As widely expected, the IMF “allowed” the Chinese Yuan into its basket of fiat garbage currency yesterday. Thus, an organization where the U.S. has by far the largest vote, officially recognizes the (dollar-pegged) Yuan “elite” enough to be given an 11% weighting in a basket of trash currencies no one wants – compared to the 40% weight afforded the dollar. In other words, completely meaningless – just as I espoused when many were claiming it would be an event that would change the world, and destroy the Cartel. No, the Cartel’s demise, as inevitable as it is, will decidedly NOT occur by its own hands – at the Fed, the CFTC, or otherwise. Moreover, as vehemently predicted in May, when said “IMF/Yuan” buzz commenced, the announcement did not catalyze China to disclose the true amount of its massive gold hoard. To the contrary, China is – ironically – too busy devaluing its newly anointed toilet paper currency, in the early stages of the “cataclysmic financial big bang to end all big bangs” – which I predicted to the day – that will only serve to destroy global economic activity, and currencies, at a hyper-accelerated rate. Which indeed it has – per these graphs of what has occurred since that faithful day in early August.
China did, of course, lie through its teeth a month earlier; when on Friday, July 18th – “coincidentally,” two days before the now-infamous “Sunday Night Paper Massacre II” raids, which sparked the broadest retail silver shortage since 2008 – it claimed to have increased its gold reserves from the last-updated figure of 1,054 tonnes of April 2009, to a still-piddling 1,658 tonnes. Which, I might add, it has since quietly increased by 10-20 tonnes each month since – such as yesterday’s announcement that it added 14 tonnes in October, bringing the total to 1,722 tonnes. However, I assure you, the Chinese government has no interest in sparking an international currency – and by proxy, economic; financial; and perhaps military – incident by announcing what it really has, until forced by “Economic Mother Nature” and the “unstoppable tsunami of reality.” Trust me, the current Chinese government will not survive such a cataclysmic currency event; and thus, the more logical course of action is to continue buying as much as they can, as quietly as they can, until there’s nothing left to buy. Which, based on the mosaic being exposed to the entire world as we speak, will likely be far “sooner” than “later.”
What mosaic, you ask? Well, seemingly each day – for years – the Miles Franklin Blog has been highlighting the relentless data – both anecdotal and empirical – suggesting surging, record-high physical gold and silver demand; plunging above-ground inventories; and a collapsing production outlook – likely, for years to come. However, in recent weeks – “coincidentally,” as paper prices have been put through their most brutally unrelenting suppression in the 13½ years I’ve been watching – the flow of such wildly bullish supply and demand data has easily been the most intense I’ve seen. Let alone, as global Central banks have stair-stepped the “final currency war” to new heights of hyper-inflationary lunacy – such as, for instance, what the ECB is likely to launch two days from now.
For instance, yesterday’s news that here in America, where decades of fiat brainwashing have most citizens believing Precious Metals are “barbarous relics” – the U.S. Mint has already exceeded last year’s record level of Silver Eagle sales, with a full month of sales remaining. Simultaneously, the CRIMEX COMEX paper exchange – where global gold and silver prices are essentially set, despite little physical metal actually changing hands – reported that its registered (available for delivery) gold inventory plunged by 11% overnight, to a record-low level of just 134,000 ounces; i.e., four tonnes, worth the “rounding error” of just $143 million. Which, I might add, is barely a quarter of the still-paltry fourteen tonnes the Chinese government claims to have purchased in October alone.
As you can see below, the COMEX’s registered gold inventory – assuming it even exists – has been depleted by 96% since peaking at 3.35 million ounces, just after the Cartel went all-in suppressing “dollar priced gold” when it achieved an all-time high in late 2011. Which by the way, pushed the COMEX’s open interest/registered inventory ratio to a new, parabolically rising high of 298:1. And by the way, it’s no coincidence that the largest inventory plunge during this four-year period was immediately after the “alternative currencies destruction” raids of April 2013, commencing the day after the infamous “closed-door meeting” between Obama and the top “too big to fail” bank CEOs. Which, I might add, unleashed a retail silver shortage nearly as acute as the one experienced this summer. To wit, whilst the third quarter of 2015 was Miles Franklin’s strongest in 26 years in business, May 2013 was easily its strongest month.
For that matter, under the same “for what it’s worth” category (regarding government-reported Precious Metal sales and inventory data), yesterday’s COMEX “COT” report for the week ending Tuesday, November 24th depicted the fourth straight week of massive “commercial” short-covering – cumulatively, 153,000 contracts worth $16 billion. Which, as it turns out, not only reduced said “commercials’” short position to its lowest level since 2001, but put it right on the cusp of turning positive. Assuming said data is true, will they actually go long for the first time since the gold bull market commenced 14 years ago? And if so, why now? Could it be the record low prices, in inflation-adjusted terms? Or the aforementioned record demand, vanishing inventories, collapsing production, and exploding money printing? I don’t know, and won’t speculate on what will happen in the short-term in an historically rigged market. But again, for what it’s worth, when the Cartel’s short position last fell this sharply – in early August – the gold price simultaneously bottomed, surging $100/oz thereafter. Oh well, I guess we’ll just have to wait and see what happens.
As for today’s “news,” we’re still awaiting news as to whether “Cyber Monday” retail sales were as miserable as those of the “Black Friday” weekend – which cumulatively, were a whopping 10% below last year’s level; which itself, was the weakest holiday spending season since the 2008-09 financial crisis. Either way, as Peter Schiff so beautifully described in his most recent podcast, the fact that the only growth seen has been online is an extremely ominous trend; as 1) weakness in brick-and-mortar sales will likely yield an onslaught of layoffs following the holiday season; and 2) online sales typically have far higher merchandise return rates. In other words, when all is said and done, even the historically ugly retail sales numbers posted thus far are likely – like essentially all U.S. government-generated economic data – to be revised sharply downward.
Meanwhile, the unprecedented, Central bank and Wall Street-fostered commodity collapse is only accelerating – en route to a global “default party” that will make 2008’s mortgage collapse appear like, in Han Solo’s words – “dusting crops.” To wit, the “oil and copper PPT’s” latest forays are decidedly failing; and in the latter’s case, the price outlook for the world’s “most important commodity” is likely to take a sledgehammer to the head following this Friday’s historic OPEC meeting. At which, if collapsing economies like Saudi Arabia are smart, they will state their intention to continuing pumping as much oil as possible; to destroy its high cost competition – like U.S. shale, financed by $500 billion of collapsing junk bonds and “leveraged loans”; and pay their rapidly escalating bills.
And something tells me that the rapidly escalating, potentially world war in Syria isn’t going to help prices much – even after the UK and Germany join the U.S., Russia, France, and Turkey with “boots on the ground” next week. Of course, if a major war does break out – which, with each passing day, appears more and more likely, even “rising oil prices” would be meaningless, compared to the cumulative global economic collapse that would ensue. Let alone, the guaranteed hyperbolic explosion of Central bank money printing. To that end, as I asked yesterday, would the Fed really be “that stupid” – to raise rates, even a smidgen, amidst the “worst global economy off our lifetimes”; exploding geopolitical tensions; the most overvalued financial markets in history; and an environment of historic, expanding, global currency collapse.
Perhaps they are; as unquestionably, their cumulative egos are as large as their fear of the all-out loss of credibility we all know is coming; after which, not only will NOTHING they say or do matter; but the entire world will gleefully assume the opposite effect. As they rightfully should, based on the Fed’s historically horrific economic and monetary track record.
However, just as “Economic Mother Nature” is destroying their best laid plans essentially everywhere – other than, for now, “last to go” markets like the “Dow Jones Propaganda Average” and paper Precious Metals; inevitably, and perhaps imminently, they will lose control of everything; and in the process, be lucky to avoid abolition, let alone millions of angry citizens’ pitchforks. And no statement I have seen demonstrates how hopeless the Central bankers’ predicament has become than yesterday’s “quote we’re about to hear a lot more of” – from South African Central bank governor Lesetja Kganyago, as the currency of his dying “BRICS” nation hits all-time low after all-time low. I.e, “no amount of Central bank intervention can stem market-driven Rand moves.”
Which unquestionably, countless other Central bankers, PPT operatives, and Treasury officers have been saying behind closed doors for years. And equally unquestionably, “last to go” market manipulators like America’s “President’s Working Group for Financial Markets” and “Exchange Stabilization Fund” will do so as well, when said “unstoppable tsunami of reality” inevitably swamps them as well. And with them, history’s largest, most destructive fiat currency Ponzi scheme, and the gold and silver Cartel that’s enabled it. After which, the world will likely become, in short order, a very scary, dangerous place – in which, without a stash of physical gold and/or silver, your chances of financial survival will be greatly diminished.
P.S. As I’m editing, U.S. November auto sales just plunged into oblivion – led by the Chinese market, where “demand is plunging; sales collapsing; and inventories soaring.” As did the U.S.’s ISM Manufacturing Index and Canadian September GDP figures, both deeply in recessionary territory! But don’t worry, the Fed is getting ready to “raise rates”; and “smash gold.”