I have watched every tick of the Precious Metals market for 14½ years, since the fateful day in May 2002 when I bought my first 100 shares of Newmont Mining, en route to putting essentially all of my liquid assets into the sector. Frankly, the 1% position I have taken in Bitcoin is as exciting as any development in my investment career – as until Bitcoin, I have not come across any asset class since 2002 worth investing in. And by investing, I mean the classical definition of such, not today’s bastardized concept of speculating in overvalued assets based on the expectation of what Central banks and government manipulation operatives might do. To borrow from Richard Russell’s lingo, I take big positions in primary trends I deem to have extremely high return/risk profiles. And the more confident I am in such a trend, the more I invest. Hence, my 1% position in Bitcoin, versus 90% in physical Precious Metals.
To that end, while I am highly confident that cryptocurrency will dominate the monetary future, the road to that end will be very rocky. In other words, I’m not sure Bitcoin itself, in its current form, will dominate the future monetary landscape – although at the least, its unique characteristics, and dominant first mover advantage, make it highly likely to serve as a store of value. Conversely, 5,000 years of history – versus seven for Bitcoin; including the world’s biggest money aggressively accumulating now, tells me the risk/reward profile of physical Precious Metals is as powerful as anything I’ve experienced in my career. That, and the fact that prices have been blatantly suppressed below their true values – by governments so desperate to maintain the dying status quo, they will sacrifice the future of the human race in the quest of kicking the can a few more inches, down a road in which the “monetary wall,” stronger and more unyielding than any in history, stands right in front of them.
To that end, my 14½ years of PM experience – during which, I have inarguably become one of the world’s leading “Cartel experts” – tells me the end game is not just “coming,” but right in front of our eyes. For most of the world’s 7.4 billion denizens, the end game has already arrived – in the form of collapsing currencies, as history’s largest, most destructive fiat Ponzi scheme implodes. The world’s “reserve currency,” due to the superior power of its Central bank’s printing press, has not collapsed as rapidly, or dramatically. Not yet, that is. However, the price of this (historically infinitesimal) resistance has been the largest debts in global history, the greatest wealth disparity since feudal times, and a guaranteed violent end.
To that end, the Fed is, unequivocally so, more responsible for the political, economic, and monetary hell the world is just starting to experience. However, politicians, Central bankers, and corporate titans throughout the entire Western world – and parts of the East, such as China and Japan – are equally guilty of fostering a Ponzi scheme that has distorted the world’s economic balance so dramatically, it will likely take generations to normalize. Hopefully, in the absence of major wars; which unfortunately, history tells us is highly unlikely.
As for said “precipice,” let’s just put its this way. I have witnessed every major Cartel initiative of the 21st Century; as well as every day-to-day, and minute-to-minute operation. And yes, “named storm” attacks like September 2011’s “Operation PM Annihilation I”; December 2012’s “Operation PM Annihilation II”; February 2012’s “Leap Day Violation”; and April 2013’s “Alternative Currency Destruction” attacks were more violent, in absolute terms. That said, never has my “manipulation mantra” of “every day worse than the last” been more apropos than the past month. That is, since the Brexit, which a month beforehand, I deemed the “most important, and Precious Metal bullish, election ever.” Since then, irrespective of the aforementioned, maniacal Cartel suppression – to the point that the COMEX “commercials” have taken their record naked shorts to unprecedented levels – gold has pushed right up against the artificial “downtrend line” created by the aforementioned named storm attacks, at roughly $1,360-$1,370/oz; whilst silver has surged right up to its 50-month moving average of $20.45/oz. Yes, the Cartel has attempted to “mask” its fears of these critical levels by creating “secondary” lines in the sand at the key round numbers of $1,350/oz and $20/oz, respectively. However, make no mistake, the former levels are their ultimate lines in the sand – as when they are inevitably broken, the entire world will see that the four year, Cartel-engineered “bear market” in dollar-priced gold and silver is decidedly OVER. Just as it has been in ALL other currencies for as much as two years.
The past week alone, we have seen some of the most “PM bullish, everything-else-bearish” headlines imaginable, from all corners of the Earth. Economically, horrific U.S., Japanese, and Eurozone GDP say all, accentuated by plunging Chinese trade data, and U.S. retail sales and productivity. In fact, this very morning, U.S. “rate hike odds” plunged anew – specifically, to 9% for September and 28% for December; whilst comically, “Goldman Bill” Dudley, head of the New York Fed, spewed pathetic propaganda, desperate to save both “face” and Hillary Clinton’s dying election prospects, by claiming bond markets are too complacent, as the Fed is “getting closer to the time” it would raise rates. Really? “Getting closer?” So why are rates worldwide at record lows – including $13.4 trillion of bonds with negative yields? And why are no rate hikes “priced in” until mid-2017?
And for those claiming this morning’s July industrial production “beat” – at 0.7% versus the expected 0.3% – was due to a “stronger than expected” economy; not only are all such numbers “seasonally adjusted,” but the only reason it “beat” was because June’s number was revised dramatically downward. And FYI, the only strong component of the industrial production index – by far – was utilities, which surged more than 2% due to the most powerful summer heat wave in U.S. history. Irrespective, industrial production declined year-over-year for the 11th straight month, representing the longest such negative streak in U.S. history, at a time we were not, LOL, in recession.
Of course, collapsing economic activity is just one symptom of the distortions of the aforementioned, unprecedented, global fiat Ponzi scheme. Zero, and sub-zero, interest rates – and the promise of unlimited QE – have created the largest financial asset bubble in history; cumulatively, far greater than 2000 and 2008 combined. Consequently, dead-in-the-water companies’ stocks are trading at all-time high valuations; insolvent sovereigns and weak – often, terminally so – corporations and municipalities are trading at negative yields; and Central banks are holding massive, unsellable portfolios of high duration, patently worthless government, mortgage, and corporate debt. Moreover, massive housing bubbles have developed in high-end markets due to money laundering and the parking of massive, illicit financial gains garnered by the “1%” privy to Central banks’ free money and market rigging activities, causing the cost – but decidedly not the standard – of living to surge for the rest.
Contributing to the horrific economic woes, featuring the highest level of industrial, commodity, and government “oversupply” in history, is the most ominous “demographic cliff” the world has ever faced – given that it now has 7.4 billion people, whilst the maligned demographic regions, such as Europe, Japan, the U.S., and China, are not only the most indebted; and the biggest printing press abusers; but produce the vast majority of the world’s economic output.
To wit, today’s Bundesbank announcement that it is recommending an increase in the German retirement age to 69 – which tells us all we need to know about the ugly direction the world is heading. Which, I might add, was principally due to the fact that the vast majority of German pensions are dramatically underfunded, due to the German governments’ own – via leadership of the NIRP-promulgating ECB – destructive policies. In fact, this very morning, i read one of the most terrifying articles ever – about this very topic. Specifically, why rates can NEVER be raised once the insurance Ponzi scheme takes hold – which is exactly where we stand today; and exactly why ALL bond yields may soon be negative. That is, until hyperinflation inevitably “comes to town,” destroying every financial asset in its path.
Heck, I haven’t even gotten started regarding the myriad factors causing the Cartel – and generally speaking, all market manipulation operatives – to go berserk this month. Such as, LOL, this morning’s year-over-year CPI reading of +2.2% – albeit, unchanged month-over-month – being over the Fed’s stated “rate hike threshold” of 2.0% for the ninth straight month. And the funny thing is, the reason it was not higher than last month was due to the plunge in oil prices that should have occurred, and will unquestionably return shortly, given how horrific oil – and nearly all commodity – fundamentals are. In other words, next months’ reading will incorporate the latest “oil PPT” orchestrated short-squeeze, putting further pressure on the Fed, despite imploding real economic activity.
Oh, and did I mention the dollar/yen plunging below 100 this morning, to a new post-Brexit low, last seen two years ago? This, despite the Bank of Japan pledging to essentially buy the entire Japanese stock market, in its latest miserable monetary policy failure. Which of course, will only prompt them to ease further in September – which they’ve already telegraphed; which will only create uglier, more destructive market and economic distortions, invariably “PM bullish, everything-else-bearish.”
And how about this article, of how average U.S. healthcare premiums are expected to rise 24% in 2017? Or the increasing likelihood that the election will be thrown into chaos by Hillary Clinton’s obviously declining health? Or Turkey threatening Europe to unleash millions of Syrian refugees if the European Commission doesn’t meet its demands? Or record U.S. equity outflows, compounding the PPT’s already Herculean efforts? Or Portugal’s banking system falling apart more rapidly than Italy’s – which despite last week’s “bailout” hype, has not improved one iota? Or Deutsche Bank, who’s modest, PPT-supported equity bounce has barely moved the needle, whilst its gargantuan insolvency continues to stare us squarely in the face.
No, the Cartel’s best efforts to prevent gold and silver from taking out the aforementioned “key resistance levels” will not succeed – including today’s, which is sucking wind as I write.
And trust me, if the Fed continues to play the “imminent rate hike” card without regard for its rapidly dying credibility – such as, for instance, when tomorrow’s July “minutes” are released – they may create the polar opposite market response as desired; like when PMs surged, whilst markets crashed after last December’s “rate hike.”
In my view, the Cartel’s defenses have never been weaker – and possibly, will fail in short order, “election protection” notwithstanding. Unquestionably, it is “on the precipice”; and if you don’t “capitalize” on their weakness, when doing so could mean the difference between financial destruction and salvation, it will truly be a shame.
Great article and I agree 100% with everything Andy has said! Keep up the good work.
One thought on what Andy calls a short squeeze in oil. If prices are going up on only a short squeeze, then perhaps they went down too far because of the shorting in the first place.
Markets tend to over shoot in both the up and down directions.
In medical-legal terms, what you describe is like watching the “relatives” try to keep the corpse alive until somehow the WILL can be changed.
Cant wait to read you each day Andy.
Andy I agree with you 100 %. All of us that have taken the Red pill watch these markets in disbelief at the TPTB ability to kick this mother [email protected]$#€£¥ can. Guess things will stay insane longer than must of us will stay sane. This article hit me like a ton of bricks & pretty much says it all (and your work of course)
The big question is will the people choose to watch all of their savings and paradigms of reality dissolve or will they give in to bailing out a corrupt system to save their financial wealth. In a society with this level of morals, well… I’d be curious to hear your take.