Consider that “Sir” Alan Greenspan, the undisputed architect of what David Stockman deems the Bubble Finance era, played a bigger role in initiating the flood of fiat currency drowning the world than all other Central bankers combined. Sure, Helicopter Ben, Whirlybird Janet, Mario Draghi, Shinzo Abe and others compounded his failures; but only because, by nature, Ponzi schemes must grow larger to survive.
Also consider that Greenspan was a well known “goldbug” prior to selling his soul for fiat-currency-worshipping-power; citing Ayn Rand, author of the ultimate anti-statist, anti fiat currency novel, Atlas Shrugged, as his mentor. In fact, in 1966, 21 years before he became Fed Chairman, he wrote perhaps the most fiat-damning treatise ever, “gold and economic freedom”; in which, he immortally wrote, “in the absence of the gold standard, there is no way to protect savings from confiscation through inflation.”
Since leaving office in 2006, it’s been quite obvious that not only does he regret his transgressions, but is desperately trying to whitewash his legacy of hyper-inflationary failure – in not only attempting to shift blame to future Central bankers and Congress, but re-establish the “common knowledge” that he believes in gold. So when he’s out in force at age 90; at the commencement of what he knows will be the worst financial crisis in history; loudly re-iterating his belief in gold; you know the end game has clearly arrived.
Bix Weir says Greenspan anticipated the horrifying scenario we are experiencing planned all along; whilst I view the monetary chronology as more of a series of Keystone Kops errors. We’ll never truly know the answer; but either way, the historic fiat collapse that is pushing the world back to gold is playing out perfectly. So for anyone who doubts what’s coming, I’d simply advise that ignoring the words of history’s most powerful, and connected, Central banker is likely not a wise move. To wit, “we’re now in the very early days of a crisis which has got a way to go. If we went back on the gold standard, and adhered to the actual structure of the gold standard as it existed prior to 1913, we’d be fine. Remember that 1870 to 1913 was one of the most aggressive economic growth periods we’ve had in the United States, and that was a golden period of the gold standard.”
Moving onward, it’s early Tuesday morning; and finally, after the worst two-day stock market decline in global history, “the powers that be” have managed to generate an – albeit, modest – “dead-cat bounce,” amidst an historic money printing and market manipulation scheme. And wouldn’t you know it? Europe’s Chief of Internal Destruction himself, Mario Draghi, is being cited as the “catalyst,” in subtly hinting at more collusive money printing and market manipulation. As apparently, after four years, he hasn’t yet gotten the message that “whatever it takes” make things worse.
As expected, no market has been manipulated – read, suppressed – more than gold. Which, from viewing the below charts of Friday, yesterday, and today’s early action, you’d have thought was down if you didn’t know it spiked from $1,255 to nearly $1,350 when Brexit arrived Thursday night! Par for the course, of a Cartel on its last, dying legs; particularly when considering the record COMEX short positions traders are homing in on, smelling “Commercial” blood in the water, a la silver in April 2011. In fact, for anyone that actually believes this morning’s Cartel raid was, LOL, due to actual people, selling actual gold, yesterday was one of Miles Franklin’s busiest days ever.
And I assure you, NONE of yesterday’s business related to client selling!
That said, I’m going to move on from gold for the moment; as frankly, it’s not worth spending more time on today – other than to note that the historic, worldwide gold market; which, on average, is around all-time highs in nearly all currencies, is just getting started. And cannot, and will not, be stopped by naked shorting; the dishoarding of the final fumes of Central bank supply; or any other force known to man.
Instead, I’m going to focus on the most “no-brainer” response to Brexit of all. Which is, the “manna from heaven” it proves Central bankers, in providing a “scapegoat” for the problems they created; and subsequently, an excuse to print exponentially more fiat toilet paper.
Obviously, European Central banks have the least “degrees of separation” from the Brexit catastrophe. Thus, when the Bank of England claims it has “committed” (i.e, printed) $345 billion, or 13% of UK GDP, to “stabilize” markets; or the ECB “lends” $399 billion to collapsing European banks, no one bats an eye. Or even when Shinzo Abe “instructs” the Bank of Japan to “ensure stability in financial markets,” by “keeping in close contact with other Group of Seven economies” to “respond quickly and flexibly to the situation.” As for the Fed, Whirlybird Janet finally has an iron-clad excuse to never again raise rates – and to the contrary, lower them to or below zero. Thus, all the Central bankers are happy. That is, until even their best hyperinflationary efforts fail to staunch the unstoppable tsunami of reality, resulting in the deadly combination of collapsing markets, depleted printing press “arsenals,” and destroyed credibility. Which I assure you is coming to the handful of places it hasn’t yet arrived at, as sure as night follows day.
However, no singular act of brazen, chaotic money printing this week compares to what the Italian government aims to do – to “capitalize” on Brexit as an excuse to blatantly print money. Which frankly, even I am having trouble getting my hands around, given that the Italian government is as insolvent as any on the planet, and beholden to the whims of the ECB.
Which is, its latest Ponzi scheme – fitting, as Charles Ponzi was Italian; to have “Peter pay Paul” – also fitting, for anyone who’s seen the Goodfellas wedding scene; to take $44 billion from its bankrupt coffers to “bail out” collapsing Italian banks. Which, if it actually occurs, would likely buy them no more than a few weeks of solvency. To wit, the 10-year chart of Unicredit, Italy’s largest bank; down 31% in the past two days alone, to a new all-time low of €1.97/share; 95% below its 2007 high, and 63% below its 2008 financial crisis low. In other words, screaming near-term bankruptcy!
In this Zero Hedge article, Italy’s psychotic, suicidal plan is laid out in detail – to the point that, in reading it, even I am at a (very temporary) loss for words. To start, it notes that the proposed $44 billion “bailout” amount is no more based on known capital requirements than 2008’s $700 billion TARP scheme in the States. And given that Italy’s banks admitted to roughly $400 billion of bad loans earlier this year, or 18% of their entire loan portfolios – before the Brexit caused a dramatic decline in European economic expectations, I might add; it’s difficult to believe anyone would believe a mere $44 billion would help, particularly when it’s at the expense of the equally bankrupt government; i.e., the citizens, who will ultimately pay for it via ECB-generated inflation.
But it gets better; as due to the same nonsensical, bureaucratic regulations that caused Brexit in the first place, such a plan would have to first be approved by the ECB, whose charter does not permit bank bailouts by sovereign governments. No, according to the ECB’s asinine rules, only it can bail out Italian banks (with freshly printed Euros); with the only other “alternative” being the “bail-in” protocol that became official ECB policy as of the beginning of this year.
Consequently, seeking to avoid the outright theft of citizens’ funds, a la Cyprus, the Italian government is pursuing two other, equally lunatic alternatives. The first, to fund the bailout with a giant Italian bond issue (likely, monetizable via ECB QE) – in a pathetic attempt to skirt ECB rules, which allow such madness during “exceptional market conditions.” And the second, a “moratorium” of said “bail-in” protocols. In other words, they are attempting to blatantly break the very rules they created – which is particularly poignant, given that ECB chief Mario Draghi is Italian!
My friends, I assure you – that whatever “respite” the powers that be manage to orchestrate will be short-lived; particularly in Precious Metals, and particularly when it relates to faith in new money-printing schemes. Central bank credibility, in the minds of an exponentially growing majority of global denizens, officially died this year; as has their ability to maintain “stability” in a world where their cumulative destruction activities have gone parabolic. And particularly as regards the global stampede to real money – i.e., physical gold and silver; which dramatically accelerated post-Brexit, and will only grow more powerful until all available-for-sale above ground inventories are depleted. Thus, it couldn’t be clearer that the time is NOW to protect your life’s savings, whilst you still can. And if such protection involves the purchase or storage of Precious Metals, we simply ask you to call Miles Franklin at 800-822-8080, and give us a chance to earn your business.