When we wrote the world is “coming apart at the seams” last week, we weren’t kidding! Watching Western “manipulation mechanisms” blatantly attempt to prevent universal realization that we have arrived at “2008, with one temporary exception,” it could not be clearer how close the end game is to arriving in full force. Yesterday, for example, as global stocks and sovereign yields plunged to new 52-week lows, the U.S. manipulators came in with a vengeance – at the same 10:00 AM EST “key attack time” as usual; i.e., when physical precious metal markets close and the Fed executes its daily “permanent open market operations.” Subsequently, gold was stopped by a prototypical “Cartel Herald” algorithm at its month-old “line in the sand” at $1,250/oz.; whilst the “Dow Jones Propaganda Average” reversed a 100-point decline via equally prototypical “dead ringer” algorithm; and, last but not least, the Fed instituted its “new Hail Mary trade” – of boosting plunging yields to prevent universal realization of the “most damning proof yet of QE failure.” Commodities and currencies crashed nonetheless, and not a shred of positive news was to be seen. Only propaganda as far as the eye can see, such as this horrific sign-of-the-times – of a President lying in Orwellian fashion.
Clearly, market manipulation has taken an exponential step forward on its inevitable crash course with catastrophic failure. The moral hazard created is simply astonishing; as just before October’s carnage, the remaining “hedge bombs” were more equity-long that at any time since the 2007 top – at valuations challenging their highest ever, amidst the most dangerous geopolitical, economic and financial environment in decades.
By early this morning – again, with no news of note – yesterday’s PPT failures were in full view for the world to see. European and U.S. stock futures were plunging anew, the benchmark 10-year Treasury yield was again down to 2.15%; and gold had again breached $1,250/oz., having avoided the “2:15 AM” raid experienced on 90% of all trading days. But then, “magically,” another “rumor” saved the day – that the ECB was not only monetizing sovereign and mortgage-backed bonds but considering corporate bonds as well. Frankly, I could not think of a more insane idea – or moral hazard – particularly as corporate bond yields have already been taken to record lows by Central bank rate repression. I mean, what are they going to do that hasn’t already been done already – buy bonds of Portugal’s Espirito Santo? The “rumor” was immediately refuted, of course – but not until the aforementioned trio of “manipulation operatives” did their dirty work. The chart below of Germany’s DAX index depicts the German time zone; and thus, all three charts equate to 3:00 AM EST – which, FYI, was the Cartel’s standard “key attack time” until it “backed up” to 2:15 AM two years ago. Yeah, I know, markets can’t possibly be rigged. So I guess that the estimated $41 billion of bank fines for market manipulation are just a figment of our imagination?
Remember, we only go to so much detail in describing such manipulation to educate of the reality of “financial markets” – and of course, that precious metals have never been more undervalued. The fact is fraudulent “markets” have never been further separated from the real economy or traditional valuation metrics; and given “Economic Mother Nature” never loses, it’s only a matter of time until said reality arrives with a vengeance. Not that she hasn’t already – in countless, less expertly manipulated markets the world round. But ultimately – likely, sooner rather than later – her presence will be felt everywhere; particularly at the “epicenters” of global economic destruction – America, Europe and Japan.
Which brings me to today’s very important topic, as memorialized by four side-by-side MSM “top stories” yesterday morning.
Yes, “deflation” certainly is a problem – but only for the “1%” privy to the Fed’s unfettered free money, as the aforementioned “manipulation operatives” that support the markets they invest in are being overwhelmed by reality. As for the global cost of living, it has never been higher – particularly in light of multi-decade lows in real income in most Western nations. And while the clueless MSM spends its time focusing on the “relief” consumers feel that lower gasoline prices are causing – as a tiny sliver of their costs decline; they conveniently ignore the “unspeakable horrors” crashing oil prices portend; much less, the massive unemployment surge it will catalyze here in America – as one of its only booming businesses, fracking implodes.
Which brings us to our main point – that not only is “de-dollarization” rapidly draining the cancerous dollar’s “reserve status” but America’s lack of global competitiveness, declining entrepreneurship, and socialistic embrace has accelerated this inevitability exponentially. To wit, it’s one thing when its largest most iconic technology company – IBM – impales itself on the altar of financial engineering (MUST READ article by David Stockman). However, we are talking about a “parade of failure” from a broad list of America’s top companies, including last month’s earnings horror from Amazon.com, last week’s from eBay and Walmart, and today’s from McDonalds and Coca-Cola.
In July’s “need versus want, demand is dying,” we wrote of how not only are “want” vendors like Amazon.com are suffering dramatic sales declines, but “need” purveyors like McDonalds and Walmart – the latter of which, sadly, actually cites government reductions in food stamp payments as a significant contributor to revenue weakness. However, given the ongoing parade of corporate titan’s falling off the wagon, even the most jaded propagandists are having trouble citing “non-recurring issues” – like food stamp reductions, “the weather” and others.
Clearly, a slew of coalescing factors are contributing to the American corporate decline – not the least of which, as directly cited by Coke this morning, is the “strong dollar” we have screamed for months about. As we predicted, the Fed itself warned of the ramifications of a strong dollar in their (retroactively doctored) FOMC minutes last week as it strives to “win” the unwinnable “final currency war.” Effectively, multi-national corporations are negatively impacted by both “strong” and “weak” dollar movements, in what we deem the “single most precious metals bullish factor imaginable.” In other words, extreme currency volatility – the hallmark of fiat currency regimes – is catastrophic to corporate earnings (and planning). And thus, until real money returns, they will continue to be enveloped by this horrifying financial storm.
The fact that WMT, MCD and KO are all components of the Dow Jones Propaganda Average only increases PPT stress – stacking the odds further against their ill-begotten, world-destroying plans. As noted yesterday, the world’s greatest debt enabler – Visa and most notorious financial mobster – Goldman Sachs are now the two largest representatives of America’s most prestigious equity index. And if that doesn’t describe how rapidly the “guard” is changing – for the worse – we don’t know what does.
Actually, we do – as the global secession movements resultant of decades of financial repression gain momentum. Last month’s Scotland independence referendum was just a “shot across the bow” – to be revisited November 9th when Catalonia, Spain votes whether to secede from Spain, taking with it a quarter of the hopelessly socialist nation’s tax revenue. And don’t forget the rapidly approaching date of potential destiny, November 30th – when Swiss citizens vote whether the Franc should be re-linked to gold to the tune of nearly $100 billion worth at current prices.
To that end, given this morning’s headline – while simultaneously, the GLD ETF’s inventory plunges to a multi-year low – you can bet TPTB are in near panic mode.
Yes, friends, a “changing of the guard” is indeed at hand. If the Swiss do in fact vote “yes”; mark our words, the big bad “New York Gold Pool” will immediately suffer the fate of London Gold Pool in 1968, and all other efforts to suppress real money throughout the centuries. And thus, we ask, do you want to be on the right side of this generational trade – or the wrong side of history?