It’s amazing how sentiment can change after a few days of PPT-inspired stock market gains; as trust me, the “wide world of horrible headlines” continues unabated. Clearly, TPTB’s need to portray Janet Yellen as anything but the line-towing, money printing, ivory towerite she has always been is indeed powerful. To wit, over the past week, whilst global equities were blatantly propped up – particularly when Janet Yellen made her initial Congressional appearance; emerging market currencies barely budged from their lows, whilst crude oil prices continued their skyward, hyper-inflationary surge.
In fact, “another one bit the dust” yesterday – as the Kazakhstan Tenge currency was officially devalued by 19%, to an all-time low. Its stock market hyper-inflated surged by 12%, of course; but do the math, and decide if it was worth it for Kazakh investors – let alone, “the 99%” facing immediate 19% price increases. Meanwhile, in the all-time most pathetic propaganda attempt in financial media history, none other than CNBC reported that last year’s draconian Indian gold tariffs were “working” – as India’s “trade deficit” fell from $10.1 billion in December to $9.9 billion in January – “helped by a 77% fall in gold and silver imports. To start, let’s reiterate the “pink elephant” question Peter Schiff has been asking all along? Why on Earth is gold considered a “trade” item – when it is in fact money? Next up, is a measly 2% trade deficit decline even statistically significant, let alone meaningful? And given the massive black market that has since developed – through which, even the government admits has yielded hundreds of tons of gold smuggling into the country, should such “trade” be ignored? And oh yeah, if gold imports fell 77%, but the trade deficit only fell 2%, isn’t it safe to say that gold was decidedly NOT the issue in the first place?
Of course, such blatantly transparent propaganda is being spread – via CNBC and other MSM lackeys – for one reason, and one reason only. That is, because the Indian government will shortly be forced to repeal the ill-begotten gold and silver tariffs and import limitations if it wants to give itself a fighting chance in the upcoming national elections (in May). Given that the ruling Congress Party was soundly defeated in December’s regional elections – in large part due to its Precious Metal policies – it clearly realizes it must repeal them by May. And thus, such propaganda is nothing more than their futile, pathetic attempts to “save face.”
On to Europe, where the Italian stock market continues to hyper-inflate rise as yet again, its government is on the verge of collapse. Last I looked, governments tended to collapse during bad economic times, NOT the so-called “high times” indicated by the hyper-inflating, Central bank-supported stock market. Per this story from last month, titled “Italy’s Youth Unemployment at 42%, as Jobless Rate Hits 37-Year High,” use your own judgment to decide the reality of the situation; and with it, what is likely to occur on the political, economic and social fronts.
Or how about France, whose nation-destroying dictator was honored last night in a $1.5 million White House “State Dinner?” Aside from Greece, the French economy might be the weakest in Europe; and oh yeah, French banks are more exposed to the Greek economic implosion than any other. But don’t worry, its hyper-inflating rising stock market must be right; as opposed to Francois Hollande’s near record-low approval rating; which, by the way, had its only blip higher of the past year when it was revealed he was cheating on France’s first lady. Oh, to be part of “the 0.1%!”
Fortunately, Germany’s supposedly “tough, conservative” Constitutional Court last week passed the buck on the ECB’s yet-to-be-tested money printing bazooka; i.e., the OMT, or “Outright Monetary Transaction.” It’s just a matter of time before Mario Draghi follows in the footsteps of fellow Goldman Sachs alumnus Hank Paulson in firing it – given Europe’s banking system is on the brink of implosion. And now that the German court has allowed the European Union court to make the final decision regarding the OMT’s constitutionality, there should be no impediment whatsoever to a full-scale European “QE” announcement in the coming months. Perhaps this is why – incredibly – Spanish 10-year yields have fallen to multi-year lows; amidst record low real estate prices – and record high debt, bad loans and unemployment!
And finally – without even touching on this morning’s collapse of U.S. mortgage purchase applications to a 19-year low – let’s focus on the “Land of the Setting Sun”; where, nearly a year into Abenomics – and thus, halfway toward doubling the money supply – Japanese machine orders plunged by an unfathomable 16% in December. This was the largest monthly plunge in 22 years; and as we wrote in last week’s “The Japanese noose is tightening,” things will get much worse when the national sales tax is increased from 5% to 8% in April – and 10% next Fall. But don’t worry, the Japanese stock market has hyper-inflated rose nearly 50% in the past year; so what could possibly be wrong?
And what better way for an article to live up to its name, than to discuss last night’s pathetic House vote to pass what is being propagandized a “clean debt ceiling increase?” In other words, after being soundly humiliated in the “fiscal cliff” and “budget deal” debates, John Boehner completely capitulated on the pending “debt ceiling” increase. Not that last week’s February 7th “deadline” has much meaning – or Jack Lew’s February 28th “X-Date,” for that matter; as per what we wrote in “Debt Ceiling to Infinity Is Here – And the End of the Constitution,” the President can now veto any debt ceiling legislation; and can only be over-ridden by two-thirds votes in both the House and Senate, which could NEVER happen.
That said, the finality of the Republican-controlled House allowing such a hyper-inflationary measure to pass unopposed marks yet another day of Congressional Infamy; and with it, an accelerated step toward the collapse of the global, dollar-led fiat Ponzi scheme. After the Democrat-controlled Senate rubber stamps this measure – likely, today – the government will have another year of unfettered access to its newest lackey – Janet Yellen’s – printing presses. In fact, yet again, there won’t even be a debt ceiling; but instead, a continuation of the debt ceiling “delay” instituted a year ago, via the oxymoronically named “No Budget, No Pay” Act. Recall, the $16.4 trillion “debt ceiling” currently on the books was breached a year ago. Yet, despite government lies regarding “declining deficits,” the national debt has risen to $17.3 trillion in the past 12 months; and now that the economy is declining anew – and energy prices rising – take a guess what it will look like 12 months into the future.
As for Precious Metals, it’s finally starting to get interesting again. The Cartel did all it could to calm them during “Whirlybird Janet’s” House testimony yesterday – to be repeated tomorrow for the Senate. However, gold rose to its customary 1.0% cap, to put it in range of the very key round number of $1,300/oz.; whilst silver again refuted attempts to push it below its eight-month “line in the sand” at the very, very key round number of $20/oz.
Starting with last night’s 8:00 PM EST open of the thinly-traded “Globex” paper market, the Cartel has attempted to cap and/or raid PMs at every “key attack time” since. However, as I write at nearly 11:00 AM EST, they have decidedly failed; as whilst the “Dow Jones Propaganda Average” is now falling, both metals are near their respective daily highs. As you can see, they are attempting their third “Cartel Herald” capping algorithm of the morning – in a desperate attempt to prevent the inevitable surge above $1,300/oz. And as for silver, with each passing day, $20/oz. is looking more and more like one of the most powerful bottoms in technical history. Oh well, I guess we’ll just have to watch and wait; and when holding PHYSICAL metal – instead of “Paper PM Investments” – one has all the time in the world.
Remember, we own real money not to “profit” from its inevitable, parabolic rise, but protect ourselves from the collapse of dollar, euro and yen-denominated paper assets – among others – when the doomed, global fiat currency system collapses. All 599 previous attempts have done so, and today’s mega Ponzi scheme will do so as well – only far more spectacularly, with far more debilitating effects. This is why you must take advantage of this historic opportunity to protect your wealth with assets trading below the cost of production; as once the window closes, you may not be able to do so at any price.