The global macroeconomic – and geopolitical – situation is deteriorating so rapidly, it is literally impossible for my hyper-stimulated brain to slow down. It’s still Thursday night and I wanted to pen a few observations, starting with today’s “are you kidding” manipulation moment.
As we have said all along, TPTB can huff and puff all they want – but the more they do, the more cataclysmic the inevitable end game becomes. Frankly, I am speechless at times – of not only worldwide governments’ collective desperate behavior and Central banks creating bubbles dwarfing the late 1990s internet mania, but of the societal decline such policies have engendered. Just reading David Stockman’s latest article about Venture Capital firms colluding to drive the “pre-IPO” valuation of a company called “Snapchat” to $10 billion – nearly as much as the $13 billion valuation of Newmont Mining, the world’s second largest gold miner – I literally wanted to puke; as not only does Snapchat have no revenues (or for that matter, a cohesive business plan), but its business is enabling 100 million college-aged students to post “selfie” pictures online, before they disappear 15 seconds later.
Then we have the real world, where no less than a half dozen extremely ominous headlines surfaced in the Ukraine. Frankly, it amazes me how powerful the short-term “market manipulation spell” has been, as clearly Ukraine is headed for something extremely wicked – as well as Iraq, Syria and countless other geopolitical hot spots. The fact that oil prices have fallen from $107 to $94 in recent weeks, yet my local gasoline price remains near its highs, should tell you just how ugly the potential economic damage could be from these cumulative “black swan” hot buttons. And sadly, the world wouldn’t be much better if all was quiet on the Middle Eastern front. Of course, the principal reason wars are breaking out globally is the inflation exported by maniacal Western money printing, so there really isn’t a way of separating their collective influences.
Of course, the most important story of the day – and year – is the ominous collapse in global interest rates we have shouted from the rooftops about all year. In our view, there is no more “damning proof of QE failure” than collapsing rates amidst hyperinflationary money printing, which must continue given the gathering global consensus that what we predicted all along – “QE to Infinity” – is a fait accompli in the terminal stage of fiat currency Ponzi schemes. To wit, essentially all nations are stuck in the same “QE trap,” which after 43 years has finally been universally sprung. Watching the benchmark U.S. 10-year Treasury implode today to 2.34% – amidst the “good news” of a (fraudulent) upward GDP revision, we couldn’t be more validated in our views, nor more terrified of their ramifications. And by the way, embedded in the 2Q GDP numbers was a price deflator of 2.1%; in other words, above the 2.0% “rate rise” threshold Janet Yellen, just last week said wouldn’t occur until years down the road. But hey, we told you the “2.0% inflation threshold” would be dropped as speedily as the “6.5% unemployment rate threshold,” so no one should be surprised.
Worldwide economic activity is rapidly approaching 2008-level freefall speed with the only remaining “cushion” being history’s most blatant, heavy-handed, hyperinflationary money printing and market support. Heck, look at Japan’s economic data from tonight, including a much higher than expected 3.4% inflation rate, a 5.9% collapse in July household spending and a 0.5% decline in retail sales – combined with surging unemployment to a nine-month high. Thank god the BOJ is now overtly buying stocks, or else tonight’s miniscule losses would probably morph into a 1929-like crash. Hey, just a few months left until Abenomics must be “doubled up.” Gee, what could go wrong? Then again, at least they can wait a few months – as opposed to “Goldman Mario” Draghi, who if he can’t goose markets in the next few days, will be forced to commit Europe to its own version of “QE to Infinity” next Thursday.
And last but not least, under the heading of “how foolish do they think the entire world is?” is today’s comically blatant paper PM raids. In gold’s case, what a shock, capped at exactly the Cartel’s 1.0% upside cap at exactly the COMEX open…
…with a second decline at precisely the 10:00 AM EST “key attack time number #1” (when global physical markets closed), coincident with interest rates plunging to their low of the day, whilst the PPT executed a perfect “dead ringer” algorithm to defend the Dow Jones Propaganda Average.
As for silver, it does not get more obvious how terrified the Cartel is of the “financial world’s Achilles Heel” destroying them – which we assure you, it will. I mean, seriously, we are at the end of the COMEX delivery period; and despite every attempt to attack silver, roughly half the miniscule 60 million ounces of silver is spoken for (as if that matters, as the Cartel hasn’t allowed a single ounce of the hundreds of thousands demand this year to be delivered). Geez, this doesn’t even qualify as an exchange anymore, it is getting so obvious. Think about it, what are the odds that – on a week, when massive physical demand threatens to destroy the Cartel’s silver naked shorting scheme entirely, that silver would be attacked at the exact moment the COMEX opened every day of the week?
Oh well, we’ll just have to sit tight with our holdings of real money – which care of record U.S. Mint and Royal Canadian Mint statistics are flying off the shelves at rates above last year’s records. Moreover, I noted last week that Miles Franklin has seen surging demand all month; and given such an environment going into the year’s busiest period, the Cartel appears to be on or close to death’s door. Heck, the Sprott Physical Silver Trust (PSLV) closed at a year-high premium of 3.0% – putting it dangerously close to levels where “Admiral Sprott” can launch a Cartel-killing offering, whilst Euro Gold is on the verge of breaking above the very, very key round level of €1,000 – as it completes a massive year-long reverse head-and shoulders pattern.
Frankly, we cannot conceive a more cataclysmic set of circumstances for both the global economy in general, and the gold Cartel specifically. Act now, before “traders” return from summer vacations next week or you may be locked out of the most important “protection trade” of all time!
Can you explain why yields drop if they are actually printing QE and to infinity?
How can you also tell “real” bond buyers from just covert fed buyers
Red, I have written every day for the past four months of the “most damning proof yet of QE failure.” This is the Fed watching rates plunge as they propagandize recovery, and pretend they might one day raise rates (because they believe the goosed stock market can handle it).
I have said forever, too, that what they say and do are too different things. In “proof of the tapering mirage,” I proved they were “QEing” twice as much as they said. Not to mention, when the “Belgian buyer” (i.e., stepped in after the Chinese said they were no longer buying). In “3.0%, Nuff Said,” I said they were QEing more than they said (i.e., the Belgian buyer) to keep rates down, and in “2.6%, Nuff Said” I said they were covertly selling bonds to keep rates up – which they are decidedly failing at.
PSLV closed at a premium of 4.62 on Friday which was down from very close to 5% on Friday. It is about time for Admiral Sprott to do his thing, indeed. A 20 million oz offering would probably do the trick. Why he doesn’t is a question you guys in the industry that can talk to him ought to ask.
I suspect he doesn’t want to destroy the premium and hurt investors such as myself for one thing, though I think the harm would be short lived….Secondly, he probably can’t get the metal out of the COMEX.
Would appreciate your published comments on this….
Here is a link to Sprott Silver Trust’s NAV to price.
(highlight and right click to open in a new window….)
I wrote of this Friday, when it closed at a premium of 3.0% – it’s highest in a year or so.
“The Sprott Physical Silver Trust (PSLV) closed at a year-high premium of 3.0% – putting it dangerously close to levels where “Admiral Sprott” can launch a Cartel-killing offering.”
And yesterday, it closed closer to 2.5%, so I don’t think 4.6% is correct.
FYI, in discussions with them a year or so ago, I was under the impression they’d need a 5% premium (or so) to consider a near deal. However, recall that in 2012 they did deals with premiums significantly below 5%. So just keep watching, as one never knows what the Admiral will do.
I think one of your people wrote this, Andy or Holter, and I think it is loaded with foresight….
“Soon, every major bond market will approach the zero bound, (zero interest rates) as the terminal phase of history’s largest Ponzi scheme experiences the financial equivalent of the tide receding before a catastrophic tsunami of hyperinflation.”
Not quite sure how this would play out but with the DOW up another 2 or 3 hundred points, heavy buying of bonds might be occurring so the FED doesn’t have to do the buying to provide the government with funding, all of a sudden sentiment turns around and the FED has to meet every ask to maintain stability and their balance sheet explodes, sending confidence into the toilet….and the metals to the moon?
I’ll take credit for that one. And yes, you are right on. What I wrote to COL Mike above nails it on the head…
“What the Fed says and does are two different things. More importantly, they ONLY care about markets (and the banks that own them), not the economy. The reason I refer to the “most damning proof yet of QE failure” every day – calling it the most important article I’ve written – is because it couldn’t be clearer that the markets are defeating the Fed’s attempts to propagandize “recovery” and manipulate rates (very gently) higher to foster such beliefs. Rates will go to ZERO as the entire world realizes QE to Infinity is here to stay; that is, until hyperinflation inevitably arrives and rates explode.”
Thanks, I did read your prior articles but I can’t make sense out of them. I’m not a finance guy 🙁
Just keep repeating to yourself one thing, and all will be clear…
THE FED ARE LIARS, ABOUT EVERYTHING THEY SAY, AND EVERYTHING THEY CLAIM TO DO.
Yes I reread them quite often. This is the statement I just don’t understand: “Rates will go to ZERO as the entire world realizes QE to Infinity is here to stay; that is, until hyperinflation inevitably arrives and rates explode”
Can u explain that so a sixth grader can understand that, and why! Thx
It simply means the world’s money managers are “front running” the inevitability of further Central bank sovereign debt monetization, a la “QE.”
It’s clear the end of QE is a bad joke. Recently when I asked a small bank CFO “if tapering is actually occurring why is it that interest rates are not climbing?” He looked at me with a puzzled look and said “Yes, interest rates should be climbing right now”. I helped him fill in the blanks by telling him there is no real market is bonds, etc. At this point in the Ponzi scheme there are very few real markets. I also remember several months ago when Mr. Sinclair said the USD Forex would drop quickly quickly if Russia announced they are going to drop the USD, Gazprom transactions, etc. Yah, but that’s assuming the Forex is a real market. Funny thing, I can’t put my finger on it, but I’ve never trusted Jim. The same thing goes for Mr. Rogers. He’s always has a standard line such as “I’m not buying now, but if it goes down some more I may buy more if I’m smart enough”. What kind of stupid Forest G talk is that. What he should say, if you don’t have a position get it Right Now!
Sorry, but it has been a late night with everything going on with fires going off like popcorn, and on top of it all we have an Ebola outbreak that is out of control.
Wow, what a surprise the Jimmies would say.
Yes, as I have written incessantly, what the Fed says and does are two different things. More importantly, they ONLY care about markets (and the banks that own them), not the economy. The reason I refer to the “most damning proof yet of QE failure” every day – calling it the most important article I’ve written – is because it couldn’t be clearer that the markets are defeating the Fed’s attempts to propagandize “recovery” and manipulate rates (very gently) higher to foster such beliefs. Rates will go to ZERO as the entire world realizes QE to Infinity is here to stay; that is, until hyperinflation inevitably arrives and rates explode.
As for Sinclair’s call of 52 in the dollar index, I never understood it. If confidence in the dollar collapses, you can be Europe will be collapsing too (58% of the dollar index), let alone Japan (14%). Ultimately, all that matters is what the various fiat trash can purchase of real items of value, not each other.
And as for Rogers, here’s what I wrote of him last year (/the-king-of-mainstream-sellouts).
I read your writings every day and appreciate your analysis of what is really going on. Would you please enlighten us why Martin Armstrong is wrong about gold. He has quite a big influence in gold community. I think he is right a lot about cycles but wrong with his conclusion about gold.
Here’s what I wrote on the topic two years back…
Thanks for your previous writing on Jim Rogers! He certainly is a bottom feeder Sociopath that could care less about the average person. Again, thanks for everything you do to inform the public.
You’re very welcome!