLOSED for a holiday, and only the thinly-traded Sydney platform open, they attacked silver for $6/oz in roughly 12 minutes; stooping so low as to use the “bin Laden killed card” as cover to “double down” when silver attempted to recoup its losses (as if bin Laden had anything to do with silver)…
Aside from such dramatic, “blitzkrieg” attacks, PMs are always “capped” on Sunday nights during upcycle periods – as we saw from mid-August through the “QE3” announcement in mid-September – and ATTACKED during (Cartel-engineered) downcycles.
Consequently, I do as much manipulation analysis on the upside as the downside. Only after reviewing both sets of data does it become clear just how pervasive the Cartel’s activities are; as described in my March 9th RANT, “CHUTES AND LADDERS.”
Below, I compared the level of Sunday night silver increases during the three upcycles of the past year, as well as the four downcycles. As anticipated, the average Sunday night increase during PM upcycles – comprising 24 weeks of data – was a miniscule $0.10/ounce…
…less than a third the average $0.32/ounce decline during the 22 down weeks…
Of course, the latter data ignores the fact that Cartel blitzkrieg attacks often occur during COMEX hours, negating the need to attack Sunday night, given how much damage was already done; such as was the February 2012 “LEAP DAY VIOLATION,” when Cartel forces inflicted a $2.50/oz decline. Conversely, similarly-sized COMEX surges NEVER occur…
The key takeaway – as always – is to understand PAPER markets are but an ILLUSION; following a stale, transparent SCRIPT aiming to divert your capital from PHYSICAL Precious Metals. If you understand, you’ll realize why “PAPER PM Investments” are a one-way ticket to the poorhouse, and PHYSICAL gold and silver impervious to such criminal machinations.
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Way to go, ADMIRAL SPROTT! Less than two weeks ago, our fearless leader announced a $349 million offering of PSLV, the Sprott Physical Silver Trust, and since then gold rocked $5.00/oz higher, Cartel suppression and all. This afternoon, post market close, the Sprott Physical Gold Trust, or PHYS, announced an overnight offering of up to $200 million, to purchase PHYSICAL gold tomorrow morning.
Unlike the PSLV offering, which was open-ended as to pricing, the PHYS offering memorandum states the deal will be priced at $15.19-$15.24/share, slightly below today’s closing price of $15.34/share, which would push its market cap up to $2.3 billion. Today’s closing price represented a 5.0% premium to Net Asset Value, so the deal (as has been the case for EVERY offering of the five closed-end bullion funds PHYS, PSLV, CEF, GTU, and SVRZF) will be accretive to current shareholders. Last year, PHYS also closed an offering very near the previous day’s closing price, so I am highly confident this deal, too, will be a smashing success.
As I described in last week’s RANT, Eric Sprott is a man on a mission to destroy the Cartel, much like myself but with the financial firepower to back up his knowledge and passion. Do not underestimate the extent of damage he can cause the Cartel, which in my view is on the verge of breaking down to start with.
Per the title of today’s RANT topic, in line with what most people anticipated, the Cartel started yet another week off by attacking PMs at the open of the thinly-traded Asian markets on Sunday night, a long-standing tactic utilized to wilt SENTIMENT during a time of the day gold and silver investors have been conditioned to fear following a decade of systematic, manipulative abuse. To which I respond, “Is that all you got?”
As you can see below, all KEY ATTACK TIMES were utilized today in varying degrees, starting with the pre-emptive Sunday night walk down, followed by the WATERFALL DECLINE at EXACTLY 3:00 AM EST, a hard cap of gold’s rebound rally at EXACTLY the 8:20 AM EST COMEX open, a second WATERFALL DECLINE when gold attempted to go positive at EXACTLY the PM FIX at 10:00 AM EST, and of course the high tick of the day at EXACTLY 12:00 PM EST, the “cap of last resort.” So for those of you that think gold was “resting” or “consolidating” last week’s sharp gains, I say BALDERDASH! Show me a decline that does not occur at the same times of day as ALWAYS, and I’ll agree with you. But until then, give me a break, particularly when that same KEY ROUND NUMBER of $1,750/ounce is again being heavily defended.
EACH and EVERY Cartel “supplemental tool” was utilized today, starting with the Dow / Gold x 2 ALGORITHM we saw all morning when the Dow had the nerve to actually open down 100 points. You see, a 100 point Dow decline is the PPT equivalent of the Cartel’s 2% rule. In other words, while PAPER gold is essentially NEVER allowed to rise more than 2% in a single day (let alone 1%), the Dow is no longer allowed triple-digit declines, even though 100 points only equates to a measly 0.75% at current prices.
READ THE FULL NEWSLETTER
MONDAY EVENING REPORT
Late this evening, Jim Sinclair sent an urgent email about an impending event of great importance that MUST be heeded, on which he completed a special interview with the Ellis Martin Report about. The event involves the potential treatment of the impending Greek default by the ISDA, or International Swaps and Derivatives Association, the trade group responsible for deciding whether or not a “credit event” is considered a “default” under the terms of myriad credit default swap, or CDS, agreements.
If you remember the late October “Greek 50% haircut” deal – which triggered a huge equity rally, but NEVER happened, the ISDA determined a 50% debt write-down to NOT be a “default,” in perhaps the biggest farce in market history. Of course, the ISDA is a trade association managed by the very firms that create derivatives and swaps – namely, the five banks responsible for writing 97% of ALL CDS swaps – JP Morgan, Goldman Sachs, Citibank, Morgan Stanley, and Bank of America. I know, you really can’t make this up, a trade organization with the power to declare its mistakes “non-events,” but that’s the world of criminality we live in.
READ THE FULL NEWSLETTER ________________________________
TUESDAY MORNING COMMENTARY
After all that occurred last night, this morning is a bit anti-climactic. As noted above, the mantra of the day remains PRINT MONEY and MANIPULATE MARKETS, and as usual the Dow futures are higher. Overnight news is relatively thin, as has been the case during the recent period of market “LOCKDOWN” by TPTB, unless you believe Israel warning Iran of an imminent invasion, i.e. the potential commencement of World War III, is not newsworthy.
I also see Venezuela finally took delivery of its 160 tons of gold, formerly stored in London. I can only imagine the hoops the thieving BOE had to jump through to secure such metal, which I’d bet dollars to doughnuts was sold or leased years ago to illicitly hold gold prices down. Better yet, will they be able to honor the next batch of gold repatriation demand, such as the imminent summons of Holland’s 613 tonnes? And, for that matter, will the New York Fed be able to do same when they, too, are demanded gold from supposed custodial accounts of foreign central banks?
According to this article, markets are somehow “juiced” by the idea of a Greek default – er, 70% write-down – as if no one, such as the BANKS that own this debt, will be impacted. Oh wait, I see, “LTRO 2” is coming on February 29th to save the day, with the current consensus that an additional €1+ TRILLION will be PRINTED by the ECB – aside from non-stop, “off balance sheet” funding from the Fed “swap facility” to cover up these bank losses and enable carry trade “profits” to pay BONUSES with. No, this won’t end badly.
The PHYS press release just emerged while proofreading, and it was a BLOW OUT deal, of $303.8 million priced at $15.19/share, compared to the initial offering range of “up to $200 million, including overallotment, at $15.19-$15.24/share.” As it turns out, the deal will be $349 million if the overallotment is exercised, EXACTLY the same amount of Sprott’s PSLV silver offering last week. As Eric Sprott has emphasized for some time now, silver sales continue to be 1:1 on a dollar basis with gold sales, and thus the current 51:1 gold: silver ratio will not last much longer. I agree whole-heartedly, as both ADMIRAL SPROTT and myself believe the gold:silver ratio will fall to AT LEAST the historic ratio of 15:1, perhaps significantly lower.
Sunday afternoon, when the world’s working classes are finally relaxed at the tail end of their weekly “48-hour vacation.” During summertime, the barbecue is smoking, and in the winter the TV blaring with the mesmerizing sounds of pro football. For most, the last thing on one’s mind is financial markets, unless of course you’re a die-hard Precious Metals investor. Gold’s 24 hour per day trading liquidity is a comforting thought, but as all “goldbugs” know, the Cartel does its best handiwork in the wee hours of the night, particularly 3:00 AM EST when no markets are actively traded.
On average, gold trades higher during the Asian trading hours, excepting the SUNDAY NIGHT OPEN, when the Cartel often aims to “set the tone” for the day by smacking the market lower. Here in Denver, it is roughly 4:00 PM when Asian gold starts trading, so I can see quite early if a Cartel scheme is in action, such as the SUNDAY NIGHT PAPER SILVER MASSACRE on May 2nd, 2011, below.
I have not pored through all the Sunday night charts as in past RANTS, particularly the three COMEX GOLD MANIPULATION PICTORIALS published in 2011, links below. However, I can tell you – from a decade of experience – that the ONLY time in the overnight session (pre- 3:00 AM EST, of course) that gold typically falls is the Sunday night open, and I’d venture gold rises more than 0.5% at the Sunday night opening less than 2% of the time.
That said, there have been extended periods of “Sunday night excitement,” such as when gold is an extended up move based on news the Cartel has trouble “managing,” such as S&P’s downgrade of the U.S.’s AAA rating on August 6th, 2011.
When such periods occur, the Cartel still attempts to start most weeks with a “negative bang,” in this case below at that same pesky, KEY ROUND NUMBER of $1,750/ounce! However, under such circumstances Asian buying often overcomes these attacks quickly, as we saw the Sunday following the U.S. debt downgrade, below. READ THE FULL NEWSLETTER
It’s Monday morning, and there’s no rest for the weary. And by weary, I don’t just mean last night’s lack of sleep – notwithstanding the prudent investment choices that have kept me from real insomnia – but 13-plus years of fighting a war with reality I neither chose nor relish. Yes, I love what I do – perhaps, more than ever before – and it’s for people like you that I wake up earlier than ever, bright eyed and bushy-tailed. But no, there is nothing “fun” about manipulated markets, which in many ways have rendered moot 26-years of academic and practical experience analyzing fundamentals – and subsequently, choosing appropriate investments, for myself and others.
Here at Miles Franklin, we do not “recommend” anything, but simply tell the truth as we see it – which, manipulation or not, must eventually be reflected in financial (and physical gold and silver) markets. That said, the “short-term,” in a world amidst the most hideous, blatant episode of money printing, market manipulation, and propaganda, has turned out to be far less “short” than imagined – care of the unprecedented advancement of “weapons of mass financial destruction,” far beyond anything imagined during previous bubbles. Of course, no such “previous bubble” involved the end of the economic and monetary world as we have known it, which is precisely what we are dealing with today. And fortunately, those holding physical gold and silver have actual supply and demand forces on their side; as opposed to “paper PM investments,” and nearly all other financial assets – which cumulatively, have never been so overvalued, or vulnerable to the relentless, expanding strength of “Economic Mother Nature” and the “unstoppable tsunami of reality.”
Last week, the Wall Street Journal started to be thrown on my driveway without prompting, marking the first time I have seen this vile publication since I stopped reading it 17 years ago. Back in the formative years of my career – starting with my first internship during college (selling CD’s via cold calling, yielding 8% compared to 0% today), the Wall Street Journal was a veritable text book for learning about financial markets. Today, it has become such a blatant propagandist rag, it takes all my strength to not call their offices and tell them I’d prefer a free subscription to Satan’s handbook. Such as, for instance, the stunningly ignorant, aggressively vicious articles they published this weekend, titled “gold bugs getting exterminated” and “let’s be honest, about gold – it’s a pet rock” – the latter of which stated, with a seemingly “straight face,” that “gold is supposed to be a haven amidst hard times and soft money. So why, even as Greece has defaulted; the euro has sunk against the dollar; and the Chinese stock market has stumbled; has gold been sitting there like a pet rock?”
The reason, of course, for anyone with a pulse; an interest in truth; and the ability to discern reality from fraud; is that – per Michael Pento’s spot-on comments this weekend, “there are no free markets left in this world, and it’s becoming increasingly evident that most people on Wall Street prefer it that way. To wit, we have grown so accustomed to market manipulation; we have completely lost sight of how a free market is supposed to function.”
Regarding Precious Metals – which, over several millennia, have represented the polar opposite of the fraud paper money has proven to be – no one has better reported the manipulative horrors that have brought the global economy to its knees better than GATA, via the courageous, unyielding leadership of Bill Murphy and Chris Powell. To wit, even before last night’s heinous Cartel “hit,” GATA published this must read article – of how, with each passing day, more and more people are first realizing, and then publicly admitting, the truth. Such as, for example, John Hathaway of the Tocqueville Fund; i.e., one of the oldest, most respected mainstream portfolio managers. Who, despite his specialty in Precious Metals, has for years ignored the most important factor affecting the market he is mandated to invest in; that is, until now.
“At some basic level, all investors are aware of the gold price, as its unruly behavior could render the (government’s) ‘Truman Show’ dysfunctional. Allowing free-market expression of gold prices (poses) a serious risk at the highest policy levels; (and thus), gold’s strong increase amidst liberal doses of QE post-2008 through 2011 (struck) a note discordant with an otherwise happy fable, confirming what many investors suspected: i.e, QE and ZIRP failed to produce economic growth, and may well have jeopardized future prospects for a return to solid economic footing.
(Thus), it makes us wonder whether we are witnessing the final moments of a second, more sophisticated version of the 1960s London Gold Pool; i.e, a scheme organized by the U.S. and European governments to suppress the free-market gold price, to camouflage the growing, adverse fundamentals for the U.S. dollar. The present-day magnitude of fiscal and monetary irresponsibility, in our view, exceeds the precedent of the 1960s by multiples. And thus, it is only fitting that the elaboration and complexity of disguise required to beautify the underlying reality would be proportional. Government intervention via price suppression (interest rates, currencies) or price inflation (financial assets) seems to pervade all financial markets, so why should gold be exempt?”
I mean, at some point even the most die-hard “mainstreamers” have to admit to the reality that all they have been taught – in many cases, providing the means to earn a living – no longer exists. Like, for instance, the use of fundamental, technical, and sentiment metrics to gauge entry and exit points for financial assets. As now that governments are overtly manipulating markets – be it via traditional, “accepted” means like Central bank QE; or new, “unconventional” methods like the outright purchase of stocks (as documented here, here, here, here, and here), it’s no longer “conspiracy theory” to speak of market intervention – particularly when those executing it are being caught red-handed, in everything from stocks, to bonds, interest rates, currencies, and – what do you know – gold. And as for government participation in such schemes, one doesn’t have to an inordinate amount of “research” to realize such policy exists – as the U.S. government, for example, admits to regarding bonds (i.e., Federal Reserve interest rate policy); stocks; and oh yeah, gold and foreign exchange. Heck, the Chicago Mercantile Exchange – which in many ways, has acted as a de facto government agency for years, now offers “volume discounts” for Central bank trading in commodity, equity, currency, and fixed income futures!
Even MSM lackeys like Bloomberg are starting to understand the racket – in realizing, for instance, that China’s gold reserve announcement on Friday, comically understated as it was, was wildly bullish for long-term Precious Metals demand. That said, how ironic is it that, of all the media outlets on the planet, the one most antagonistic to gold has been Kitco? Which, whilst its bankruptcy protection approaches its fifth year, continues to publish the most anti-gold propaganda imaginable; such as, unsurprisingly, it’s “top story” following last night’s Cartel raid being Reuters’ unmitigated drivel that gold was down due to “dollar demand.” And this, whilst the dollar index, which is up solely due the collapse of the European Union, and self-immolation of the Bank of Japan, was completely unchanged from its Friday afternoon close; as were, by the way, all other markets.
That said, it’s time to focus on the “end game” playing out right before our eyes – firstly, for history’s largest, most destructive fiat Ponzi scheme; and secondly, investors’ diminishing ability to protect themselves with increasingly scarce Precious Metals. To wit, for 15 years the Cartel has run roughshod over the supposed “markets” for gold and silver; not only creating the grossest deformations in global economic (and financial markets) history, but destroying miners’ long-term survivability – as I discussed at length last week. That said, even Friday’s egregious Precious Metals paper raids couldn’t prepare us for what we witnessed last night; when, out of the blue, the Cartel attacked gold with a vengeance not seen since May 1st, 2011’s “Sunday Night Paper Silver Massacre.” Only this time – unlike then, when a “catalyst” was feigned in the form of the supposed capture of Osama bin Laden – there was absolutely, positively no news to account for, in the thinnest of Sunday night Asian trading, gold plunging by an astonishing $52/oz, or 4.6%, in one minute. Below I have placed, side by side, silver “trading” from May 1st, 2011 (a night, by the way, when China was closed for a holiday) and gold last night. Look familiar, does it?
Frankly, now that the Cartel has attacked on 107 of the past 109 Sunday nights, it’s difficult to be surprised. That said, we are talking about a $52/oz plunge in one minute – which, as noted above, won’t be lost on a world increasingly aware of the fraudulence of financial markets; increasingly fearful of the aforementioned “end game” of global currency collapse; and increasingly knowledgeable of the expanding, gaping chasm between physical Precious Metals demand and supply.
And again, there is absolutely nothing about this raid – from a time and method perspective – differing from dozens of others over the years; including the 478th “2:15 AM” EST raid the past 544 trading days, to additional attacks at the 8:20 AM and 9:30 AM EST opens of the COMEX and New York Stock Exchange, respectively. In fact, just as a whopping $1.4 billion of “paper gold” – or 2% of worldwide annual production – was dumped at the COMEX open on Friday morning, $2.7 billion hit the Asian markets “at one fell swoop” last night, with the obvious intention of taking prices down.
Holding physical gold and silver, the impact of such a raid is minimal – particularly in the case of silver, which as we speak is still amidst a major shortage, causing premiums and delivery times to significantly expand. However, regarding “paper PM investments” like mining shares, the end game I have for four years vehemently warned of is in sight. This weekend’s Audio blog discussed the utter annihilation of mining shares on Friday; and as I write this morning, the HUI is down another 8%, to levels not seen since 2003. In other words, discounting what I have long predicted; i.e., the utter collapse of supply – of both gold and silver – that likely, for all intents and purposes, will be permanent. Frankly, if prices don’t rebound significantly, and imminently, I’m not sure that even a massive consolidation wave will save Precious Metals mining; particularly in silver, now that base metal prices, too, appear headed to multi-decade lows. Not to mention, the world’s most important commodity – crude oil – and commodities in general, which this morning, cumulatively, hit a new 13-year low, causing global currency markets’ ongoing, Federal Reserve-fostered crash to accelerate. As long-time readers are well aware, I believe commodity markets have been so egregiously “deformed” by decades of inadvertent Central bank propping, it could be years, if not decades before they return to equilibrium. And in the process, the countless corporations, municipalities, and sovereign nations dependent on their sale – which cumulatively are already in more debt than at any time in history – will go bankrupt.
Here at Miles Franklin, we couldn’t be more aware of what Precious Metals holders have been through over the past four years, and are going through right now. We, too, have suffered, but our business couldn’t be more stable, and our desire to protect clients far beyond the “profit motive.” To that end, we simply ask you to call us at 800-822-8080, and give us a chance to earn your business. In our view, the physical shortages of 2008, 2011, 2013, and today are “culminating” – and when they do, the all but assured long-term shortages, certainly at prices resembling today’s comically suppressed levels, will make it difficult for most, if not all of the “99%” to protect themselves from the hyper inflationary Central bank nightmare that’s rapidly approaching.
Before starting, I want to share a comment from “Reader Ed” – which frankly, is one of the nicest compliments I’ve received in my career. In my view, the Miles Franklin Blog is one of the best sources of information about the global economy, financial markets, and Precious Metals fundamentals around – in large part, because we focus on, plain and simple, on the unvarnished truth. Yes, the truth can set you free – which is why I take great pains to instill this concept into my three-year old daughter; and why, per the comment below, the entire world – and certainly the opaque Precious Metals community – would greatly benefit from more of it. Which, by the way, I am 1,000% confident will occur in the coming months and years.
“These Hoffman articles are among the most well thought out and intelligently articulated of all the internet commentators who deal with economics and the PM’s. If all the other people in the PM business were as reasonable and balanced, there might be less skepticism among readers of the other sites who appear to have grown weary of all the unfulfilled predictions.”
Again, per yesterday’s must hear Audioblog, we are not making “predictions” of financial market performance; even, for that matter, gold and silver over the “short-term.” Conversely, we simply aim to spread truth; which, hopefully, you will, too. The world is a very big place, with close to seven and a half billion denizens. That said, the Internets reach continues to grow exponentially; and thus, nearly everyone will soon have access to alternative views. And given the power of our particular message – of the inevitability of fiat currency depreciation, and real money appreciation, we have no doubt our work – and yours, if you help to spread it – will be fruitful.
That said, let’s move on to today’s very important message. That is, after a brief discussion of today’s “horrible headlines” – which sadly, will worsen with each passing day, until the inevitable, and perhaps imminent, collapse of history’s largest, most destructive fiat Ponzi scheme. After which, life “as we have known it” will disappear; for a time, to be replaced with a far scarier existence – but eventually, a more stable, productive global economy, based on sound money. To that end, it is not the Miles Franklin’s Blog intent to guide, advise, or prepare you for such unknowns; but instead, to simply make you aware of what has always occurred to fiat currencies under such scenarios – and conversely, what has always been the demand response of real money.
OK, so let’s start with political lunacy – like the U.S. House of Representatives voting by the horrifying tally of 348-48 to arm the Ukrainian government, in what borders on an implicit act of war against Russia. Last year, we warned of just how dangerous the situation in this extremely troubled geopolitically important region could get. And now, with the currencies of both Russian and the Ukraine having collapsed; countless failed cease fires; expanding casualties; non-existent peace negotiations; aggressive Cold War rhetoric; and outright nuclear threats – such as Russia delivered yesterday – we can only say this. To ignore the potential for significant global geopolitical instability, particularly given the consternation caused by plunging oil prices – is to, at least financially, “whistle past the graveyard.”
Meanwhile in Europe, Greece – and the entire European Union – edges closer to the abyss. In what has become a cross between the worst Greek comedy and tragedy, we’re now told Greece has until Monday to submit details of the ridiculous, ambiguous “reforms” that emerged from the February 20th funding deadline crisis; which, as it turns out, weren’t even written by the Greeks! Frankly, I don’t think anyone is even paying attention anymore – as no matter how much can-kicking is attempted, it is a mathematical certainty Greece will fail in the near future; and when it does, the resulting “Grexit” will be financially – and psychologically – devastating to the world’s second largest currency.
But the scariest part of all is that it’s not just the “PIIGS” in imminent danger, but all of Europe; and for that matter, the entire world, given the ubiquitous financial ties in place. That said, Europe is clearly the epicenter – which is why yesterday’s news that France plans to unveil a broad swath of currency controls is so terrifying – like the limitation and surveillance of nearly all cash transactions, and the required reporting of gold transportation throughout France. Yes, my European friends, we could not be more urgent regarding just how small your window of opportunity to protect financial assets has become – and when the Euro does inevitably collapse, that window will likely be permanently closed.
Already, our Mexican readers – suffering from the inflationary effects of a plunging Peso – are telling us of how difficult it has become to source Precious Metals, let alone at a reasonable price. Well, guess what’s coming soon to Europe? And for that matter, American, and the rest of the world? This is why you must act now to protect yourself from draconian government acts – which only occur in response to calamity. Clearly, the French government senses calamity now. And thus, we ask, would you rather own “priceless precious metals or worthless fiat currency?”
Here in the United States of Collapse, this morning’s horrifying February durable goods orders number (-1.4% versus expectations of +0.7%) continues a relentless stream of “2008-like” data, completely invalidating the fraudulent “PMI Manufacturing” diffusion index figure I railed about yesterday. I mean geez, what part of the biggest annual plunge in global trade volume since mid-2011’s Global Meltdown II do people not understand? Or, for that matter, yesterday afternoon’s American Petroleum Institute data, revealing the largest inventory build in 34 years? Or heck, the pathetic “benefit” of $11 trillion of global economy on the dying U.S. economic empire – which trust us, would look far uglier if real, “apples to apples” accounting was utilized. Consequently, the 10-year Treasury yield is trading – as I write Wednesday morning – at a paltry 1.86%, compared to 2.26% in the moments following last month’s historically fraudulent NFP employment report. For the millionth time, as I wrote in last year’s “most damning proof of QE failure,” Treasury rates are plunging because the entire world is front-running the inevitable launch of QE4 – which frankly, would not surprise me if it occurs this year. Nor would it surprise Whirlybird Janet herself, how last month delivered the “most unequivocally dovish FOMC statement in memory” to Congress.
And now, for today’s principal topic; i.e., the “worst precious metal sentiment in two decades.” That said, let’s start by saying “sentiment” is a very ambiguous concept; and thus, constantly miscalculated, misinterpreted, and misunderstood. Let alone, by newsletter writers seeking to generate trading activity, by insisting it can be quantitatively harnessed. Which, by the way, is particularly dangerous in the Precious Metals sector, given how it is the most manipulated (read: suppressed) on the planet, with “Cartel traders” well aware of everything from sentiment readings to technical resistance and support levels.
However, the physical gold and silver markets are entirely different animals, for a variety of reasons. To start, nearly all buyers – of physical metal, not “paper PM investments” like mining shares, ETFs, and closed-end funds – do so for the right reasons; i.e, long-term protection against and fiat currency inflation, and insurance against political, economic, and market calamity. Secondly, the time, effort, and cost of selling gold and silver is a considerable deterrent; i.e., the polar opposite of owning, for example, GLD or CEF, in which one click of the mouse, and you’re divested. And finally, as pertains to the current situation, never have the fundamentals for Precious Metals ownership – both monetary and economic – been so powerful; let alone, with prices trading below the miners’ respective costs of production, making it that much more difficult to pull the trigger on a sell order.
That said, this is unquestionably the most terrified I have seen the Precious Metals community since entering it 13 years ago; as is the case with Miles Franklin, which has been in the Precious Metals business for two decades. The reason, of course, is the relentless Cartel attacks that, while ongoing since the PM bull commenced at the turn of the century, accelerated exponentially when TPTB went “all in” to market manipulation in mid-2011, and berserk following the infamous April 2013 “closed door” meeting between Obama and the “TBTF” bank CEOs (just one day before the hideous “alternative currency destruction” raids). Things have gotten so bad, we have now witnessed psychology-destroying “Sunday Night Sentiment” raids on 91 of the last 92 weeks; “2:15 AM” EST raids on 405 of the past 464 trading days; “Sixth Sigma” declines in thin aftermarket trading; and of course, unconscionably blatant silver waterfall declines. And this, amidst some of the most violently positive PM headlines of our lifetimes.
Consequently, Miles Franklin is actually seeing the first material selling activity since going into business in 1989. Not that the total volumes are particularly large – or that such supply has a material impact on prices (likely, it’s already in China). However, we have not seen material selling activity since the PM bull market commenced nearly two decades ago; and again, this is occurring amidst the most bullish PM news flow of our lifetimes – much less, with prices so low, the mining industry is on the verge of collapse! Obviously, Americans have become so frustrated – and jaded to the expectation of new Cartel attacks – that seemingly no news prompts them to action. And clearly, since people like myself are already fully invested, the U.S. market requires new buying leadership to restart it. Of course, this is hardly the case overseas, where plunging currencies have caused gold prices to surge in foreign currencies. However, to secular Americans, such reality isn’t even on their radar screen yet.
Consequently, the charlatans financial opportunists characterized as “deflationists” are having their 15 minutes of fame, making ridiculous predictions like sub-$1,000 gold and sub-$13 silver, in the hopes of generating readership and trade commissions. Remember, not only is “deflation” a myth in fiat currency regimes (how’s yourcost of living doing?), but even if it were real (other than gasoline prices, which constitute a very small, albeit high profile, portion of one’s budget), Precious Metals have always been the best performing asset class during such periods. Let alone, when prices have already been pushed well below the industry’s cost of sustainability; and for the majority of mines, the actual variable cost of production.
As they say, “buy low and sell high.” And if today’s historically low prices – relative to worldwide fiat currency outstanding; mining economics; and political, economic, financial, and monetary uncertainty – can’t convince you today’s prices are “extremely oversold,” I don’t know what will. And, as always, if you do decide the time is now to protect your assets with the only real money the world has ever known, we hope you’ll call Miles Franklin at 800-822-8080,and “give us a chance” to earn your business.
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
Yes, 77 “Sunday Night Sentiment” attacks in the past 78 weeks – whilst no other market materially moved. Actually, tonight took a full two hours before the typical Cartel raid; with oil sitting at the same -1% level as it opened at two hours ago, as opposed to most weeks, when the attacks start within 15 minutes of the ultra-thin Sunday night open (if that long).
Think these monsters aren’t terrified? Amazing how much more intense the attacks became in the weeks leading up to the Swiss vote; let alone, now that the END GAME of global economic collapse is upon us.
Why am I writing this – on Sunday night, as Diana is cooking dinner? To let you know just how desperate TPTB have become to prevent the “Achilles Heel of the Financial World” – i.e., silver, from doing NOW what it must inevitably do, sooner or later…
And remember, gold is up for the year – by 1% in the U.S., and on average, 5% in the rest of the world (as you’ll see in my next article). And as for silver, demand has NEVER been higher – or the outlook for supply EVER so weak.
Andy Hoffman joins Elijah Johnson of Finance and Liberty to discuss the Sunday night sentiment attacks, physical markets and paper markets, silver is the most undervalued against the dollar in 15 years, the stock market and the bond market.
It’s Monday morning, and hallelujah – we not only did we not see a “Sunday Night Sentiment” attack for the first time in 40 weeks – as early attempts were rebuffed at the likely new floor level of $1,300/oz. but no “2:15 AM EST” raid occurred either. Quite shocking and laughably, even the typically fantastic Zero Hedge attributed gold’s strength to “Ukraine fears” – as if the expanding instability in that dark corner of the Earth is “new news.”
So here we are, just days after another Fed “tapering” lie, COMEX options expiration, and the most blatantly fabricated NFP report in U.S. history; and lo and behold, PMs are trading higher. Given their ragingly strong fundamentals, this should surprise no one with even a mild understanding of the reasons for – and mechanisms of gold and silver price suppression. However, what really is puzzling and alarming to the highest order – is the fact that despite increased “tapering” – in our view, a lieto start with particularly given “Belgium’s” sudden Treasury buying surge; is the fact that Treasury yields, amidst a so-called economic “recovery,” have plunged to seven-month lows.
Bloomberg put out a story this morning that new pension rules will yield dramatically increased Treasury bond demand in the coming years. However, its logic couldn’t be more ridiculous – in claiming:
Pension plans, which oversee $16.3 trillion, are shifting into longer-term Treasuries to lock-in last year’s stock gains by matching assets with their future liabilities as funding deficits narrow.
In other words, selling stocks to buy bonds and yet, not a peep about how doing so would crush the stock market; much less, the fiduciary madness of purchasing Treasury bonds near record low yields, amidst record money printing, surging real inflation, and exploding Federal debt. Granted, the fact that the Fed suicidally bought up a third of the entire Treasury market has tightened supply somewhat; but at such extremely overvalued levels, one would not expect such moronic “investment decisions” by the nation’s largest fiduciaries – particularly given the sea of sovereign red ink anticipated in coming years. But alas, this is the bubble world the Fed has created which will continue in all its glory, until eventually it catastrophically collapses.
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.
And why, you ask, is such lunacy continuing? Yep, expectations the Fed will not only end its “tapering” pretense in the near-future, but increase QE as it becomes painfully clear no recovery is present; nor ever was, or will be until the cancerous fiat currency regime, once and for all dies. Sure, the Cartel took some solace in capping Friday’s gold rise at exactly 1.0% at exactly the 10:00 AM EST close of the physical markets, at exactly $1,300 with a prototypical “Cartel Herald” algorithm – replete with late day “walk down” to $1,299. However, this morning’s increase – albeit, again capped at exactly 1.0% – negates that “victory”; and given the above, may well mark an upsurge in global physical demand, well above and beyond last year’s historic levels.
The fact is, Central banks the world round have created bubbles in the world’s ugliest most toxic assets via “promises” to support insolvent entities from “too big to fail” banks to sovereign Treasuries themselves. To wit, we have long documented how several PIIGS’ sovereign yields are now, insanely, below those of U.S. Treasuries care of Draghi’s July 2012 promise that the ECB would do “whatever it takes” to save the Euro. Ultimately, the largest bubbles of all are the currencies themselves which in due time – perhaps much sooner than most can imagine – will collapse like the 599 before them. David Stockman, a former Budget Office Director in the Reagan Administration, recently wrote a series of fantastic articles discussing such, like this one – describing the sorry state of the American consumer, per below…
Time wrote at the end of January:
Too many of us are living paycheck to paycheck. The CFED, or Corporate Federation of Enterprise Development, finds that 44% of Americans are living with less than $5,887 in savings for a family of four. The plight of these folks is compounded by the fact that the recession ravaged many Americans’ credit scores to the point that now 56% percent have subprime credit.
…and this one depicting the abject failure of Japan’s “Abenomics” – per below…
In a survey of 1,000 consumers on March 29-30 by broadcaster Fuji News Network, 69% said they had not made any special purchases ahead of the sales tax rise, and 77% said they didn’t feel an economic recovery was under way.
However, the most damning of all – inspiring today’s article – was this dire depiction of the ongoing Chinese economic collapse, per below…
The borrowing, building and speculating mania in China has obviously gotten so extreme that even the new regime in Beijing has been desperately trying to cool it down. But this will end up as a catastrophic failure—not the ‘soft landing’ brayed about by Wall Street bulls who do not have the slightest comprehension of the difference between free market capitalism and the phony ‘red capitalism’ that has been confected by the party-controlled apparatus of the massive, intrusive, bureaucratic and hierarchically-driven Chinese State.
Essentially, it describes the unprecedented real estate and construction speculation the Chinese government has fostered via unfettered money printing and lack of regulation of “shadow banking” lending. To the end of siphoning every imaginable job from the West, the Chinese government has indeed succeeded. However, in using such destructive fiscal and monetary policies – ironically, not much different than those employed by its Western peers – it has created the largest economic bubble in human history. We discussed such madness in March’s “Most Terrifying Article We’ve Ever Read” – as well as the terrifying ramifications of the PBOC’s decision to allow the Yuan to further weaken in April’s “Chinese financial torture. However, given the importance of this potentially world-destroying event it makes sense to explore the issue from Stockman’s unique angle as well.
And given the universal “karma” of writing of the TRUTH, take a look at the Chinese news that emerged simultaneously; starting with a leaked recording from the Vice-Chairman of Vanke Group, China’s largest real estate developer – in which he stated:
It is a dangerous bubble, and already deflating’. China has reached its capacity limit for new construction of residential projects… and I don’t see any possibility for a rise in home prices.
The below chart depicting parabolic growth in Chinese housing inventory confirms his fears, nearly doubling in the past two years…
…and this morning, China’s Manufacturing PMI contracted for the sixth month in a row at just 48.1 making an utter mockeryof the government’s 7.7% GDP growth projection made just two months ago. But the real shocker was news that Chinese home sales collapsed by an astounding 47% from a year ago, and an otherworldly 65% in “tier-2” cities…
1st-tier city sales fall 40% y/y
2nd-tier city sales drop 65% y/y
3rd-tier and 4th-tier city sales decline 32% y/y
And thus, if anyone continues to harbor belief that somehow, somewhere, a miraculous economic “recovery” will save the day, it’s time to embrace the “realization of reality” rapidly sweeping the planet. China has been the “world’s growth engine” since Western economies peaked at the turn of the century but sadly, as you can see such “growth” was largely funded with the same debt, money printing, and lax regulation that destroyed the United States, Europe, and Japan. The “China Syndrome” is now melting down and with it, TPTB’s last remaining prayer of salvaging its failed gambit of unprecedented money printing, market manipulation and propaganda.
Under such a scenario, how can anyone not consider protecting their net worth with at least a modicum of “financial insurance”; i.e., real money? To wit, gold and silver are decidedly NOT “investments”; but instead, the only assets known to have survived through 5,000 years of recorded history – as opposed to fiat currencies, none of which have survived more than 50 years without either collapsing or significantly devaluing. With global economies plunging, money printing, inflation, and social unrest surging and debt levels of all kind rising parabolically, it’s only a matter of time before the dollar-based standard dies as well – and with it, the “Cartel’s” ability to artificially suppress gold and silver prices.
It’s New Year’s Eve morning, and I had planned on taking the day off from writing. However, given the incredibly blatant Cartel attacks of the past two days, I thought a PM “reality check” was in order. First, we experienced the 20th “Sunday Night Sentiment” attack in the past 21 weeks; yet again, with the quite obvious intention of holding silver below the $20/oz. “line in the sand” erected six weeks ago.
Next, the Cartel executed its third blitzkrieg attempt to break the June gold and silver lows of $1,182/oz. and $18.50/oz., respectively; conveniently, on the year’s final day, per this DEAD ON comment by Zero Hedge:
It seems someone wants the status-quo-defying precious metals going out at their lows, as central-planning-supporting stocks go out at their highs.
-December 31, 2013
I mean, you simply had to see this one to believe it; as with NOTHING going on elsewhere, gold suddenly plunged $10/oz. in a matter of seconds – and silver, an even more incredible 3%.
But then again, in this “year of infamy,” silver has endured at least one 2+% PAPER attack on more than half of all trading days. And as you can clearlysee below, most of such attacks were utilized to cap silver rises; as despite 135 such intra-day attacks – out of 252 trading days – on only 33 occasions did silver actually close at least 2% lower. FYI, the “Dow Jones Propaganda Average’s” only 2+% down day was on June 20th – i.e., the day the Fed first hinted it mighttaper QE, when the PPT allowed it to fall a whopping 2.3%.
Whilst this fraudulent, manipulative paper naked shorting was ongoing (I’ll get to the “happy conclusion” shortly), the COMEX December gold contract went off the board. Roughly 660,000 ounces stood for delivery this month, very little of which has yet left the COMEX warehouses. And thus, unless JP Morgan magically comes up with a new source of supply in the next few days, the COMEX’s registered gold inventory will likely end the year at no more than 200,000 ounces – worth $240 million at current prices. Better yet, last year’s February contract was as big as the December contract. And thus, with 223,000 contracts currently open – representing 22.3 million ounces of gold – the odds of a February “default event” grow exponentially larger. FYI, assuming the Fed is actually printing $75 billion/month (last week, I proved that amount is closer to $130 billion), its daily “production” is roughly $250 million; i.e., the value of the entire COMEX registered gold inventory.
Meanwhile, the year ended with yet another explosive burst of global PHYSICAL buying, as characterized by thesedramatic Chinese pictures. I initially wrote of China’s “irrefutable physical gold reality” from Guangzhou (Canton) in August; and if these photos of “holiday shopping” don’t drive the point home, I don’t know what will.
Based on published data, Chinese physical gold imports will end 2013 at more than double 2012’s record levels, at roughly 1,200 tonnes (below data is through October); and who knows how much more demand the unpublished data would uncover?
Clearly, Chinese silver consumption is off the charts as well; as given a relatively weak year for U.S. demand, U.S. Mint Silver Eagle sales still exceeded 2011’s record level. Of course it was the Chinese buying them; and likely the Indians as well, given that Indian silver imports will end 2013 at a record level as well, exceeding the previous high from 2008.
As most readers know well, Indians have dramatically increased silver purchases in response to onerous gold import restrictions imposed by the soon-to-be-deposed Indian government; which itself, is likely seeing record demand as well, when incorporating the exploding Indian smuggling trade. According to William Kaye, Indian gold imports could alsototal a staggering 1,200 tonnes in 2013, despite such restrictions. But heck, you don’t need to take his word for it. Just look at the surging PHYSICAL premiums being paid as we speak – of nearly 25% over the paper “spot price,” and draw your own conclusions. FYI, total global gold production is roughly 2,700 tonnes; and thus, India and China alone will likely acquire ALL of it.
Moreover, as Cartel banks like JP Morgan, Goldman Sachs, and Bank of America try to scare you into believing PMs are about to “crash,” we ask you to consider the largely ignored issue of fundamentals. I don’t think anyone has focused more on PM cost of production than the Miles Franklin Blog – other than Steve St. Angelo at the SRSRocco report, of course; and I think fourth quarter mining “earnings” will bear this out in spades. For gold, the “all in” cost of mining – i.e., mining and reserve replacement – is at least $1,500/oz., per thisquote from Gold Fields’ CEO, Nick Holland (Gold Fields is the world’s fourth largest gold producer). As for silver, St. Angelo proved prices must be above $25/oz. to enable the mining industry to produce positive cash flow; and thus, at current levels, we anticipate dramatic mine closure announcements in the coming months. Heck, silver industry capital expenditures are down 62% in 2013 alone; and as for 2014, look out below at the current price levels.
Worse yet, mining companies typically update their reserves at year-end. And thus, when fourth quarter earnings reports are released, we expect dramatic reserve reductions across the entire industry. In other words, proving economic gold and silver “ceases to exist” at current prices. According to thisFinancial Times article, for example, industry leaders Barrick Gold and Newmont Mining assumed prices of $1,500/oz. and $1,400/oz., respectively, for the majority of their 2012 reserve calculations. And trust me, if the world’s two largest gold miners – owning many of the world’s low-cost mines – will be dramatically cutting reserve estimates, you can imagine what “the rest” will do.
Irrespective of what the Cartel attempts in the paper markets in 2014, this “reality check” should make it crystal clearthat the “shelf life” of such manipulations has never been shorter. Physical demand has never been stronger; nor has the political, economic and social factors weighing against fiat currency and for real money. Per our “2014 predictions,” the odds of a further separation between paper and physical prices in 2014 are extremely high; as inevitably, reality will win out – as it always does.
To end the year on a particularly positive note, here is how the PM markets reacted to the Cartel’s latest attempt to break the June lows – whilst interest rates broke out to a new multi-year high. The more the Cartel fails to break the metals, the stronger the price support; and thus, the greater the odds of a true, sustainable bottoms. Although, if they actually do manage to break those lows, they will simply accelerate the PHYSICAL drain that will ultimately destroy them. FYI, I bought more PHYSICAL silver this morning; and hopefully, you too will realize that NEVER in history have prices been more inexpensive.
From the entire Miles Franklin team, we wish you a happy, healthy, and prosperous New Year. And as always, we ask you to “give us a chance” to earn your business!
It’s 3:00 AM EST Monday morning, and I couldn’t sleep. Naturally, with absolutely zero material news or overnight action in the global capital markets, we’ve been treated to perhaps the 20th straight “Sunday Night Sentiment” PM attack – followed by the 140th visit from the 2:15 AM EST suppression algorithm in the past 154 days. Frankly, I’m just looking forward to 2013’s end; as never in my 24-year career have I been more frustrated, or angry. Western governments, led by the United States of Dying Hegemony, have taken over all financial markets for the moment, ruling them with an iron fist. As former Assistant Treasury Secretary – and current Freedom Fighter – Paul Craig Roberts notes it is simply unfathomable how such criminality remains largely ignored by the Western MSM. And not just in the gold and silver markets, but all forms of information dissemination and “price discovery.”
Fortunately, the laws of “Economic Mother Nature” cannot, and will not, be repealed. Clearly, something extremely extraordinary is going on the global physical markets, as the trend toward collapsing gold inventories has reached crisis levels. To wit, on Friday alone, another 13% of the COMEX registered inventory disappeared, leaving a record-low 432,000 ounces supporting the entire Ponzi scheme, worth a piddling $500 million at today’s prices.
Moreover, by year-end, it’s entirely possible that no more than 100,000 ounces will remain, in light of additional December contracts still standing for delivery. Meanwhile, Shanghai Gold Exchange volumes have recently exploded, suggesting additional, massive physical deliveries in the coming weeks; whilst Indian gold premiums have surged to a record 23.5% above the Western “spot price.” In fact, Paper PM prices have been suppressed so extraordinarily, that despite the most positive supply/demand fundamentals of our lifetimes, major mining companies are cutting staff, capital expenditures, and production en masse.
Something’s got to give in the coming weeks and months; and when it does, it may well be historic – per Friday afternoon’s quote from the great Andrew Maguire:
In the real world, wholesalers were the busiest in months yesterday, and they are run off their feet again today. Looking at the charts, that’s really counterintuitive to what’s happening. There is enormous demand sub-$1,200, and these divergences cannot last much longer.
This enormous leverage employed by these paper market sellers is a distortion of what’s really happening. We’re stretched so far that the unwind and the rebound higher is going to be disorderly, as sovereign and central bank buyers continue to milk Comex based leverage selling.
They are busy converting this resulting spot price into physical (gold) at the painted fixes (in London). This physical latency will catch up in a very disorderly way the moment the downside momentum wavers. And we’re reaching the point where we can see that change in behavior is beginning to become evident.
Maguire mentions the aptly named London “fixes”; which for years, I have cited as the Cartel’s primary attack times – particularly the “PM Fix” at 10:00 AM EST, marking the end of the global Physical PM trading day. Amazingly, throughout a 13-year bull market, gold is actually net down during the ensuing “paper” period – particularly, New York COMEX trading; and finally, the word is getting out.
Last month, it was reported by Bloomberg, the Wall Street Journal, and other MSM outlets that the PM fixes were being investigated for trading improprieties, surrounding the five firms involved; i.e., Barclays, Deutsche Bank, Bank of Nova Scotia, HSBC and Societe Generale. The fact that Barclays was the central figure in last year’s LIBOR rigging scandal only makes things that much more suspicious; let alone, that HSBC is custodian of the controversial GLD gold ETF, and Bank of Nova Scotia one of the three main COMEX depository managers. Frankly, I don’t expect TPTB to allow the investigation – which, ironically, includes the U.S. CFTC – to conclude anything substantial. However, in our view, the fact it is getting such widespread attention may well prove a “tipping point” in the battle between the fraudulent paper and real physical markets.
Thus, I was extremely encouraged by thisfollow-up article by Bloomberg on Thursday, highlighting what we view as by far, the most damning evidence against the paper manipulators. Long-time Miles Franklin Blog readers are well aware of the fine work of European analyst Dmitri Speck, who has charted every single day of gold and silver trading over the past 15 years; i.e., since former Treasury Secretary (and Goldman Sachs CEO) Robert Rubin famously espoused America’s to-this-day-ambiguous “strong dollar policy.” Bloomberg actually published his infamous chart memorializing the unnatural suppression of prices at both the AM and PM “fixes”; asking the obvious question of how these banks’ manipulative activities can be stopped.
In the excellent 1997 movie Contact, Jody Foster travels through a wormhole to a distant galaxy; where she meets an alien being, asking him how their respective races’ relationship would progress. He tells her “in baby steps”; indicating that in time, all will be revealed – which is exactly what is going on in the heavily manipulated Precious Metal markets. In other words, in time, the entire world will be aware that archaic paper exchanges like the LBMA and COMEX are not only obsolete, but rigged. Better yet, it won’t take “ages” to occur; as the Cartel’s “Achilles Heel” of collapsing physical supply, amidst surging physical demand and prices below the cost of production – may well cause such “enlightenment” to occur much sooner, and more explosively, than most can imagine.
From this summer’s depths, at $1,182/oz. gold and $18.50/oz. silver – i.e., not far from this morning’s levels – prices suddenly surged to $1,430/oz. and $25.00/oz., respectively, in just a month’s time. Will this happen again in early 2014? We have no crystal ball, of course. However, it’s difficult to believe it won’t; as the proverbial “beach ball” has never been held this far underwater – amidst a political, economic, and social environment in which any number of black, “grey,” or other types of “swans” are lurking. And even if we wait somewhat longer for this inevitable validation, the opportunity to protect one’s assets from the long-term inflation guaranteed by cornered Central banks has never been better. No inflation, you say? Then how is it that both chicken and beef prices hit all-time highs last week – with the prospect of Obamacare’s widespread launch driving the world’s highest healthcare costsexponentially higher?
Just like any other inexorable trend, the “mainstreaming of PM manipulation” will spread the world until ultimately, the so-called “arbitrage” between physical and paper prices is resolved – in the favor of the “path of least resistance”; i.e., materially higher levels. Unfortunately, such an event will also be accompanied by the realization that “money” as we have known it is dying; at which point, either you will have safeguarded your financial future with real money or forever lost the chance – certainly at prices even remotely near today’s historically suppressed levels. As always, we encourage you to do your own due diligence; and please, utilize Miles Franklin as a resource whenever possible. Remember, our goal is to educate, assist, and of course, broker any future transactions you decide to make. We have been doing just this for 24 years – without a single registered complaint with the Better Business Bureau; and strive to be the most competitive, service-oriented, and respected name in the bullion business.
For the entiretyof my “TEN YEARS OF HEAVEN AND HELL” – soon to be eleven – I have endured the ignominy of Cartel PM attacks. Starting with “SUNDAY NIGHT SENTIMENT” raids, to the KEY ATTACK TIMES of 3:00 AM EST, 8:20 AM EST, 10:00 AM EST, and 12:00 PM EST; and more recently, 2:15 AM EST and 7:00 AM EST – I have seen it ALL. Sadly, such “operatives” are becoming more frequent andintense; as TPTB realize the END GAME of fiat currency collapse is rapidly approaching.
On a daily basis, it appears PMs are ALWAYS down; morning, noon, and evening. Nearly EVERY time I walk into the gym, down they go; or anytime I jump into my car; or look at my screen. Just watch CNBC in the morning; and you’ll see that nine out of every ten times “gold” pops up on the screen, it immediately ticks down. Moreover, ninety-nine times out of a hundred, when I click on my Kitco app, gold and silver immediately decline. And perhaps 999 times out of 1,000; when gold re-opens in the ultra-thin “Globex” electronic market at 6:00 PM EST, the first tick is down.
Thus, it seems quite the paradox that gold and silver are the WORLD’S BEST PERFORMING MARKETS over the past 12 years; rising, on average, by 17%-20% – and in gold’s case, NEVER having a down year…
…despite the fact that during New York trading hours – when 99% of ALL significant price moves occur – gold is net DOWN over this period. FYI, the 10:00 AM EST WATERFALL DECLINE in the chart below represents the afternoon “P.M. Fix” in London; when PHYSICAL trading ends for the day, and (naked shorted) PAPER trading dominates…
Conversely, the “DOW JONES PROPAGANDA AVERAGE” appears to ALWAYS be higher; no matter the news or time of day. For the past decade, I estimate Dow futures have been called higher or barely lower on 99% of all trading days; compared to no more than 50% for PMs – despite the aforementioned bull market.
Despite the “perma-green” status perpetrated on the Dow by the “President’s Working Group on Financial Markets,” the WORLD’S MOST WIDELY VIEWED INDEX has barely risen in the past 12 years. Moreover, if you exclude the survivor bias of deleting bankrupt or reorganized companies like General Motors, AIG, Citigroup, and Eastman Kodak, the Dow would likely be down over this period…
Of course, if you adjust the Dow for INFLATION, it is down significantly; by 28% utilizing the government-published CPI Index, or 35%+ including GM, AIG, C, and EK…
…and an astonishing 67% (or 75%+ including GM, AIG, C, and EK) when incorporating TRUE inflation statistics, as measured by John Williams of ShadowStats.com…
…per the chart below; perhaps one of the most important you will ever see…
It’s difficult to comprehend how the PPT can keep the Dow higher nearly all the time without it meaningfully rising. Conversely, PMs nearly always appear to be down; yet, year after year, end up higher. Thus, the “DOW-GOLD PARADOX”; which defines the TPTB’s strategy of keeping investors away from assets that PROTECT them, and in investments that HARM them.
So long as you realize their “Achilles Heel” is the lack of available PHYSICAL gold and silver (utilized to suppress prices), you will NOT fall prey to this trap; and thus, be SAVED when other assets – government-supported or otherwise – FAIL.
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
It’s early Monday, and let’s start by clearing our heads of the ramifications of yesterday’s first round of the French Presidential election process – in which, as expected, 39-year Emmanuel Macron, a former Rothschild Bank investment banker whose only political experience was miserably failing as “Economy Minister” under outgoing President Francois Hollande (whose approval rating was so low – principally because the French economy has collapsed – he didn’t run for re-election); running under a new Independent political party, just established in September; came in first place, a mere 2.5 percentage points ahead of Marine Le Pen.
For all the talk of the impending election cataclysm, the relentlessly PPT-supported “Dow Jones Propaganda Average” entered the weekend barely 2% below its all-time high. To that end, its overvaluation is unprecedented, no matter what metrics are utilized to analyze it. I mean, per this must read article, not only are essentially all U.S. equity valuation metrics pegged off the charts; but after having largely ignored the surging stock market since the 2008 crisis, retail investors have finally re-entered the fray. To wit, in 2017’s first quarter; coincident with the PPT-orchestrated bubble catalyzed by the patently fraudulent – and for all intents and purposes, already disproven – “Trump-flation” meme; retail brokerage accounts were opened at the fastest pace since the first quarter of 2000 – i.e., the top of the dotcom bubble.
Of course, now that history’s largest, most destructive fiat Ponzi scheme is global, the bubbles are far larger, broader, and more deleterious. In China alone, there’s no precedent for such unmitigated credit profligacy, which has created the world’s largest debt/GDP ratio. Yes, larger than even Japan when considering that most of China’s debt is held by “corporations” that are in actuality, state-owned. By the way, note that the chart below; created by none other than the Bank of International Settlements and IMF; suggests China entered a “major downturn” in 2015 – after which, said “social financing” has exploded further. This, compared to “official” Chinese GDP growth of roughly 6.5% per annum; which, I might add, is the lowest “growth” the Chinese government has reported since it started publishing such statistics 30 years ago.
Yes, a global phenomenon, as Central banks have “monetized” $1 trillion in the first four months of 2017 alone, nearly quadrupling their cumulative balance sheets via freshly printed “money” since the 2008 financial crisis. And that’s just the “on balance sheet” amount, ignoring “off balance sheet” acquisitions via derivatives, swaps, and offshore slush funds. In fact, as you can see here, global QE has never been higher. China’s “social financing” is running at its highest-ever pace; and just last week, the heads of the ECB and BOJ reiterated, based on their comically ridiculous logic that “inflation” is too low, that the below, historic QE pace won’t end any time soon. Consequently, global debt to cash flow valuations are at an all-time high, at a time when real economic activity is imploding and debt is parabolically exploding. Which, I might add, must continue rising, at an accelerating pace no less, to prevent history’s largest Ponzi scheme from instantaneous collapse. Which, in turn, can only be sustained by record-low interest rates – in Europe and Japan’s case, negative rates – ad infinitum.
Ironically, the delusional liars known as Federal Reserve governors continue to lie about the economic “strength” that their own calculations disprove – such as its own estimate that 1Q GDP “growth,” to be reported on Friday, will be just 0.4%. Not to mention, the experience of 99% of Main Street America – as evidenced by, to name a few examples, the ongoing “Retail Armageddon”; exploding subprime delinquencies; negative commercial lending growth; plunging iron ore and crude oil prices (the latter, despite relentless “oil PPT” support); year-over-declines in government tax revenues; and relentlessly weak economic data – like this morning’s Chicago Fed National Activity Index report, which plunged from 0.34 in February to 0.08 in March.
Fed Vice Chairman Stanley Fischer – armed with the “strength” of a blatantly PPT-supported stock market – said on Friday that he still believes two more rate hikes are likely in 2017. This, despite the market itself no longer discounting such a possibility; as evidenced by the 10-year Treasury yield plunging last week to a low of 2.17%, from December’s post-Election high of 2.61%. Not to mention, the dollar falling from 103.2 over this period, to this morning’s 99.0. Comically, he attributed much of the economy weakness – and “inflation rate,” despite the core CPI being over 2% for more than a year now – to “seasonal factors.” This, despite the fact that not only are such “seasonal factors” adjusted for in GDP statistics; but just two years ago, the government initiated “double seasonal adjustments,” to make sure GDP calculations are fraudulently inflated twice as much as usual.
As for the French election, the powers that be made it crystal clear that they would be “supporting” the stock market at all costs – per this damning article from this weekend, featuring such admissions by governors of the ECB, Swiss National Bank, and Bank of Italy. Remember, the world’s leading Central bankers met at the Bank of International Settlements the day before the BrEXit referendum; and unquestionably, having “learned” from the experience, were even more prepared to intervene following Trump’s election; in the latter case, reversing real market reactions (like rising gold, and plunging stocks) in mere hours, as opposed to the week it took them to reverse the post-BrExit market reaction.
I mean, they might as well have trotted Alan Greenspan out to reiterate that “Central banks stand ready to lease gold in increasing quantities, should the price rise” – as he infamously told Congress in 1998, “coincident” with the launch of the modern-day “New York Gold Pool.” I.e., the illicit, fraudulently-acting Cartel that supports the “strong dollar” propaganda meme created when former Goldman Sachs CEO Robert Rubin became Treasury Secretary. A “policy,” I might add, that is officially dead – per Donald Trump’s vehement claims that a “too strong” dollar is “killing” us; and thus, he prefers a “low interest rate policy.”
Consider that amidst historic, Central bank-created asset bubbles – in both stocks and bonds – the Cartel has gone berserk holding paper Precious Metal prices down, as evidenced by COMEX “commercials”’ record-high silver short position, despite no visible “crisis” to note. This, after global PM “paper trading” increased by a whopping 50% in 2016, in a blatantly desperate attempt to slow gold’s and silver’s worldwide price rises, amidst an environment of serially collapsing fiat toilet paper. To wit, another 2,418 “commercial” silver shorts were added last week – nearly taking their cumulative short position “off the chart”; and another 23,700 gold short positions.
Seeing such data, many still wonder when “the bottom” will be hit. This, despite gold and silver prices having bottomed in dollar terms 16 months ago – ironically, the very day the Fed first raised rates – at $1,050/oz and $13.50/oz, respectively; and in non-dollar terms, well before that. To that end, Craig Hemke put it perfectly this weekend, in stating that in this case, “capitulation” has nothing to do with price, but sentiment. To wit, despite prices having bottomed in late 2015, PM sentiment has continued to plunge here in the States (i.e., the “Ground Zero” of price suppression); to the point that, despite rising prices, U.S. Mint bullion sales have plunged to nine-year lows.
Clearly, someone is buying a lot of gold and silver, or they wouldn’t have risen by 20% and 30%, respectively, from their lows. But equally clearly, someone is not the U.S. retail consumer – whose “sentiment” is at rock bottom; ironically, at a time of maximum global political, economic, and monetary risk. Heck, this month alone, we’re not only facing the prospect of a French political “nuclear bomb” – although for now, in true pre-BrExit and pre-Trump propaganda mode, the powers that be are trying to convince us a LePen victory is “impossible”; but wars in Syria and North Korea; a U.S. government shut down and “debt ceiling” crisis; and a 1Q GDP print approaching zero.
The Trump Administration is doing everything in its power to pretend all’s well – like promising “massive tax cuts” despite no financing or Congressional support; and a “new and improved” healthcare bill to try and fool America – and “Freedom Caucus” Republicans – into believing Obamacare can be “repealed.” However, the fact remains that such attempts – by Obama, Trump, and anyone else in power – are but smoke and mirrors, relying solely on unsustainable market manipulation to prove their “worth”; like goosing stock valuations to all-time highs, and suppressing Precious Metals to historic, inflation-adjusted lows.
For anyone “worried” that the post French “market” reaction presages a new phase of market ignominy, consider that despite the post-Trump-Election-like spin, last night’s PM “trading” was no different than any other. I.e., the 181st “Sunday Night Sentiment” raid of the past 191 weekends; followed by the 823rd “2:15 AM” raid of the past 942 trading days; prototypical “Cartel Herald” algorithm and all.
In this case, once and for all proving what I have long discussed about the comically fallacious propaganda regarding gold and silver prices’ relationship to the “dollar index”; which essentially, represents nothing but the exchange rate between the devaluing dollar and the disappearing Euro. To wit, said “dollar index” is down from 99.7 on Friday afternoon to 99.0 this morning, solely due to “relief” that the “nightmare scenario” of a Le Pen/Melenchon victory didn’t come to pass; or, for that matter, a more dramatically higher Le Pen vote tally. To that end, according to the relentlessly perpetuated propaganda meme, gold should be dramatically higher, right? I mean, “Trump-flation” calls for a higher dollar index and lower gold prices, right?
In other words, per my four “if a nuclear bomb destroyed Europe articles” – the latest, in February – anyone that tells you PM prices are correlated to “the dollar” are either ignorant or lying. Just as anyone who claims any single factor is responsible for PMs’ daily, rigged movements – like interest rates, oil prices, stock markets, the Yen/dollar exchange rate, or any other trading pair utilized in the Cartel’s ongoing “gold is whatever is down” manipulation scheme. To that end, this morning’s proverbial “nuclear bomb” hit the dollar; just as multiple “monetary warheads” will hit all worthless fiat currencies in the coming months; until inevitably, the Cartel’s dam breaks, justifying why we have PROTECTED ourselves with the only asset class proven, throughout five millennia, to preserve wealth.
If you hold physical gold and silver, sit back and relax – or perhaps, add to your positions; as like all of the Cartel’s increasingly futile attacks, this too shall pass. And if you don’t, what better time to use such a “gift horse” to initiate such an historically effective insurance policy, at such historically cheap prices?
Before I get started, I must recommend that this weekend, you listen to yesterday’s third installment of the Miles Franklin Silver All-Star Panel Webinar – hosted by myself, and featuring David Morgan, Steve St. Angelo, and Craig Hemke. Nowhere on the internet – much less, for free – will you receive such vitally important information about the world’s most undervalued asset class. And given the Cartel’s all-time high silver short position – amidst a veritable blizzard of potentially short-covering catalysts – there’s no better time to educate yourself of the TRUTH of silver’s historically tight physical market conditions; from, in my view, the industry’s most brilliant minds. And if it convinces you to buy or store silver, we hope you’ll call Miles Franklin – in our 28th year of business, without a single registered complaint – and give us a chance to earn your business.
As for said undervaluation, what more do the powers need to prove that they are doing everything in their power to subvert reality via market manipulation? To the point that historic bubbles – even when compared to 1929, 1999, and 2007; have been formed, that must inevitably collapse.
I mean, what part of unprecedented financial engineering and debt accumulation does a chart like this not get across – regarding just how close the world is to an unprecedented, fiat-currency-destroying disaster?
All Central banks are doing it – including the Chinese; who, since their “Eastern Point of No Return” realization two years ago, have been manipulating their own stock market – utilizing their self-described “national team” – with the same fervent regularity as the “President’s Working Group on Financial Markets” – i.e., the PPT – has in the U.S. since its establishment in 1987, just after Alan Greenspan was appointed Fed Chairman. Who, I might add, yesterday espoused that not only are socialism and stagflation here to stay, but the Euro currency is destined to collapse.
However, NOWHERE is such manipulation more blatant than in Precious Metals. Which, contrary to the relentless “barbarous relic” propaganda, are as vital to monetary stability today as they were 5,000 years ago. To wit, the aforementioned, unprecedented silver short position – despite no visible crisis to justify it; and subsequently, the gargantuan, historically blatant efforts to protect it, that just happen to coincide with gold’s and silver’s attempts to not only exceed their 200 week moving averages for the first time in four years (of $1,246/oz and $18.14/oz, respectively); but the “downtrend line” created by 5½ years of price suppression since dollar-priced gold was viciously attacked after hitting its all-time high in September 2011; in gold’s case, at roughly $1,285/oz.
This week alone, we saw gold attacked viciously on Monday – after a three-day weekend featuring not only Friday’s horrifying retail sales report (which caused the Fed to lower its 1Q GDP “growth” estimate to a two-year low of 0.5%, and money markets to no longer discount a June rate hike); but a dramatic escalation of geopolitical tensions in North Korea. As seen below, the Cartel attacked PMs at all “key attack times” – from the typical “Sunday Night Sentiment” capping at $1,295/oz; to the “2:15 AM” open of the London paper pre market; to the 8:20 AM COMEX opening; the 12:00 PM “cap of last resort”; and finally, the 2:00 PM “crybaby attack” time – when “Goldman Steve” Mnuchin was trotted out to say NOTHING incremental, as described in great detail in Tuesday’s Audioblog (scripted Monday night, out of sheer, unbridled anger).
Next, we had the back-to-back $3 billion “notional” paper gold dumps on Tuesday and Wednesday morning – as usual, just after the COMEX open, and just before the 10:00 AM EST London Fix; i.e., the #1 “key attack time” of the past two decades. The former, as interest rates were hitting their post-Election Day lows; and the latter, as the dollar index was doing the same; in both cases, as gold dared challenge its aforementioned 5½ year “downtrend line” at roughly $1,285-$1,290/oz.
And last but not least, yesterday’s monstrosities; when, after gold was again “Cartel Heralded” at the “2:15 AM” London paper market open; as it again challenged its 5½ year downtrend line – whilst silver was given the same “business,” as it again breached its 200-week moving average; we again saw both “waterfall declined” just before the 10:00 AM London Fix; and again at the 12:00 PM “cap of last resort.” No doubt, this afternoon’s COMEX “COT” report will be quite revealing; potentially, depicting an even larger silver short position than even last week’s all-time high level – which I assure you, will decidedly NOT make the Cartel feel “comfortable.”
And yet, after all that – as we head into this weekend, when the first round of France’s historic Presidential election is to be held – gold is again trading, as I write early Friday morning, right up against its 5½ year downtrend line; with silver just a hair’s breadth from again re-taking its 200-week moving average. Not to mention, interest rates are still barely above their post-Election Day lows; whilst the dollar, despite the prospect of Marine Le Pen moving one step closer to a “BrExit times 100” victory that could utterly destroy the Euro, is still below the key psychological level of 100. Throw in oil desperately clinging to the “oil PPT’s” year-long “line in the sand” at $50/bbl – this, after gargantuan efforts to convince markets that a “production cut” extension is likely next month – and you can see how the “Trump-flation” meme that was created as “cover” to attack Precious Metals, and support historically overvalued stocks, is rapidly dying.
As for the French election, I could of course be wrong regarding my staunch belief that Marine Le Pen will win; let alone, that April 23rd – i.e., Sunday – could represent a “turning point for the 99%.” This, despite her “betting line” odds of roughly 27%, being roughly twice what the (equally rigged) betting lines were assuming the BrExit’s chance of passing were to be morning it was voted upon; and similarly, Donald Trump’s chances on Election Day morning.
However, after having been through the BrExit and U.S. Presidential election spin (and rigging) cycles; not to mention, 2015’s Greek “OXI” and Catalonian secession referendums – both of which, were “predicted” to fail, but dramatically succeeded –we’ve all learned the powers that be’s’ “playbook,” of doing everything in their power to convince voters that voting against the establishment is a “lost cause.” In turn, voters have themselves realized how this “game” works; and that, no matter what efforts are undertaken, legal and illegal, to “influence” the result, the will of the people is still king. At least, in first world cultures like Greece, Spain, the UK, and the U.S. Frankly, the only such vote that was never in question was in Italy, where Matteo Renzi’s Constitutional Reform referendum was never truly considered – despite equally valiant propagandist efforts – likely to pass. More on that soon, when Italian “snap elections” are inevitably announced, setting up the potential for the “ItaLeave”-supporting Five Star Movement to seize control.
When I turned on my computer this morning, the litany of PiMBEEB headlines was so powerful, and broad, it became more difficult to envision a Le Pen defeat than ever – let alone, at the hands of a second rate, universally despised, Johnny-Come-Lately likely Emmanuel Macron. Most importantly, the worldwide stories of “99%” misery – in my view, caused by the horrific economic, social, and financial ramifications of history’s largest, most destructive fiat Ponzi scheme; which clearly, is amidst its malignant terminal stage. Such as…
America’s insomnia problem is even worse than before the Great Recession
More 18-34 Americans now live with their parents than a spouse
A quarter of millennial’s living at home neither work nor study
Subprime Auto – the next “Big Short?”
40% of Spanish Children live in poverty
Greeks need to start having babies again, or face financial oblivion
All I have is hunger – Many Venezuelans too weak to protest, despite Maduro misery
Retail sales data shows consumers cutting back on necessities of life
Neiman Marcus finds even wealthy shoppers want better deals
Trump says Paris terror attack “will have a big effect on the election,” as French police hunt second suspect
And most telling of all – as if Obama didn’t learn his lesson last year, when admonishing Brits to reject the BrExit or be put at the “back of the queue”…
In apparent sign of support, Obama calls Macron days before the election
Again, I could be wrong – but it won’t be until May 7th when we know for sure. Or perhaps Sunday night, although I’d guess the odds of Le Pen NOT making it through the first round – despite the French government overtly sabotaging her, by mailing two voting cards to the 500,000 expatriates most likely to vote against her – as slim to none. To the contrary, I think such blatant rigging efforts will only embolden her armies of supporters further – and trust me, if the smoke clears Monday with Le Pen as one of the two remaining candidates, said armies will feel as strengthened as the steam engine in Back to the Future III, after Doc Brown supercharges it with rocket fuel. And TRUST ME, if she does emerge as one of the top two candidates – which I strongly believe will be the case – the next two weeks will witness an equally supercharged level of market volatility, as market participants attempt to gauge where the roughly 50% of French votes that went to the losing candidates will be channeled on May 7th. Which, given the aforementioned all-time high Cartel silver short position; as both gold and silver fight to not only win the “200 week moving average” and “5½ downtrend line” wars; could make for some historically “interesting” trading.
Either way, the near-term fate of the European Union; the “Troika” that must “bail out” Greece this summer; and the Euro currency itself lies in the balance. And if France ignores its “last chance” for economic and cultural survival, the ramifications for one of history’s oldest, proudest nations will be catastrophic.
Even for me, the level of anger I felt Monday evening was historic – to the point that, after having awoken at 3:00 am, penned “April 23rd – a potential turning point for the 99%,” and proceeded with the remainder of a very busy day (wait until you hear the Future Money Trends podcast I taped), I scripted the vast majority of Tuesday’s must listen Audioblog #191. The reason being, that Monday afternoon’s Cartel attack was so egregious; following a weekend when not only did Donald Trump take us to the brink of a second war in two weeks – which as I write, remains eminently possible; but a dollop of heinous economic data was released. Particularly, the February and March retail sales reports; which, cumulatively, caused the Fed to reduce its comically overstated 1Q GDP “growth” estimate to 0.5%. In turn, causing the money market “odds” of a June rate hike – you know, the one that was all but “guaranteed” last month – to fall below 50%. And oh yeah, the benchmark 10-year Treasury yield – which I vehemently espoused would NOT go above 2.5% – when “traders” were taking all-time high Treasury short positions – to plunge to a post-election low of 2.25%.
And the “best” part of said attack – which occurred at exactly the time-honored 2:00 PM “crybaby attack” time; following prototypical “Sunday Night Sentiment”; “2:15 AM”; COMEX-opening; and 12:00 PM “cap of last resort” caps and/or attacks; was that it was predicated on such an unbelievably ridiculous premise – perpetrated by perhaps the least trustworthy person in government – it strains credulity to believe anyone could believe it. I.e., as discussed in the aforementioned Audioblog #191, former Goldman Sachs stooge; and purveyor of one of America’s great taxpayer-bilking scandals – Indy Mac; i.e., Treasury Secretary Steve Mnuchin, via completely ambiguous comments about his boss’s blatantly obvious strategy of jawboning the dollar lower – to the point that Trump is actually considering re-appointing Janet Yellen next year, as long as she promises to deliver a “weak dollar” and “low interest rate strategy.”
Overnight Monday, PMs regained most of their Mnuchin/Cartel catalyzed losses – whilst the dollar index plunged to 99.9 from the 100.3 level it closed at, below the key psychological level of 100.0 it was trading at when Mnuchin “coincidentally” was trotted out to provide cover for the gold Cartel to attack. Meanwhile, the 10-year yield had fallen further, from 2.25% to 2.22%, before Tuesday morning’s horrific Housing Starts and Industrial Production data; which cumulatively, contributed to the biggest U.S. “macro data index” crash in seven years.
Which is why what happened next made Monday’s Cartel attack appear trivial. When, mere minutes before the time-honored “key attack time #1” of 10:00 AM EST – i.e., the “London Fix,” when global physical markets close for the day; “someone” dumped $3 billion worth of paper gold on the COMEX, with the sole purpose of driving prices down. Driven by, no doubt, what I discussed at length in the prior day’s Audioblog. I.e., preventing gold from breaching the 5½ year “downtrend line” the Cartel has inadvertently created since dollar-priced gold “peaked” in September 2011.
That said, for the first time in my 15 years of tick-for-tick Cartel watching, prices actually rebounded – and did so quickly – enabling gold to close the day higher, and silver just modestly lower. That said, the $5/oz gold gain – which as you can see below, was again capped by the 12:00 PM “cap of last resort” algo – was pitifully modest compared to what it should have done, given that the dollar index ended the day at 99.5; and the 10-year Treasury yield, 2.17%. Stocks’ losses were of course capped by the PPT, but the end of the fraudulent “Trump-flation” propaganda meme couldn’t have been more obvious; particularly in the historically overvalued base metal space, where the post-election bubble was pricked pretty sharply; as copper, nickel, zinc, lead, and iron ore plunged by 2%, 5%, 4%, 6%, and 5.0%, respectively.
Oil, too, lost some of its ridiculous post-Syrian-attack gains (itself, based on what appears to have been at best a misunderstanding, and at worst a false-flag chemical attack); on the heels of yet another worse than expected inventory report. And oh yeah, the increasing likelihood that, contrary to the relentless B.S. put forth by an “oil PPT” desperate to facilitate Saudi Aramco’s proposed $100 billion IPO – and thus, maintain the solvency of America’s only remaining Middle East ally – OPEC will likely NOT extend its thus far completely ineffective “production cut” deal, when it meets next in month.
Moreover, as one scans the litany of financial market “alarms” going off yesterday – from exploding European sovereign bond spreads; to the Japanese 10-year bond yield again falling below zero; to the exploding Yen/dollar exchange rate that is “supposed to” catalyze plunging stocks (but didn’t, given the PPT’s 24/7 market “support”); it couldn’t be more obvious that the “Trump-flation” meme that was spun, propagandized, and lied about as the “reason” for gold’s post-Election plunge is dead. Heck, even Goldman Sachs itself – which owns Donald Trump – espoused yesterday that material tax cuts may not happen; and that, if any fiscal stimulus package is passed at all, it will be minor, with no impact even possible until late 2018. Which itself is an overstatement, given that – as I espoused in my “turning on Trump” Audioblog two days after the election, not only will Obamacare NEVER be “repealed and replaced,” but neither significant tax cuts nor a material fiscal stimulus package – neither of which, would have any positive impact even if they were enacted – are even remotely politically or economically viable. And geez, I taped that before Trump’s Presidency died a painfully early death – amidst a bipartisan firestorm that has deemed him a pariah just three months after Inauguration Day; to the point that, very likely, he is bombing half the world simply to gain Congressional “support.” Well, that, and to improve his historically low “approval” ratings.
Throw in the fact that the government will likely be shut down next weekend – potentially, over something as inconsequential, budget-wise, as $70 million of annual Planned Parenthood funding; with the worst debt ceiling crisis in U.S. history right behind it; and oh yeah, the first round of the potentially world-changing French election this weekend; and the concept of Precious Metal prices falling at all – let alone, in “waterfall” fashion – was that much more comical. And for extra “bonus credit,” here are some of the day’s “other” PiMBEEB headlines…
Plunging used car prices wreak havoc on rental car bondholders
Harvard study says each $1/hour minimum wage hike causes a 4%-10% increase in restaurant failures (which, my comment, is why this is occurring to the restaurant industry)
IBM tumbles after posting lowest revenue in 15 years, 20th consecutive quarter of declining revenues
Le Pen/Melenchon second round possible, per Deutsche Bank
Trump to crack down on visa “abuse” in “Hire American” Executive Order (my comment, horrible for tech company profitability)
The retail Apocalypse is creating a rolling crisis that is rippling through the U.S. economy (“retailers are closing thousands of stores and going bankrupt at a rate not seen since the Great recession, and tens of thousands of people are losing their jobs as a result”)
Greek debt must be sustainable for IMF to join bailout, LaGarde says (my comment – ROFLMAO!)
Obama, Comey relied on discredited dossier to obtain FISA warrant on Trump campaign (my comment – this couldn’t possibly destabilize American historically dysfunctional political system any further)
And then, of course, there’s this morning’s “doubling down” on the lies – with the Cartel again pushing PMs down (starting at – you guessed it, 2:15 AM); under the guise of yet another blatantly orchestrated Mnuchin interview. This time, with the virulently anti-gold Financial Times – in which he reiterates the lie that Trump’s weak dollar and low interest rate comments are NOT an attempt to jawbone the dollar lower. Which, as described in detail in yesterday’s Audioblog, is patently ridiculous – given that by definition, this is what Trump is doing. Not to mention, the net result, in each instance he has made such comments, of a plunging dollar. I mean geez, this is literally “page one” of the Keynesian Central banking playbook!
That said, consider that silver again bounced off its 200-week moving average of $18.14/oz; whilst gold, at $1,284/oz, remains $38/oz above its own 200 WMA of $1,246/oz. And FYI, the dollar index is barely higher this morning than yesterday’s multi-month low close of 99.5, at 99.65.
However, as usual, the biggest “lies; propaganda; and generally speaking, B.S.”; emanates from our own sector; and I’m not even going to go into the destructive world of “paper PM investments,” which were delivered yet another major blow this month, when the GDXJ ETF, which holds junior mining shares, experienced massive index underperformance due to its inability to hold major stakes in the companies it is purported to track. Starting with none other than “wrong-way” Harry Dent himself; who, despite being a brilliant economist, has perhaps the most abysmal investment track record imaginable; like predicting, in early 2014, with gold trading at $1,250/oz, that $700/oz was “a certainty” by 2015-16. Not to mention, his October 1999 prediction that the Dow, then trading at 11,000, would reach 35,000 within a decade – only to see it bottom out at 7,000 in early 2009, and end said “decade” at 9,000. And for “bonus credit,” his forecast that the S&P would plunge 30%-50% in 2012, only to see it rise by 13%.
Well, wrong-way Harry is at it again, making the same moronic gold forecasts as he seemingly has since the dawn of time – or at least, since it became apparent how lucrative subscriptions and books can be, when one makes dramatic predictions. To wit, yesterday’s reiteration that gold will fall to “$700 within a year or so”; and “ultimately, likely down to $400 or $450.” Of course, in true newsletter writer fashion, he “hedges” his bet by making sure he can claim to be “right,” no matter what happens – in espousing that “gold could bounce back just above the July 2016 highs of $1,373, to around $1,400 or $1,450.” But of course, “ANY bounce, no matter how high, would be a good place to get rid of any gold you’re still holding.”
Which sounds eerily similar to what he wrote in January 2014, when gold was also trading at around $1,250/oz; i.e. “in Q1 2014 or a bit later, gold is likely to go up, maybe back to $1,400/oz.; (but) when the crisis sets in, and we see debt deleveraging and banks in trouble, gold will smell deflation, and it will go down again, as it did in late 2008.” Of course, he conveniently ignores the fact that physical gold (and silver) prices barely budged WHEN THE CARTEL ATTACKED THEM in 2008, as the entire global bullion industry ran out of supply; and subsequently, roared back to new highs by early 2009, whilst the stock market continued to plunge.
And of course, “but there will be a drop to at least $700/oz in the next few years” – to the “certainty” of “around $700/ounce by 2015 to 2016”; with the added “possibility” of $250/oz by 2020–2023. Of course, the fact that he has been dead wrong on gold for so long; let alone, that amidst the largest fiat currency crisis in history; in an industry already suffering from major liquidity issues, and a dramatic long-term downtrend in mine production; the odds of $700/oz are essentially ZERO; let alone, $250/oz. As at those prices, there wouldn’t be any gold mining occurring, as the entire mining industry would be bankrupt.
Which brings me to my last “lie, propaganda, and B.S.” calling-out of the day. Which is, the comically inane supposition by an (albeit, very small) handful of “analysts” claiming there is a lot more gold in existence than the roughly 180,000 tonnes estimated by the industry’s leading researchers. Frankly, I can only think of two such “analysts,” both of whom arbitrarily claim that as much as 2,000,000 tonnes exists – which ironically, would still make gold wildly undervalued, given how much fiat currency has been printed, both overtly and covertly.
In both cases, they rely solely on conspiracy theories so wild, they at best strain credibility. Like, for instance, that a massive hoard was discovered in the Grand Canyon a century ago, simply because a mining promoter made such a claim; which, after 100 years, not a shred of evidence exists to corroborate. Let alone, the common sense that tells us that when major sources of gold are found, they get mined, and sold. And by the way, one of those two “analysts” is a woman with not a shred of credentials in the mining industry or financial world – who just happens to strongly believe (see here) that aliens rule the Earth.
That said, it doesn’t matter what they believe – as in the big picture, it is what you believe that matters. And fortunately, if one uses simple logic, they’ll realize that 2,000,000 tonnes of above ground gold is not just unlikely, but impossible. Not to mention, that if it did in fact exist, it’s not like those owning it would be talking about it.
Thankfully, a few actual financial analysts still remain on the planet – myself included, even after leaving Wall Street career 12 years ago (although I steadfastly maintain my CFA accreditation). And in the Precious Metals space, Steve St. Angelo of the SRS Rocco Report is one of the best; who, I might add, will join David Morgan and Craig Hemke as the distinguished panelists in tomorrow’s – as usual, FREE to the public – “Miles Franklin All-Star Silver Panel Webinar, Part III.”
To wit, this must read article from yesterday, titled “conspiracy versus fact – how much gold is in the world?” In which, Steve refutes, with plain “Spockian” logic, every imaginable conspiracy theory regarding the amount of historically mined gold supply. Frankly, no further commentary is required here – as after reading it, it will be crystal clear that if there’s more than 180,000 tonnes above ground (the vast majority of which, is in “strong hands” that may never sell), it’s not much more.
Hopefully, today’s “all-out assault” on lies; propaganda; and generally speaking, B.S.”, will help you to more accurately carry out your personal financial due diligence. As usual, the Miles Franklin Blog provides it for FREE; with the one request, that if you are considering the purchase, sale, or storage of Precious Metals, you give us the opportunity to earn your business.
The Vancouver Natural Resource Symposium is a dynamic event to attend—and be a part of. We invite you to join us and you’ll be rubbing shoulders with high-net-worth, like minded individuals whose collective knowledge is considerable. Andy Schectman will be addressing the general session and hold a special workshop. Please call our office for more details. For travel details, please contact Opportunity Travel and mention that you are a Miles Franklin client. 1-800-822-8080 email us