It’s Monday morning, and a LOT has occurred since Friday’s impromptu post-NFP audioblog. Starting with Friday afternoon’s COT, or “Commitment of Traders” report; which, in demonstrating further “commercial” short covering, validated what I said last week – of how the Fed-orchestrated Precious Metals “correction”; based on a blatant lie regarding potential policy tightening (despite not a shred of economic evidence suggesting such an event was likely); solely to help said “commercials” cover their all-time high short position; is OVER. Not that the Cartel is “letting up” in the slightest – as evidenced by yesterday’s 146th “Sunday Night Sentiment” raid of the past 152 weeks (LOL, just as gold was about to cross this Spring’s primary “line in the sand” at $1,250/oz); and 652nd “2:15 AM” EST attack of the past 747 trading days. And this, as the only significant weekend news was a plunge in the British Pound, upon news that the “leave” faction leads in the latest Brexit polls.
Irrespective, the Cartel is clearly in trouble; no less, as Precious Metals’ “partner” in destroying the cancerous global fiat Ponzi scheme, Bitcoin, is on the verge of breaching $600. To that end, I’m now finding myself looking forward to awakening each morning, knowing full well the majority of major Bitcoin surges occur in China, where 90% of the volume trades. In other words, exactly what Precious Metals will eventually become – when China, which is the world’s largest PM producer and consumer, finally takes the mantle of the world’s principal gold and silver price creator. This year’s establishment of the “Shanghai Fix” is a huge start in this direction – and eventually, Westerners will awake to see “what happened in China” with gold and silver, just as they do now with Bitcoin.
As for the here and now, if you don’t think the Cartel is staring in the face of a potentially lethal, manipulation-destroying product shortage in the coming years – or perhaps, months – take a look at what the COMEX’ registered silver inventory looks like, after a whopping 3.5 million ounces, or 13% of the total, were withdrawn Friday. Yes, a new record low level, of a mere 23.3 million ounces, are available for delivery, worth a record low $380 million – having just taken out the lows of April 2011, when inventory was being withdrawn not because the prices was falling, but surging! In other words, PMs are yet again proving to be price inelastic on both the upside and downside, unlike any other “commodity” on the planet. To that end, the great Andrew Maguire noted this weekend, that the Chinese government has been actively advertising on national television in recent weeks, encouraging Chinese citizens to buy gold; and thus, quite obviously setting a new, higher “floor” on the gold price.
Frankly, I could spend several pages following up on just how bad the May “jobs” report was, now that the usual “supplemental data” has surfaced – like an anomalously positive “seasonal adjustment factor” – depicting how even the ugliest imaginable superlatives understate just how ugly the U.S. labor market, and economy-at-large, are. Suffice to say, the “nine ugly charts” of how the economy has actually performed under Obama – which unfortunately for Democratic incumbents, have gone viral – are a perfect analogy for the difference between the Fed’s propagandized “recovery” and the real Main Street economy. In fact, if Bernie Sanders actually winds up beating Hilary tomorrow in the California primary – which right now, polls depict as a dead heat – the beginning of the end of the facade of “recovery” will have commenced, for both the Fed and countless political incumbents. Moreover, it will likely send financial markets into chaos, putting an enormous “uncertainty bid” under safe haven assets like gold, silver, and Bitcoin.
That said, the same “bass-ackwards” propaganda that has characterized the Fed’s three-year market manipulation – and reality-delaying – campaign; which has dramatically worsened America’s historically bad financial situation in the process; hasn’t changed a whit. Like Obama trying to “Greenspan-ize” his horrific legacy by taking credit for a “recovery” that never occurred (to the contrary, said “nine ugly charts” tell an entirely different story), the Fed is back in mega-propaganda mode, as I predicted last week. In other words, a handful of Fed governors espoused the same ambiguous platitudes this weekend – of rate hikes being “on the table” later this year – as they have continuously done during the three years since Bernanke’s equally ambiguous, practically impossible “exit strategy” was first discussed. As usual, most such talk emanated from non-voting FOMC members; and irrespective, after just one rate hike in more than a decade – which nearly destroyed global markets, amidst far better economic conditions than today – even the consideration of such a move is outright ridiculous. Let alone, with a potentially historic Presidential election mere months away; and oh yeah, said “Brexit” – which the Fed itself has cited numerous times as a reason to delay rate hikes – appearing more and more likely each day.
In other words, the propaganda has been turned up to eleven on a scale of one to ten, as depicted by this weekend’s Zero Hedge article titled “rising rates hit new lows.” In other words, for all the hype regarding the Fed’s mythical “upcoming” rate hikes, global interest rates are at all-time lows; with $10.4 trillion of sovereign bonds trading at negative yields before Friday’s NFP bloodbath, led by the U.S. Treasuries which exploded higher. To that end, the U.S. 30-year Treasury yield plunged to a new 52-week low on Friday, whilst the benchmark 10-year yield plummeted to within 25 basis points of its all-time low. Which surely will be achieved, once the Fed is forced by the exploding currency wars to join the ECB and BOJ in instituting economy-killing – and Precious Metals-igniting – negative interest rates.
Rest assured, June 15th’s meeting is “off the table” for policy tightening – and frankly, my “personal odds” of a rate hike in 2016 are ZERO. As they are for 2017 and beyond, until surging inflation forces the Fed to, LOL, “defend the dollar” with rate hikes that would assuredly cause financial markets to implode, and the U.S. Treasury to default on its massive, historic debt load.
Ah, the peace of mind I have owning physical Precious Metals – and now, Bitcoin as well – knowing full well how this time-honored, but never on such a grand scale, experiment in monetary lunacy will end. Likely, far sooner than most can imagine – certainly, in the dozens of countries whose currencies have already collapsed; and shortly, in those, like the U.S., which haven’t yet, but inevitably will.