Barron’s, which like the Wall Street Journal, Financial Times and other financial publications has caused readers to lose billions if not trillions over the years; ironically, whilst feigning “conservative” investment principles. Of course, they are no less “conservative” than CNBC and other bottom fishing MSM cheerleaders – who cumulatively have as little care of investors’ well-being as the Fed of “the economy”; or politicians, the “99%” that don’t fund their campaigns. In a nutshell, sensationalism sells and bullish sensationalism even more. Which is why, this weekend’s blaring Barron’s headline that “this time is different” – no less, on the 18th anniversary of Alan Greenspan’s infamous “irrational exuberance” speech – is as ominous as it is disingenuine.
And the same goes for Wall Street; which atop taxpayer funded “bailouts” – via the Fed’s printing press – as a “reward” for such criminality. Which is why this week’s commentary from Goldman Sachs is as frustrating as it is typical. To wit, just two weeks ago, Goldman’s strategist set a year-end 2015 S&P 500 target of 2,100 as it traded at 2,052. He started 2014 with a year-end target of 1,900, but later raised it to 2,050 under the time-honored explanation of “multiple expansion,” despite the S&P already trading near a record-high P/E multiple, amidst the lowest “earnings quality” of our lifetimes. Fast forward to the aforementioned comments two weeks ago, wherein he claimed S&P 500 multiple expansion was OVER. That is until one of history’s most blatantly PPT-engineered rallies, pushing the S&P 500 up to 2,075; after which, no doubt his masters told him to be “bullish-er.” And thus, he yesterday “changed his mind” about the end of multiple expansion he espoused two weeks ago, enabling a “new and improved” 2015 year-end target of 2,300.
Trust me, I know what I’m talking about as I was a Salomon Smith Barney sell-side analyst for seven years – culminating with the infamous conflict of interest scandals headlined by Jack Grubman’s championing of Worldcom, Global Crossing and countless other Salomon banking clients, all the way to bankruptcy. Jack’s office was right down the hall from mine; and thanks to his charisma, I was bumped off the “morning call” with our sales team countless times, so he could hype any and every movement of Bernie Ebbers and other Salomon financed telecom fraudsters, in lieu of my “bland” commentary about oilfield services.
In other words, just as Barron’s is motivated to say “this time it’s different,” or Goldman Sachs to relentless raise its stock targets, the government – all governments, for that matter – lies through its teeth to create the impression of “recovery,” “expansion,” and all manner of vote-garnering propaganda. Why anyone believes a word Washington or Wall Street says is beyond me, as their perma-bullishness has all but destroyed the “99%” over the past 15 years – first in the dot.com crash they caused; next in the real estate collapse they created; and finally, the debt slavery their printing and spending orchestrated. Today, the global economy sits at its low point of our lifetimes, whilst both debt and the cost of living have reached historic highs; and sadly, the paths of least resistance will exacerbate these trends for the foreseeable future. So is the terminal phase of a Ponzi scheme; in this case, history’s largest.
To that end, Thursday’s Audio blog was titled “crashing oil and currencies, America’s death knell.” And what happened on Friday, following the supposedly “mega-bullish” NFP report – which for all intents and purposes, the BLS literally made up? Yes, currencies the world round had one of their most dramatic one-day declines on record, whilst oil prices crashed to last week’s post-OPEC lows. It is truly shocking how few people realize the recent “dollar rally” is no different than in 2008; i.e., catalyzed solely by fears of global economic collapse and NOT U.S. “economic strength.” In fact, the flat out lie the NFP report was (notwithstanding a 36-year low Labor Participation rate, a Household survey purporting negative November job growth, an anomalistic positive birth/death figure in a month that is typically negative and the same miserable job quality as always) was contrasted by worse than expected, sharply negative factor order growth; a much worse than expected trade deficit and much lower than expected consumer credit growth. In other words, the November NFP report was “par for the course” on the “island of lies” that is U.S. employment data reporting.
To that end, the deeper the oil price crash gets, the more information we receive as to just how dire the situation is becoming. Recall, last week we noted that one-third of all S&P 500 capital expenditures have been in the energy sector in recent years, which were already declining before this Fall’s historic price plunge. Not to mention, an incredible $210 billion of energy-related “high-yield” bonds are outstanding – the vast majority related to shale oil – representing 15% of the entire junk bond market. Which, as you can see here and here and here are in freefall mode. Better yet, since 2007, all U.S. job creation has been in the shale oil industry, with cumulative job growth of all other sectors negative. And oh yeah, care of the recent oil price plunge it is estimated that $150 billion of previously anticipated 2015 E&P (exploration and production) spending will be cancelled in a world economy already in, or on the cusp of depression.
Back to government published “economic data”; at some point, people have to question why anyone believes a shred of it. For one, with such large economies with thousands, if not millions of moving parts, how can anyone believe such data can be precisely measured – much less, by inefficient government bureaucracies with blatant political agendas? Or, for that matter, how does Wall Street – i.e., Washington’s largest financial backer and partner – generate such precise “expectations” of such data, aside from being “handed the keys” to the government’s fraudulent calculation algorithms. And care of relentless manipulation, not only are markets and media moved by lies, but the difference between a “make” and “miss” can be an infinitesimal tenth of a percent with essentially no statistical significance. And this, amidst an environment of broadly collapsing economies, which even a reasonably intelligent fifth grader can understand.
Worse yet, the myriad data from private sources – which invariably, have their own biased agendas. For example, the ADP employment report; which for some unknown reason, desperately attempts to mimic the fraudulent NFP report – to the point that last year, it downwardly revised several years of data in dramatic form to match the BLS’ lies. Of course, this week’s NFP report was so off-the-charts fraudulent, even ADP (which issued a miserable November employment report just two days earlier) couldn’t come close to mimicking it. Then our fed housing data from the NAHB, or National Association of Home Builders and the NAR, or National Association of Realtors; both of which consistently depict “sentiment” dramatically higher than sales – and both of which, like ADP’s employment data have recently been subject to dramatic negative revisions. Of course, only in precious metals are its independent trade organizations overly bearish – such as the consistently anti-PM propaganda published by the miner-funded organizations like the “World Gold Council” and “Silver Institute.”
And the scariest part of it all is that the data most utilized by the Federal Reserve, in determining how many dollars to print out of thin air, are the aforementioned employment lies and the “twin towers” of inflation understatement; i.e., the CPI and GDP. So much of the fraud they perpetrate on the world is based on understating inflation – which even Yahoo! Finance is well aware of. To that end, my good friend Jeff Nielson put it perfectly last week, in averring that “lying about the rate of inflation is an activity which comes more naturally to central bankers and corrupt governments than breathing. While soaring inflation (particularly food and housing costs) cripples the standard of living for the working poor and shell-shocked remnants of the Middle Class; the Liars report near-zero inflation, and lament that inflation is too low. All that is missing are the crocodile tears.”
Finally, we cannot emphasize enough just how moronic it has become to follow “diffusion indices” – especially government generated ones – to determine economic strength and/or the pace of economic growth. Such surveys are so statistically insignificant that even Wall Street mocks them; and as you can see below, they not only have little correlation to manipulated published GDP growth figures, but in different countries, often yield diametrically opposed results – in some cases, with not the slightest shred of logic.
Then again, if manipulated published 2Q U.S. GDP growth could be 4.6% with these ugly numbers, I guess anything is possible in the halls of economic book-cooking.
So many other topics to address as I write Sunday afternoon – from Steve St. Angelo’s latest devastating report on the collapsing silver mining industry; to “under the radar” legislation setting the stage for war on Russia – where by the way ruble-priced gold is at an all-time high; to Israel bombing Syria this weekend; Italy being downgraded to one notch above junk status; and this Sunday’s Japanese “snap election” – where amazingly, Shinzo Abe appears likely to receive a “vote of confidence” in his Yen hyper-inflating scheme. And oh yeah, the breaking news that Belgium appears likely to demand repatriation of its gold in the coming weeks.
But that’s the beauty of the Miles Franklin Blog – as for FREE, our three authors write five days a week – atop countless podcasts, audio blogs and other highlighted readings. Our job may be to sell precious metals, but our passion is educating the public of the TRUTH of economics and financial markets; and to that end, we assure you all these topics and many others, will be addressed in the coming days and weeks. David, Bill and I put our heart and soul into our work – which hopefully, you’ll recognize if and when you decide to buy, sell or store precious metals.