Following up this week’s “historic market manipulation is setting the stage for catastrophe” theme, here’s how the U.S. PPT/Fed/ESF and the Chinese “national team” responded to dramatic, across-the-board PiMBEEB headlines yesterday. In the U.S.’s case, a dramatic plunge in April construction spending; a May autosales “bloodbath; the downgrade of Illinois to one notch above junk status; and plunging commodities, particularly crude oil. And in China’s case, a dramatic plunge in its May PMI Manufacturing Index, to a recessionary 49.4 reading. Yes, the good old fashioned “dead ringer” – which has been propping the “Dow Jones Propaganda Average” for at least five years; and in China’s case, the two years since the Shanghai Stock Exchange crashed, prompting China’s government to have their own “point of no return” moment – after which, they started manipulating all markets, all the time.
Conversely, mere hours after publishing “ultra-bullish trends in the 5½ year downtrend line war,” Precious Metals did something I literally haven’t seen in years. I.e., come all the way back from steep, Cartel-orchestrated early morning losses to end “strongly” – which I put in quotes, as gold ended up a whopping dollar; whilst silver, which at one point was down nearly $0.30/oz for absolutely no reason other than Cartel naked shorting, ended down $0.01/oz, after being maniacally “DLITG’d,” or “don’t let it turn green’d,” in the day’s final moments. Which the crybaby Cartel of course “fought back” against with a stronger than usual “sixth sigma manipulation proof” raid in the one-hour, ultra-thinly traded “aftermarket,” from 4:00 to 5:00 PM EST; and of course, this morning’s 848th “2:15 AM” raid of the past 968 trading days, leading up to today’s LOL, “all-important” jobs report. Still, die-hard Cartel watchers like myself take note of such things; as trust me, yesterday’s “unusual” PM rebound – as in, the type of thing that hasn’t occurred in at least a decade – meant something.
In this case, it clearly meant inside information of today’s jobs report; which just came out – and frankly, was an unmitigated disaster. Disaster, to anyone that still believes the economy is “recovering” – let alone, expanding; anyone still pretending there’s a such thing as “Trump-flation,” now that the economy, interest rates, the economy, the dollar, and Trump’s campaign promise hopes are simultaneously plunging; and most importantly, a Cartel running out of “ammo” to hold Precious Metal prices at their lowest-ever inflation-adjusted prices, per the principal topic of today’s truly all-important article.
Just 138,000 “jobs” were created in May, versus the “consensus estimate” of 185,000. Not to mention, yesterday’s comically ridiculous ADP jobs number of 253,000 – which frankly, may have put the final nail in the coffin of credibility ADP should never have been given in the first place, due the massive downward revisions its reports typically require, and absolutely ZERO correlation with the BLS’s equally useless reports. And not only did the 138,000 “jobs” – which I put in quotes, because the BLS literally fabricates such numbers out of thin air – come in way below estimates, but they included a 230,000 job birth/death model gain, despite the fact that more small businesses have died since the 2008 crisis, than have been “birthed.” And, I kid you not, a loss of 367,000 full-time jobs. Worse yet, April’s “better than expected” 211,000 job number was revised to just 174,000; whilst March’s 79,000 job fabrication gain was revised down to 50,000.
Next, there’s the horrifying “details,” like the LOL, decline in the “unemployment rate” from 4.4% to a fresh decade-low of 4.3%, solely due to a plunge in the labor participation rate, from 61.9% to 61.7%; i.e, barely above the five-decade low of 61.4% hit last year, as a whopping 608,000 people left the labor force in May alone. Throw in the barely positive “wage gains” – likely, due principally to government-mandated minimum wage increases, that are causing already dying retailers to lay off workers en masse; plus, the fact that manufacturing employment declined; and we’re talking about one of the worst jobs reports in memory. Which, when combined with the aforementioned calamities of other hard data, from retail sales; to construction spending; to factory orders; to this morning’s equally catastrophic, massively worse-than-expected international trade balance report; and one wonders how on Earth we are not printing negative GDP numbers.
Or better yet, why the Fed is even considering rate hikes – like the one projected for later this month with 93% certainty by the markets. Which, if undertaken, would still keep the Fed Funds rate at just 1%; providing little ammo, and even less credibility, for the Fed to utilize when it inevitably is forced to abandon its lie about intending to materially tighten monetary policy, into an environment of “dotcom valuations in a Great Depression Era.” A Great Depression Era, I might add, characterized by skyrocketing, unpayable, unprecedented debt loads – of individuals, to corporations, and sovereign governments themselves. No one more so, than the U.S. government itself!
Not to mention, the entities most negatively impacted tightening policy would be Central banks like the Fed, ECB, and Bank of Japan – who as of today, have equal-sized, $4 trillion-plus balance sheets of toxic, historically overvalued fixed income assets (and who knows how much “off balance sheet”). And oh yeah, stock markets so egregiously overpriced, there truly aren’t words to describe the losses investors will inevitably endure – in real, if not nominal terms; as sure as day follows night. Not to mention, the most overpriced residential real estate markets in U.S. history; which, per recent home sales, rental prices, and mortgage application data, is already in decline. And I haven’t even mentioned commercial real estate – or as Zero Hedge put it last month, the “next Big Short”; which not only is dealing with all these issues, but an unprecedented, irreversible retail Armageddon.
Which brings me to today’s “all-important” topic, of how, 5½ years after September 2011’s “Operation PM Annihilation I” attack (on Labor Day Eve, mere hours after the most PM-bullish event imaginable, the Swiss National Bank pegging the Franc to the dying Euro); much less, the May 2011 “Sunday Night Paper Silver Massacre”; the Cartel can possibly hold Precious Metal prices down much longer. Not to mention, how Central banks that already have four-plus trillion balance sheets – and much more off balance sheet; already have lowered rates to zero or below; and already have seen their credibility plunge, given the simultaneous collapse of global currencies, commodities, economies, and political regimes; think they can continue to “kick the can” into the most powerful gale force political, economic, and monetary winds of all time.
Regarding the latter, so many things can end this unprecedented reign of Central bank economic and monetary terror – from the (increasingly likely) “Black Swan” variety, to the sheer weight of their own Ponzi-esque fraud. And make no mistake, one or more such events will occur, spectacularly so – taking down history’s largest, most destructive fiat Ponzi scheme. Which frankly, has already occurred in much of the second and third world, with “first world” nations like the Banana Republic of America waiting “on deck.”
As for Precious Metals, silver has now broken convincingly above its 5½ year downtrend line – at roughly $16.28/oz; with gold just two dollars, as I write, from breaching its own Cartel “ultimate line in the sand” at $1,277/oz. Meanwhile, gold has been above its 200-week moving average of $1,236/oz for two months now, whilst silver is within spitting distance of its own, ironically-priced level at $17.76/oz. More importantly, mine production of both metals peaked in 2015, with dramatic declines anticipated ad infinitum whilst global demand is at or near all-time highs – as Central banks print more than ever, with the Fed “on schedule” to join the overt QE party in the coming months; as, care of two decades of manipulative, covert dishoarding, above-ground, available-for-sale inventories are running on fumes.
Now that the economy – as well as commodities, interest rates, and the dollar – are all listing badly – the “ammo” to hold Precious Metals down; and simultaneously, maintain the fraudulent perception that Central banks are in “control”; has never been lower. In other words, from both the protection and investment standpoints, there has likely never been a better time to purchase physical Precious Metals. Hopefully from Miles Franklin, which has been in business for 28 years without a registered complaint; and a sales force averaging, I kid you not, 25 years or more of industry experience.