For centuries, if not millennia, the concept of financial “calm” had a patently obvious, nearly objective, definition. Which was, for the most part, steady economic activity; modest market volatility; and, for the most part, no major cataclysms – either perceived or actual. Sure, stocks had big moves – both up and down. However, within a largely free-market environment, such moves were neither worrisome nor particularly impactful on other business sectors; let alone, assets classes, global economics, or sovereign stability. When “major events” shocked the markets – such as the 1987 crash, for example – they rarely lasted long; particularly in the post-1971 fiat world, when an unsuspecting world didn’t realize the artificial debt capacity it was “papering over” such events with would inevitably run out.
Prior to 1971, financial and economic shocks were, for the most part self-correcting. Whereas, after the gold standard was abandoned – particularly after the global economy peaked in 2000, and broke in 2008 – said shocks were, as a policy, “absorbed” by extraordinary monetary policy. To wit, this incredible chart depicting the expectation that, for the first time ever, Central banks are expected to monetize more than half of all 2015 issuance.
I have been a financial analyst for 26 years, and never could have imagined that the profession I so diligently studied would be rendered useless by such manipulation. However, this “new financial order” decidedly has a “fatal flaw”; which is, that no matter how much markets are rigged; economic data fudged; and perception “molded” by propaganda, “Economic Mother Nature‘s” immutable laws cannot be usurped for long. When losing money in financial markets, “not long” may be an irrelevant term. However, in the big picture of things, it really and truly isn’t – particularly if one avoids catastrophic investment risk (like mining shares, for example).
I mean, consider that the Euro currency, a massive project uniting the economies and finances of 500 million people, is on the verge of collapse after just 15 years; or, for that matter, that the supply/demand balance of physical and gold and silver, after 15 “long” years of historic price suppression, has become historically tight. Conversely, just seven years after crude oil and copper prices surged to $150/bbl and $4/lb, respectively, their supply/demand imbalances have never been larger; and likely, care of said “extraordinary monetary policy,” will be for years to come. In other words, financial and economic relationships – and dogma – can change quite rapidly, and usually do.
Presently, we are at the crossroads of political, economic, and social history. No singular event yet defines it; but clearly, the pending breakup of “Europe as we know it” has the potential to lay such a claim. Or, for that matter, the escalating Ukrainian conflict; emergence of the “Sino-Russian Economic Bloc; or perhaps, widespread social unrest, as an exploding dollar causes rapidly rising global inflation. And this, amidst a broadly “deflationary” economic environment destroying nations, corporations, and individuals alike; whilst, paradoxically, their costs of living inexorably rise, as inexorable money printing pushes the price of nearly all “need versus want” items higher. And by “need versus want,” I’m not just speaking of food, health insurance, and rent – but “indirect” costs like fees, surcharges, and taxes. Not to mention, the lethal combination of zero interest rate policy and said fees and surcharges at banks; causing savings to actually decline, as the cancer of “negative interest rate policy” prevents savers from keeping up with inflation, no matter how “low” the government purports it to be.
This past month alone, we have witnessed more “horrible headlines” than I can remember; at the least, on a par with the darkest days of the 2008 crisis. Yet, the unprecedented money printing, market manipulation, and propaganda scheme that accompanies it has created a perception of “calm”; that is, a “new” kind of calm, in which catastrophic political, economic, and financial events are temporarily ignored. Instead, we see record valuations of financial assets, amidst the objectively worse fundamentals in memory, and the lowest valuations of gold and silver in decades – if not centuries – relative to their own, wildly positive fundamentals. Clearly, no one knows exactly how long such dichotomies can last; but one thing we do know, is that physical gold and silver cannot be manufactured at will, even if mining shares can.
Not to mention, actual economic activity, as opposed to the flat-out lies reported by the Bureau of Labor Statistics. To wit, this morning’s unexpected plunge in small business sentiment, and GDP-busting collapse of corporate inventory growth, yielding America’s highest inventory-to-sales ratio since…drum roll please…mid-2008. Let alone, the giant pink elephant in the room of $51/bbl oil, which is tightly strangling the highest paying, largest capital spending industry in America; and, for that matter, much of the world. TPTB attempt to counter said reality with a blizzard of hyped-up, propagandized “bullish data points” – accompanied by perception-altering financial market algorithms. Not to mention, said algorithms’ utilization around myriad “important events” – like Fed meetings and Greek elections, for example – to prevent destabilization of said “calm.”
Today, for example, we’re being fed “rumors” that the Euro Group may grant Greece a six-month bailout extension; which care of PPT stock buying, and gold suppression algorithms, is being spun by the MSM as “bullish.” The fact that such rumors, as usual, have not been confirmed; or more importantly, that the explosive debt accumulation such an event would entail is not even remotely positive, is yet again, temporarily ignored. Not to mention, the real significance of such an event, were it to be true. Which is, that Greece can in fact “take down Europe” if it undertook a “Grexit” from the Euro currency, and defaulted on its debt.
I’m quite curious to see what occurs at Wednesday’s EU Summit; as given the February 16th ultimatum given to Greece last Friday, if the Euro Group truly intends to “back down” – in what would amount to an historic show of political weakness from the Euro Group’s “Goliath” to Greece’s “David” – it will likely reveal such a stratagem at this meeting. And trust me, if they do in fact back down, it will decidedly NOT be considered “bullish” for the cancerous Euro; particularly as much bigger PIIGS – like Spain and Italy, for example – will demand similarly lenient treatment; not to mention the Syriza-like political parties rapidly overtaking them.
Frankly, the singularly most comical aspect of today’s artificial “calm” – before the political, economic, financial, and social “storm of the century” inevitably arrives, is this week’s comical attempt to push the benchmark U.S. Treasury yield above 2.0%, following its massive plunge last month. In other words, can TPTB really convince the world of a U.S. economic “decoupling” that doesn’t exist, solely on the basis of an historically fraudulent employment report?
Only time will answer these questions; but again, “Mother Economic Nature” has never been defeated. And today, against the weakest enemy she has ever faced – in terms of its dire economic and financial condition – the odds are heavily in favor of an onslaught. Be it Greece, the U.S., or otherwise, something will break up the “calm before the storm.” And when it does, if you haven’t already protected yourself from its waves and gusts, you may never again have the chance.
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.
The Money Printers Hate gold.
The storm is coming.
History has shown us that the fiat currencies cannot compete long term with gold.
History has shown us that when GOLD gets in the way of money printers that they confiscate GOLD.
The golden question is this…..
Will the West again confiscate gold from us if we only have a very small fraction of the worlds gold..
If the East does control the majority of the gold how can the West benefit from taking the small amount of gold we might hold……
I may be wrong but I think they will try to get our gold at some point in the next few years.
It would be easy for the Government to seize all gold held in NA secure facilities like The Brinks facilities in Canada.
Would be curious to hear what the readers here think about the risk of government confiscations of gold.
There is a growing unwillingness from European countries as far as cooperation with policy that is not in their benefit.
forgot to include this linkhttp://www.caseyresearch.com/articles/dont-dismiss-the-possibility-of-gold-confiscation
Mike, the current price manipulation IS the confiscation IMHO. Every stacker that loses faith and coughs up metal here instead of doubling down or BTFD, has successfully been robbed of her/his honest savings and proved to be a weak hand. Count your wealth in ounces, not fiat term, and embrace these pull-backs. As Andy has laid out so many times in his work, manipulation will always fail. India, China, and Russia and lats more are stacking… 2/3rds of the world sees the light but the peoples in the West. The systematic MOPE of the MSM has done excellent work on the masses, which are still asleep in North America and most of Europe. The elites are stacking up, VERY quietly, but they are, so I doubt confiscation will be an issue. Actually, the PM holders in the new system will be in the lucky position to have a great amount of capital that can then be put at work again to rebuilt a more sustainable future. That’s my hope at least. Time will tell how it all will pan out. Good luck to you and to all. x
There is so little gold at Brink’s (the vault’s principal usage is storing currency for banks), that it’s hard to believe it’s even on the radar. And what kind of world would be living in if the Canadian government (not the U.S.) was so desperate, as to try to get our piddling stash from a private company?
Would you agree that if the government did confiscated gold that the larger bullion storage facilities would be targeted? And the same goes for the bullion dealers like APMEX etc… How about safe deposit boxes at banks? Some say not to have PMs in them because it would make it easy for the government to confiscate them. I do not completely agree with that. Why would the government want to drill open more than 100,000 safe deposit boxes just to find a few ounces here and there? The amount would hardly be worth it. Not saying it could not happen but I think other assets might be easier to take.
First off, DO NOT every put anything in a safety deposit box – as banks can have assets frozen, or be “bailed-in.” The government has carte blanche with anything in the banking system.
As for Brink’s, if the tiny amount Miles Franklin has in a non-bank (security) company in Canada, which is not even the principal usage of the vault, somehow becomes worth the Canadian government’s while to track down, I don’t think the world will be worth living in anyway. And of course, it is never wise to keep everything in one place.
Any one with two brain cells to rub together should be fully aware that the US gov and all other western gov’s, for that matter, are not going to let you and me joe/jane six pack survive a national economic implosion by holding gold.
These are the illusions of people who think they will be treated correctly under a complete breakdown as you talk about everyday.
Grow a brain, and open your eyes. Your gold will be confiscated either directly or indirectly.
Your conflict’s of interests as a seller of bullion has let you with a deeply flawed understanding and true intellectual honesty as it relates to the future and reality.
The fact that you and I have hold gold places us on a special list
Thanks for your aggressive, nasty comments.
I will not dignify them with a response.
Vortex…no need to insult Andy.
I suspect that his level of brain cells outwit most of us here.
The fact that he has a stake in selling PMs is in part what likely motivates him to help educate us.
I and many others realize that there is a risk for Andy to speak as honestly as he does about what goes on and we should thank him for being here.
Most here fully understand the big picture even if we may not choose to speak as honestly as we might wish at times.
I know I hold back on some statements because we live in a world that continues to undermine civil liberties.
We must all understand that as Western Governments instal laws to protect us from threats, we increase to possibility of those laws being used to silence dissenting voices like ours.
Yes, western governments have made grave errors in the past. Now we enter into a time where we must all pay the price of mistakes made.
I do agree with your statement that it would be very easy to determine who has purchased PMs so targeting would in fact be very easy in my view.
This article is for Vortex…
Is Greece sticking to their plan……
Maybe it is time to allow the truth to come out.
With this government anythings possible, but it seems like a waste of time for the big boys to mess with the little guys.
Some people have a little gold, but not that much compared to the trillions they deal with annually.
What are they going to do, make it illegal to own gold, and go house to house to scrape up a few ounces here and there! LOL
I’m doubting it.
IMO, they don’t have to go house to house or guess who has what in a SD box. TPTB have a listing of every gold transaction i’ve ever been involved in(along with every phone call, e-mail, etc). If personal confiscation is part of their plan it will be very difficult to stay under that radar(unless you’ve been buying with cash which is unlikely for most).
If the world gets that ugly, it won’t be worth living in. And here’s my answer to all such “what if” question…
Greece talks suck in impasse, Terrible retail numbers sinking to new lows, Baltic Dry Index sets record low
and as a result:
NASDAQ sets its record high!!!
I want to know which freaking planet we live on? I suggest we (all of us for whom facts matter) move to a different planet with the precious metals and start a new honest civilization anew. And leave this disintegrating planet of dishonesty to the freaking morons.
Amen, but I assure you “Economic Mother Nature” will eventually win out.