Without peer, Zero Hedge is the best alternative financial media website on the planet. It has been this way for years; and without it, I couldn’t do my job as effectively. However, they are not perfect; and consequently, I have been “blackballed” from Zero Hedge since calling “Tyler Durden” out, way back in 2011 – for not giving enough credence to Precious Metals manipulation; or subsequently, understanding how the reason his website is so popular is because gold price suppression has enabled history’s largest, most destructive fiat Ponzi scheme to continue. In recent years, aided by the no-brainer evidence of such manipulation, Zero Hedge is much better at reporting on this all-important topic. However, I will continue to push as hard as possible to make sure it is reported correctly – by both Zero Hedge, and everyone else in the financial media.
Clearly, the world is a far better place with Zero Hedge in it. However, I’m at times, incredulous as to how it presents certain topics, other than Precious Metals; at times, like this morning, in a manner only a world-destroying, 1% propagandist could appreciate. Like, for instance, suggesting this morning’s Chinese Manufacturing PMI print “accelerated” from 51.2 in May to 51.7 in June. As aside from both readings being barely above the recessionary cut-off of 50.0; by no reasonable mathematical definition, worthy of being considered “acceleration”; Chinese economic data, by its government’s own admission, is as upwardly rigged as any on the planet.
Subsequently, Zero Hedge appeared to “validate” Mario Draghi’s propagandist intimation that the ECB might reduce monetary accommodation ‘sometime in the future’ – via its headline this morning, suggesting May Eurozone inflation “beat expectations”; when in fact, at +1.3% year-over-year, it was not only below April’s +1.4%, but the ECB’s +1.5% expectation for 2015; which just two weeks ago was revised down from +1.7%. This, after having clearly colluded with other Central bankers to put on a brave, but completely misleadingly hawkish front earlier this week; in which he stated, in a statement on a hubristic par with Janet Yellen’s “I don’t believe there will be another financial crisis in our lifetimes,” that “the threat of deflation is gone.”
Not that these are major omissions, mind you. However, when I discuss economic data, I leave no stone un-turned in my quest to not only state facts, but the proper context. And when it comes to today’s 1,000% rigged economic data, financial markets, and mainstream media, it is not only the truth that matters – which in the case of essentially all economic data, is not told; but the proper context; and refutation of the powers that be’s’ fraudulent spin.
Like for instance, the fact that despite the Fed desperate desire to promote the lie that consumer is “healthy” – per yesterday’s upward revision of first quarter GDP growth due to a fraudulent increase in consumer spending calculations – this morning’s June consumer spending print came in at a barely positive 0.1%. Not to mention, the Fed’s increasingly desperate desire to justify its economy-destroying rate hikes by claiming surging “inflation” – when the government’s own PCE price index, also published this morning, increased by just 0.1% (which by the way, means June real consumer spending was ZERO). Not that the actual increase in the cost of living wasn’t much higher than 0.1%, of course. However, based on the (downwardly rigged) data the Fed claims to rely on, “inflation” is as non-existent as consumer spending growth.
That said, no website comes close to publishing the amount of PiMBEEB – or Precious Metal bullish, everything-else-bearish – headlines than Zero Hedge does; even if they don’t consider such news in terms of Precious Metals. But that’s alright, as that’s what the real money-focused Miles Franklin Blog is for. Which lately, has been a 24/7 job to maintain, given the sheer volume – and depth – of PiMBEEB goings-on. Like for instance, from the past 24 hours alone…
- Both Illinois and Connecticut face deadlines tonight to enact feasible fiscal 2018 budgets, or face essentially certain ratings downgrades; which in Illinois’ case, would unquestionably commence a death spiral that could lead to a Puerto Rico-like bankruptcy filing
- Total global debt – excluding “off balance sheet” liabilities, which could be on a par with “on balance sheet” levels – was reported to have risen to $217 trillion in 2017, or 327% of (upwardly goosed) GDP; from $205 trillion, or 305% of GDP, in 2012.
- Remember that little old thing known as the “debt ceiling?” Well, in a nation with a collapsing economy; whose record stock valuations are largely pegged to a fallacious belief that tax cuts, fiscal stimulus, and the repeal and replace of Obamacare; a potential death blow awaits in October, when the Congressional Budget Office predicts its final “extraordinary measures” – like stealing from public pensions – will be exhausted, causing the government to run out of cash; and thus, require a massive debt ceiling increase to keep the doors open
- This weekend, Saudi Arabia’s 13-point ultimatum to Qatar expires. Which, if ignored – i.e., the most likely scenario – could lead to a dangerous Middle Eastern military confrontation
- Donald Trump has made it crystal clear to his cabinet – despite its vehement disapproval – that he intends on aggressively pursuing import tariffs against a variety of nations, including China. Who, I might add, is “furious” at Trump for agreeing, this morning, to sell weapons to its sworn enemy, Taiwan.
- The dollar index is about to close out the second quarter – “Trump-flation” and all – with a nearly 5% plunge, representing its biggest quarterly decline since 2010. Heck, it wasn’t even helped by this morning’s “lie to end all lies” Chicago PMI print; which, given what I wrote in yesterday’s “Precious Metals’ ultimate downside protection” – of how far below the industry’s all-in cost today’s historically suppressed prices have gotten – didn’t even cause gold and silver to trade lower.
- And oh yeah, the stock market has been in significant upheaval since the Fed and a host of other Central banks made the suicidal decision this week to make significantly hawkish comments – even if, the reality of the situation is that none of them have done anything hawkish, nor likely will. And don’t worry, as none other than St. Louis Fed President Bullard – who “saved” plunging equity markets in October 2014 by proclaiming, just as the Fed was “ending” QE, that it would reconsider QE if required; saved the day again, by saying the Fed “needs to create policy space in good times, in case more QE is needed in the future.”
Which brings me to today’s extremely interesting topic; which, per the provocative topic, I’m sure you’re dying to hear about – which is, the near-term, potentially major Precious Metal catalysts from the crypto-currency space. Which are, a combination of the recently commenced, broadly-based crypto-currency correction; and the specific issue of Bitcoin’s scaling debate, which will likely “come to a head” by summer’s end. Not that Precious Metals need a crypto-currency catalyst to rise, given just how many PiMBEEB events are swirling around it. However, if one or both of the aforementioned events cause further, significant crypto-currency declines, it may well catalyze a lot of “hot” alternative investment money to shift into – or back into – physical Precious Metals.
In the former case, the space has made a tremendous run in 2017 – in a “coming out party” that, for the most part, occurred entirely in the second quarter. Many promising technologies were introduced – but most of them, with little track record behind them, at exorbitant valuations reminiscent of the dotcom bubble. Moreover, the surge of the number two crypto Ethereum to at one point, a market cap nearly as large as Bitcoin’s, based largely on its role as facilitator to “ICOs,” or initial coin offerings – many of which, can best be compared to dotcom IPOs, or modern-day venture capital unicorns. Subsequently, starting last weekend, a significant correction occurred – in Ethereum’s case, to a peak decline of 50% from its highs; which may or may not continue in the coming weeks and months.
Not that I believe much, if any, capital was withdrawn from the Precious Metals sector to fund the crypto surge, given that a) Miles Franklin, as usual, has seen very little physical selling; b) most Precious Metal investors, rightly so, view their investment as insurance, and a long-term bet that the gold Cartel will fail; c) given the trade restrictions nearly all exchanges have in place, it remains extremely difficult to make significant-sized crypto-currency investments; let alone, as most “altcoins” cannot be purchased with currency – but instead, with other crypto-currencies such as Bitcoin. However, if the crypto-currency correction gains momentum throughout the summer, it’s entirely possible that some alternative investment “fence-straddlers” could abandon their excitement and hopes about crypto-currency, causing them to embrace, or re-embrace, Precious Metals.
That said, today’s theme is more focused on the potential ramifications of the Bitcoin scaling debate – which may or may not conclude this year; but unquestionably, will “come to a head” this summer and Fall; and potentially, explosively so.
At issue, is the potentially destructive political divide that has been building for years, given that the protocol “Satoshi Nakamoto” designed for Bitcoin is incapable of cost-effectively handling the massive amount of demand it is experiencing. Let alone, what will be experienced if demand, as I anticipate, exponentially increases in the coming years. In one camp, the vast majority of the Bitcoin community favors the extremely conservative SegWit, or Segregated Witness, soft-fork upgrade that would ensure Bitcoin remaining on one unified chain. On the other side, a handful of influential ecosystem participants – particularly, Chinese “mining” company Bitmain, which controls 15%-20% of the network’s “hash power”; which apparently, seeks to at least double Bitcoin’s one megabyte block size, via a “hard fork” that could, but does not necessarily guarantee, the splitting of Bitcoin into two chains; as was the case when Ethereum “hard-forked” last summer, into what is now “Ethereum” and “Ethereum Classic.”
Frankly, the number of potential outcomes to this political game of high-stakes Bitcoin chicken are too numerous to list; or, based on the Law of Unintended Consequences, comprehend. However, the very real possibility of a chain-split by year-end looms over the sector; and if it does occur – particularly, in a contentious manner yielding two competing chains (as opposed to Ethereum, where the two chains co-exist peacefully) – it is very possible faith in not just Bitcoin, but crypto-currency itself, will be badly shaken. And given that Bitcoin is the undisputed “gold standard” of crypto-currency,” the growing view of it – and its “little brother” Litecoin – as “digital gold” could be, for all intents and purposes, destroyed; if not permanently, than for the foreseeable future.
Personally, I believe Bitcoin will survive this summer’s scaling confrontation intact – just as it has with the prior three episodes. However, this is clearly the most organized challenge to date, so there is no way of telling what will happen. In essence, we will learn, once and for all, if the network’s globally decentralized governance protocol is indeed more powerful than any individual entity (or entities), no matter how wealthy and/or influential they are. Which, if this proves to be the case, will likely slingshot Bitcoin into a new tier of global acceptance; and with it, a new tier of perceived threat to fiat currency-protecting governments. Which, per last year’s “Precious Metals and Bitcoin – twin destroyers of the fiat regime” and “why Bitcoin will make gold and silver go up” articles, will likely make it far more difficult for the Cartel to suppress PM prices.
Conversely, if the worst-case scenario unfolds – of a contentious hard fork causing a divisive chain-split; and subsequently, a massive Bitcoin price decline; it would be equally bullish for Precious Metals. As in the “storage of value” category; amidst a world more in need of value storage than ever before; it would, for all intents and purposes, lose the only significant “competition” it has ever seen. Not that I view Precious Metals and Bitcoin as competition, per the articles above. However, to many – particularly those who know they need to protect themselves from fiat currency inflation, but were considering Bitcoin as their principal vehicle – a major Bitcoin setback would likely catalyze significant Precious Metal buying; particularly when “history’s most overdue financial crisis” inevitably arrives.
Hopefully, today’s article not only gives you clarity about what exactly is occurring in the crypto-currency space, but yet another motivation to consider Precious Metal purchases at today’s historically undervalued prices – at a time when, potentially any day, the final, spectacular end of history’s largest, most destructive fiat Ponzi scheme could commence.