Yes, it’s 4:30 AM on Saturday morning. I’ve just returned from a thoroughly relaxing vacation in Mexico – my first in years – and my “to do” list is so long, I’m back on my 4½ hours per night sleep schedule. Then again, when you love doing your job as much as I, and receive so much positive feedback from it, the thrill of communicating can be a powerful motivator. Which is probably why, vacation and all, I found a way to put out an article each day this week but one.
Then again, the week was chock full of major, “PM bullish and everything else bearish” news; and as the title of today’s article suggests, major “manipulative failures,” en route to the rapidly approaching end game of worldwide currency collapse. Let alone, news that yet another of Miles Franklin’s major competitors, whose growing list of client complaints should have served warning of the dangers of dealing with cut-rate bullion dealers – the Northwest Territorial Mint – filed for bankruptcy over the weekend, with hundreds of clients’ funds in their possession.
To start the week, we witnessed the ominous “Panama Papers” release – in which the “powers that be’s’ obsession with controlling – and perhaps, confiscating – cash was displayed for the entire world to see. Long time readers know I try to avoid commentary on such “conspiracy theory” topics, given that there are no indisputable facts as to exactly who was behind them, or exactly what their motivation was. However, it’s safe to say that in this case, whoever it was – and clearly, it emanated from Western World “leaders”; and whatever their specific motivation; it bodes threateningly to the finances of billions of innocent, fiat-currency holding citizens the world round.
As the week progressed, the rolling over of the PPT-orchestrated, quantitatively proven “biggest short squeeze ever” noticeably accelerated – in terms of financial markets, economic data, and foreign exchange volatility – the latter of which, exploded to a level not seen since the summer 2011 crisis. You know, when financial markets were imploding, the U.S. government was stripped of its (ridiculously undeserved) triple-A credit rating; and oh yeah, dollar-priced gold reached a record high $1,920/oz; with silver not far behind, at $45/oz. At a time, I might add, when global debt was at least 20% less than today; the Fed’s QE3, Japan’s Abenomics, Europe’s negative rates, and the PBOC’s all out war on monetary deflation had even begun; and Precious Metals demand was dramatically lower than today – particularly, silver; whilst above-ground inventories were dramatically higher; and mine production still rising.
Notwithstanding yesterday’s ridiculous oil price “rally” – based on NOTHING but the “oil PPT” desperately trying to rescue an industry on the verge of financial annihilation, it was a week of high profile manipulative failures, across the board. As for oil, trying to boost the price above $40/bbl as tankers literally line up the world round looking for buyers; with the upcoming April 17th “production freeze” meeting sure to be a failure (as evidenced by Iran, yesterday, dramatically undercutting OPEC’s price deck); amidst record inventories; and economic activity so weak, the Fed announced yet another “emergency meeting” on Monday (as in, NOW); will be quite a tall order. Let alone, as oil’s “rally” has occurred amidst the freefall of essentially all other commodities, as evidenced by the CRB index plunging from its pathetic, “dead cat bounce” high of 179 two weeks ago to as low as 165 on Tuesday, before rising back to 171 yesterday, solely due to crude oil.
In fact, if you’re wondering why such high profile bankruptcy risks like Deutsche Bank and Glencore were plunging anew, look no further than “Dr. Copper” – or as I deemed it two years ago, when it was still trading at $2.95/lb, versus $2.12/lb today, “Dr. Death.” Copper’s “dead count bounce” – amidst exploding inventories, as depicted here, literally defines “ill-fated.” To wit, after plunging from $4.50/lb in – what do you know, the aforementioned summer of 2011 – to $1.97/lb two months ago, it “miraculously” bounced back to $2.30/lb two weeks ago, via the same “forces” pushing stocks, high yield bonds, and crude oil higher, despite hideous, across-the-board, global economic data. Well, yesterday it closed at just $2.11/lb, joining nearly all base metals at or near multi-year lows, in an ominous snapshot of what’s to come.
And “what’s to come” couldn’t be uglier, if (rigged) data from the so-called “strongest” economy, the United States of Fraud, is correct. Such as the Fed’s “GDP Now” calculation; which, after having started the year projecting nearly 3% first quarter “growth,” is down to just 0.1% as of yesterday. To that end, you name it, and the data was horrible, horrible, horrible. Inventories, consumer spending, auto sales, international trade, corporate earnings, and factory orders this week alone, with nothing but the same anticipated as far as the eye can see – both here and oversees. Which is probably why New York Fed President Bill Dudley, just two days ago, essentially ended the pathetically obvious propaganda scheme regarding 2016 “rate hikes,” in espousing “although the downside risks have diminished since earlier in the year, I still judge the balance of risks to my inflation and growth outlooks to be tilted slightly to the downside.”
No wonder the U.S. 10-year Treasury yield is all the way back down to 1.72%; 65 basis points below when the Fed, LOL, “raised rates” in December, and a mere 25 basis points from its all-time low. To that end, global interest rates, cumulatively speaking, hit a new all-time low yesterday, as the movement toward hyperinflationary negative rates accelerates – whilst “cash banning” salvos like the Panama Papers blaringly warn people of what will happen if they keep their hard-earned savings in the banking system, let alone in hyperinflating fiat currencies.
Of course, the week’s biggest manipulative failures involved the Yen and Precious Metals; the former of which, is annihilating thousands of institutional investors, who for years have been piggybacking the Central bank’s monstrous “Yen carry trade” bubble – as the Yen continues to surge, no matter how much the BOJ tries to destroy it. Which – how about that, I forecast in my “2016 predictions,” under the assumption that 2016 would be characterized by the nuclear stage of the “final currency war” I first discussed more than three years ago. And trust me, the carnage it is causing is unfathomable – which is probably why financial stocks are again under tremendous pressure, particularly in Europe. And by the way, if you think Central bank lunacy has been bad thus far, just wait until you see what occurs in the coming months – particularly in the “Land of the Setting Sun,” when Abenomics responds to horrific economic news like this by taking rates below the ECB’s negative 0.4%.
And last but not least, Precious Metals continue to defy some of the most blatant manipulative pressures yet, by continuing to rise amidst the aforementioned equity and commodity carnage. Not to mention, the daunting “COTs” that I have vehemently discussed as a factor to not be feared; but to the contrary, ignored. In fact, as silver rose strongly again yesterday – on the heels of the Sprott silver funds’ first secondary offering in five years, which I yesterday deemed a “major blow to the Cartel” – the weekly “COT report” confirmed a second straight week of massive Cartel covering of its paper silver shorts, after having decidedly failed to push prices down, amidst its largest concentrated silver short surge since the silver bull market commenced 15 years ago.
Regarding the Sprott offering, the $75 million raised (likely $86 million, when the overallotment option is inevitably exercised), and immediately used to buy physical silver, was somewhat less than I had hoped, and well below the “PM institutional demand heyday” of 2008-2011. However, being the first of its kind since 2011, it clearly evidenced that the institutional demand I first discussed in February has indeed returned – not just in bullion closed-end funds, but ETFs and mining shares as well. And returned with a vengeance it unquestionably has, joining already record levels of Central bank and retail bullion buying – as evidenced by Stanley Druckenmiller, a noted mainstream hedge fund operator, putting 30% of his personal portfolio into gold; and Munich Re, one of the world’s largest re-insurance companies, hedging its financial holdings with physical gold, to name a few examples. In other words, I fully expect said “COTs” – and with them, Goldman Sachs ill-fated “short gold” call of February 16th, when it was trading at exactly $1,200/oz – to be amongst the year’s – and perhaps, the centuries’ – biggest “manipulative failures” of all. In the “bigger picture,” of course, the biggest manipulative failure of all time will be Central banks ill-fated attempt to establish a worldwide fiat currency standard – which unquestionably, will be the most spectacular financial failure of modern times.