At this point, we’re not sure if it’s more astounding how rapidly the global economy is unraveling or how much worse TPTB are making the situation through their incessant, counterproductive interventions. To wit, in 2012’s “Anti-Midas Touch,” we wrote of how “whatever governments touch turn to lead”; and NEVER in our lifetimes has this “rule of thumb” been more accurate. Just reading this weekend’s news that the Eurozone has agreed to sanction Russia’s “big three” energy producers, just three months before the onset of winter, when more than a quarter of their natural gas is imported from Russia; one can only wonder if these people are truly that foolish or alternatively seeking a war to deflect the attentions of an angry, desolate population? History tells us to bet on the latter scenario, adding another layer to the argument of why precious metals have NEVER been more valuable.
Speaking of Russia, it took one day for Friday’s ballyhooed “cease fire” to be violated – as said sanctions were leaked as early as Friday night! And heck, that wasn’t even Friday’s worst news – as even I am still reeling from the horror that was the August NFP report. Yes, even on the “island of lies” – where the world’s only “better than expected” economic data emanates from fraudulent U.S. “diffusion indices” and “jobs data”; the best the BLS could produce was 142,000 jobs versus the 230,000 estimate – including 102,000 phantom “birth/death model” jobs and a whopping zero manufacturing jobs. Not to mention, a new 35-year low in the Labor Participation Rate in which 34% of workers are considered temporary workers – and who knows how many are part-time minimum wage. Thus, soundly validating Whirlybird Janet’s most pressing fear – of “significantly underutilized labor resources.” It was just two weeks ago when she emphasized such fears at Jackson Hole; and after Friday’s NFP report, it should now be crystal clear the aforementioned “diffusion indices” and “jobs data” don’t have the slightest correlation to actual economic activity. And yet, in a world commandeered by Central banks, this is how stocks were programmed to react – per top MSM lackey Yahoo! Finance’s top story.
Simultaneously, precious metals were capped with another prototypical “Cartel Herald” algorithm (green line); just as a day earlier (red line), when the ECB announced its historic decision to commence a $1 trillion QE program in October. Then again, with last week’s bombshell news that Central banks are active participants in precious metals futures trading, why would anyone expect otherwise? Even the CME is now blatantly boasting governments and Central banks are “customers”; and thus, as Zero Hedge so eloquently put it, “what’s the point of even hiding it anymore?”
According to the clueless financial media, stocks surged to record highs due to a belief the Fed, contrary to the overwhelming consensus, will delay raising rates. Too bad no one’s listening, as CNBC’s ratings just hit a 21-year low last month; as at some point, people simply stop believing the propaganda – especially when Fed governors like Minneapolis’ Narayana Kocherlakota publicly aver U.S. interest rates are “not low enough.” So let’s get this straight. Rates have been held at ZERO for six years with no hopes of being raised in the foreseeable future. And yet, rates are not low enough? I guess that means “NIRP” is coming soon, at which point that “barbarous relic” gold will yield more than the dollar. Then again, given the massive amount of new bank fees being levied, most bank accounts are already yielding negative rates. And in no place is this state of affairs more prevalent than in the below, horrifying ad of an Australian bank offering foreign currency deposits in eight different countries – all at yields of 0.0%!
Meanwhile, Japan reported this weekend that its initial estimates of 2Q GDP, capital spending, personal consumption and trade deficits were grossly overstated, yielding a yen plunge to new six-year lows, as the world ramps up its expectation of “Abenomics to Infinity.” The Nikkei, of course, rose on this horrific news whilst gold was treated to its 64th straight “Sunday night Sentiment” raid and 293rd “2:15 AM” EST attack of the past 330 trading days. As we wrote in last week’s “Sixth Sigma Precious Metals Manipulation Proof,” Cartel machinations have become so dramatic in recent months, it’s almost as if they’re begging the physical market to explode. To that end, the latest accompanying “meme” goes like this. As the U.S. is expected to wind down QE (though keeping rates at zero indefinitely), whilst Japan and Europe accelerate it, this should cause the dollar to “strengthen” – and thus, put pressure on precious metal prices (despite already trading below their costs of production, amidst the most bullish fundamentals of our lifetimes). First of all, we cannot emphasize enough that how “the dollar” trades in foreign exchange markets does not connote its “strength” or “weakness” of which the only true measures are its purchasing power versus real items of value, of which NO ONE can argue any trend other than profound weakness. And secondly, how can massive QE programs – which logically, cause citizens to buy precious metals – in nations where, cumulatively, 900 million citizens live not offset supposed PM demand reductions in a nation where just 300 million live?
Meanwhile, it emerged over the weekend that for the first time, polls are expecting Scotland’s September 18th independence referendum to end with a “yes” vote. The British Pound is plunging as such a scenario would careen the UK into chaos for years to come – and likely, the entire European continent. To that end, currency volatility has become so virulent since the Central banks’ money printing group commenced in 2008, it’s a wonder any business can efficiently operate anymore. Which is probably why global capital expenditure investment has been plunging for years – in many places, to multi-decade lows. But don’t worry, what could possibly go wrong as long as worldwide “PPT teams” are working 24/7 to whitewash reality – and in the process, enrich the very “1%” that destroyed the world in the first place at the expense of “the 99%?”
I could go into a swing of other “rapidly unraveling” topics – from Obama’s expanding war against ISIS, to the catastrophic California drought, utterly abysmal housing statistics (you know the sector the government itself admits to being the largest economic “growth segment’), Congress’ latest brainchild, the “Access to Affordable Mortgages Act”, new bank capital rules that exclude many municipal bonds from the top tier capital category or our newly reported record manufacturing deficit.
I’ll want to simply remind you that as fiat currency, by definition, is a Ponzi scheme, the below trend will only accelerate into the foreseeable future – until inevitably, likely sooner rather than later – it collapses with a force never before seen in financial history.
And thus, if you have not used today’s once-in-a-lifetime opportunity to protect yourself from this inevitability – for not only your own sake, but that of your heirs; all we can say is this – what are you waiting for?
It is getting worse by the day, the hour, the minute, and the second.
The Ponzi scheme is like a person who is drowning – will fight for breath until death. I think the fiat death is fairly close at hand.
It’s going to be very cold in Europe this winter!
The 99% have a very bad surprise coing soon.
In summary it is all FUBAR !!! (A term we use to use in public accounting when we didn’t want our clients to know what we thought of them)
Scary to think the European beaurocrats are playing with 700 million European lives.
Andy great article. I appreciate all your good work in exposing the truth in this maddened world of finance and money. Keep up the great work.
Nothing to worry about… sub-prime lending has returned in the auto and credit card industry for the unfortunate credit deprived to buy new cars at 72-84 month terms and just in time to purchase unaffordable holiday trinkets. Who needs gold and silver when you can finance forever and continuously live beyond your means?
I don’t know rather to laugh or cry at the blatant ignorance of the average american.