Looking back at the last three days’ articles, I’ve clearly been, even for me, riled by “deformations” so egregious – of financial markets, media commentary, and political and social goings-on – they’ve cumulatively dominated my writings. To that end, whilst I unwaveringly sleep the “sleep of the just” knowing my savings are in the only real money the world has known, there aren’t words for the demoralization I am currently experiencing each day. And thus, whilst my convictions of the Precious Metals “end game” have never been stronger, the pain experienced in watching it unfold is of equal force.
In other words, stark validation of what I wrote in last month’s “record PM demand, record low sentiment”; as unquestionably, U.S. Precious Metals sentiment is back to levels before the bull market commenced in 1999, whilst global physical demand is unquestionably at an all-time high. To wit, physical withdrawals from the Shanghai Gold Exchange alone are up 20% from a year ago, to a new all-time high – accounting for an astonishing 85% of total global production! And again, the operative term is U.S. Precious Metals sentiment; as throughout the world, plunging fiat currencies have caused gold prices to soar. And thus, whilst the Cartel has successfully suppressed “dollar-priced gold” 38% below its all-time high, the average global denizen sees gold at just 15%-20% below its local all-time high. Trust me, when dollar-priced gold is just 15%-20% below $1,920/oz again – i.e., $1,535-$1,630/oz – Precious Metal sentiment will be off the charts; likely, amidst a political, economic, and financial market situation bordering on chaos.
Fortunately for you, nothing inspires me more than financial survival and the spreading of truth – which is why it’s such a pleasure working for Miles Franklin. Andy and David Schectman, who co-manage the firm they launched in 1999, share these traits; and due to a combination of hard work, business savvy, and personal commitment to our product, have successfully built Miles Franklin for 26 years, through fat times and lean. Consequently, we are well positioned to weather the storm that commenced with TPTB’s “point of no return” manipulation acceleration in mid-2011; as opposed to many of our competitors, some of whom have resorted to deep price discounting just to pay the bills. Just as Tulving did two years ago, when it went bankrupt holding millions of dollars of clients’ money. Remember, in the largely unregulated bullion business – except, ironically, in our home state of Minnesota – you “get what you pay for.” Miles Franklin can compete with essentially anyone on price and service – which is why we have been around for 26 years, with a perfect Better Business Bureau rating. That said, if you see a bullion dealer offering prices well below the rest, you can bet they’re amidst significant financial hardship. To which we advise, RUN, and do so swiftly.
Back to the angst that clearly showed itself in “Father’s Day Musings – of an Ominous, Uncertain World”; “Entropy and Chaos”; and “Hamilton vs. Jackson, and Bernanke vs. Real Money,” I’m finding it progressively harder to find authentic, factual material to work with – given just how lazy the journalistic world has become, and how anesthetized investors have become to financial markets that no longer allow negative news to be discounted. At least, not in “last to go” markets like the “Dow Jones Propaganda Average” and paper gold and silver – as opposed to the commodity; currency; and recently, fixed income markets, which are clearly starting to spiral out of TPTB’s control.
Of course, as I vehemently emphasized in last week’s “end of the new normal,” there is NO WAY “Economic Mother Nature” can be defeated. And clearly, when said financial markets start to unravel – whilst debt, money printing, and social and geopolitical turmoil go parabolic – said “end game” is unquestionably near. In other words, if ever there was a time to fight the fear, apathy, and lethargy said “powers that be” have engendered, it is NOW. Fortunately, not only is the window to PROTECT YOURSELF with physical precious metals still open; but care of Cartel suppression, you have been afforded the ability to do so at amongst the cheapest valuation’s gold and silver have ever traded at – whether measured against the cost of production, the amount of fiat currency (and associated debt) created, or the cumulative level of global financial, economic, and political risk. And on the topic of the cost of production, recall how yesterday, I wrote of the dire condition of countless major miners – many of which, in my view, will be in extreme financial distress by year-end if prices don’t’ dramatically increase beforehand.
To wit, this laughable press release by one of the world’s largest primary silver miners, Coeure D’Alene – which has been on my “potential bankruptcy list” for the past year – of the desperation bond offering, and draconian capital expenditure and production cuts, they completed yesterday to “increase cash flow,” as they continue to hemorrhage equity at an alarming rate. This is exactly why I believe gold industry production has peaked; and why the silver production peak will be right on its heels – with a potentially far larger production decline as base metal prices inexorably decline, amidst the worst global economic conditions, and mining infrastructure oversupply, of our lifetimes.
Back to the news, the madness we are witnessing, on a global scope, is unprecedented since World War II. Fortunately, the Miles Franklin Blog’s focus is principally on the financial side of things, lest my head would probably explode. And even so, it’s on the verge of doing so – as wherever one looks, gross “deformations” are patently obvious; from the spectacular equity bubble inadvertently created by the “chickens without heads” at the PBOC; the lunacy of Japan’s Abenomics – where, two years after it commenced, Shinzo Abe’s approval ratings just hit an all-time low; to the U.S., where home sales remain at recessionary levels despite record low mortgage rates and six years of stock market goosing; except, “coincidentally,” in the “Northeast” region that receives the vast majority of free, printed money. I.e., the canyons of Wall Street, and the suburbs of Washington D.C. As for the “99%,” they are living through the lowest home ownership – and family formation – rates in generations; and adding insult to injury, record high rents.
As for Europe, it could not be clearer that not only have the “PIIGS” failed – in large part, due to Wall Street chicanery – but the entire, ill-begotten, ill-fated Euro zone experiment, incorporating the European Commission, European Parliament, European Central Bank, and the Euro currency itself. And no, the Euro currency is decidedly not “too big to fail”; as unlike the U.S. dollar, there are simply too many countervailing political forces to control. Here in the States, we simply have to deal with a handful of crackpots that still believe the Confederacy still exists, 150 years after its defeat. However, as I wrote four years ago, Europe is a far more untamable animal – particularly in light of its horrifying financial and economic condition (which four years ago, was vastly better than today). To wit, what I wrote in August 2011.
“The Eurozone is comprised of 23 countries, each of which had its own currency, language, and culture centuries before the Euro’s creation in 1999. When economic times were good in the early 2000s, the ruinous fiscal policies of the PIIGS were obscured by more responsible members such as Germany, Finland, and the Netherlands. Germany’s obsession with creating a unified monetary system clouded its judgment, allowing the PIIGS to rot the system from the inside out – and now that economic times have turned bad (is that an understatement of what?), they are realizing just how blinded they allowed themselves to become. Consequently, the Eurozone system is on the verge of collapse; and frankly I’d be shocked it if survives another 12 months.
Well, it didn’t collapse 12 months later; but only because eleven months later, in July 2012 – with the entire PIIGS complex on the verge of collapse – Mario Draghi claimed he would do “whatever it takes” to save the Euro, suggesting the very open-ended QE scheme we are witnessing today. In other words, “Goldman Mario” and his team of ECB buffoons will have you believe – in the ultimate illustration of irony – that the Euro can be saved by hyper-inflating it. Which is decidedly what they have done; as since Draghi took over the ECB – “coincidentally” in November 2011, right around the time of said “point of no return” – the Euro has plunged by 22% against the dollar, yielding untold inflationary horrors for hundreds of millions of European citizens. Not to mention, billions of global denizens holding lesser currencies, who were the primary “beneficiaries” of the inflation exported to them by the ECB, Fed, and other issuers of “stronger” fiat currencies. But don’t worry, the ECB claims “deflation” to be the biggest problem.
As for Greece – the birthplace of democracy, fine arts, and countless other timeless benefits; it was simply the weakest link in a chain of weak links, doomed from the start, given a culture of economic laxness that, ironically, starkly contrasts with the renowned work ethic of its shipbuilders, diner owners, and other business luminaries (those who live in New York, know exactly what I mean about Greek diners). And whether the lure of Goldman Sachs’ financial engineering sirens; the complacency of believing the ECB “had their back”; a disproportionately devastating impact from the 2008 crisis; or otherwise, Greece is as dead broke as any country on the planet – which is saying a lot, given how many “third world” banana republics are out there.
Ironically, Greece’s principal creditors are the very entities that welcomed it with open arms in 1999, despite it not meeting the Maastricht entrance criteria; greedily, hoping to sponge off Greece’s then prolific tourism and shipbuilding industries. Fast forward to today, and said “allies” are feeding it more and more debt – nearly €250 billion of “bailouts,” and counting – whilst counter productively, demanding the same “austerity” measures they themselves have ignored. At this point, Greece is so indebted, and so politically, economically, and social devastated, there is not a chance of survival under the current, warlord-like debt regime. This is why the decidedly “anti-austerity” (read, anti-Euro, pro-default) Syriza party swept into power in February, and why the “Grexit” we guaranteed two years ago is likely as imminent as it is inevitable.
“I have ZERO doubt that – one way or the other – Greece will eventually exit the EuroZone; potentially, providing the “flash point” catalyzing the end of the Western banking system; and with it, Financial Armageddon.”
Today (Wednesday), we are just six days from the conclusion of the second bailout; with nary a hope or prayer of a third, substantial bailout – no matter how much markets and media outlets are manipulated to paint such a picture. Frankly, after today’s all out collapse of “deal” talks – with everyone from the negotiating parties to their various constituents in complete disarray – the odds of an acceptable agreement being reached; let alone, ratified by said constituents, appear close to zero. Not that such a “deal” would be anything but a temporary band-aid on a gaping wound. However, at this point, a Greek default and euro zone/currency exit are all but a fait accompli.
Regarding today’s title, can the Greek fallout be “contained” when it inevitably occurs – without a simultaneous collapse of first the PIIGS credits; second, the European political, economic, and social fabric; third, the Euro currency itself; and fourth, the multitude of global “manipulation organizations” – particularly as their cumulative efforts have pushed financial assets to all-time high valuations; and conversely, history’s most reliable safe haven assets, gold and silver, to all-time low valuations.
I know where I have taken my stand; so the only question that remains is what you believe. And don’t take my words for the most likely, anarchistic chain of events – but instead, those of Marine Le Pen, who most likely will be the next President of France.
“Today we’re talking about Grexit. Tomorrow it will be Brexit, and the day after tomorrow, it will be Frexit.”
And don’t forget for a second that the Spanish elections are just six months away – in which, the Syriza-like Podemos party is likely to win; with its Alexis Tsipras-like leader, Pablo Iglesias, likely to be its next Prime Minister.