Long-time readers know I am the ultimate Star Wars fan. In my view, George Lucas is the Albert Einstein of movie-making; and joining with Disney has only made the franchise stronger. One of my favorite Star Wars creations is the recently completed, seven-season animated serial “Star Wars-Clone Wars” – of which, I woke up Sunday morning at 3:00 AM to watch the final seven episodes.
Star Wars’ creators clearly have very strong political views – in my view, quite similar to the majority of Miles Franklin Blog readers. They, too, fear the power, ruthlessness and corruption of big government; and equally so, its ability to influence constituents with propaganda – as exemplified by this memorable scene of Senator Amidala averring “so this is how liberty dies…to thunderous applause.” Ironically, life does in fact imitate art in countless situations. Thus, to say the world – particularly, the viciously controlled financial markets – are amidst an epic battle of good versus evil, does not necessitate even a modicum of hyperbole. I wrote of this two years ago in “Gold Wars”; and today, more than ever, believe the “evil Empire” is under siege by its minions in a war it cannot win. History tells us fiat currencies cannot mathematically survive; and this time around, no matter how powerful TPTB’s weapons of money printing, market manipulation and propaganda will be no different. Thus, whilst this Ponzi scheme’s end game will be horribly painful, we are eminently hopeful of what the “other side” will bring – when the good that is physical gold and silver reclaims its throne as the “once and future king” of the monetary realm.
We strongly maintain our view that said “end game” has commenced, and Friday’s pathetic manipulative countermeasures accomplished painfully little. “Technicians” will call it a “dead cat bounce” – but frankly, given last week’s carnage, said bounce was pitiful, particularly as it had nothing to do with “technicals” but a flat out PPT/Fed/Cartel attempt to end an atrocious week on a positive note. Friday’s stock gains have largely been reversed; and led by Europe – where ironically, the ECB’s QE program commenced this morning, stocks are plunging anew. Commodities and Treasury yields are falling as well, with the benchmark 10-year Treasury yield back down to 2.16%, en route first to last week’s 1.9% low – and thereafter, Japanese and German-style levels below 1.0%.
As for the Cartel, just how obvious could Friday’s DLITG or “Don’t Let it Turn Green” algorithms have been? This morning, prices have reversed as well, with gold back up to the past month’s $1,245-$1,250 “line in the sand” range – preparing for its inevitable explosion into the realm of valuation reality. As for silver, if anyone still has any lingering doubts as to where it should be trading, look no further than last week’s extremely enlightening “Miles Franklin All-Star Silver Panel Webinar.”
As for “news,” the hits keep coming. On Friday, China announced its third “backdoor QE” program of the last two months – this time, to the tune of $32 billion. Today, the ECB commenced its “whatever it takes” QE program, despite the head of Germany’s Bundesbank saying flat out that it won’t work! Here in the United States of Economic Lies it was reported Friday that “consumer confidence” – at least, according to government generated propaganda – hit its highest level since July 2007. No really, I mean it! The government actually claims that despite collapsing corporate earnings – such as this morning’s IBM catastrophe; imploding retail sales, industrial production and labor participation; record low Presidential and Congressional approval ratings – just two weeks before the mid-term elections, no less; ISIS; Ebola; the Cold War; the California drought; a rapidly vanishing real estate market; record high consumer debt; record low consumer savings; and a four-decade low in real median income, consumers are as “confident” as at the top of the 2003-2007 real estate and equity bubbles. Too bad the government doesn’t realize fear has never been higher; which in my 25 years of market experience represents the polar opposite of confidence. Of course, now that the government is proposing that its insolvent mortgage arms, Fannie Mae and Freddie Mac, should loosen their lending standards, I’m sure “confidence” will skyrocket further.
Yes, the gap between economic reality and manipulated markets has never been wider – well, perhaps it was a week ago – as exemplified by the below chart. By the way, does it surprise anyone that the largest component of the most widely-watched global equity index – the “Dow Jones Propaganda Index” is the world’s largest credit enabler, Visa? And in second place – following this morning’s IBM cataclysm? None other than the greatest criminal enterprise the world has ever known – Goldman Sachs!
Anyhow, as the “ides of October” continue careening said manipulations toward their inevitable hideous ends, don’t forget for a second that “as QE goes the market goes with it.” Ultimately, markets will run screaming from increased QE – as appears to be occurring in the doomed continent of Europe as we speak. But until that time – likely, sooner rather than later – Central banks will do everything in their manipulative power to milk the system of every last drop of wealth and “kick the can” one more mile. Frankly, I can’t wait to see Whirlybird Janet attempt the “two step” at the FOMC’s October 29th meeting – just six days before the mid-term elections, and likely, amidst the ugliest financial and market environment since the 2008 crisis.
Remember, it’s not our opinion that the global financial system will collapse but a mathematical fact. And whilst we hold out hope for mankind’s adaptive ability, it won’t matter a whit until we get to the “other side” of currency collapse. In this case, “good” will certainly trump “bad” when fiat currency is destroyed; and conversely, gold and silver re-emerge as critical monetary assets. However, if you don’t hold them before the end game commences, you may NEVER be afforded another opportunity to protect your assets. And for those wise enough to act, we hope you’ll give Miles Franklin a call at 800-822-8080 and give us a chance to earn your business!