Last night, Andy Schectman opened Miles Franklin’s “Protect Your Wealth” dinner by caveating that some of the issues we discuss may border the “tin foil hat” realm. I assure you, there’s not a single topic that Andy, David Schectman, Bill Holter or myself introduce that is not 100% fact based; although, just like all analysts, we at some point must make “educated guesses” regarding non-public variables. That said, even amidst “truth-friendly” circles, the ability – and/or desire – to reject non-mainstream theories is powerful especially when such views necessitate beliefs that “something wicked this way comes.” In other words, normalcy bias can be a formidable barrier to overcome – which is why the Miles Franklin Blog works so hard to maintain its hard-earned credibility.
In my specific case, long-time readers know I am a formally trained financial analyst – with a finance degree, CFA charter, and like Miles Franklin, 25 years of experience. In 2005, I purposefully left Wall Street after a 16-year career, disgusted by the conflict of interest inherent in a business clearly not run for the benefit of its clients; and sadly, 2005 represents the “good old days” compared to today’s world of outright criminality. In fact, my last six years were spent at Citigroup-owned Salomon Smith Barney; i.e., the very same firm Michael Lewis – of “Flash Boys” fame – left 15 years earlier, for the very same reason.
What made me a great analyst – as validated by four straight years of Institutional Investor ranking – was my focus on FACT, not speculation. Clearly, this “mantra” was just as important in the mainstream – in my case, oilfield services equity research – as the “shadow world” of Precious Metals and to the day I die, you can be sure that anything I write is based on such. And thus, the caveat” that what I present could be considered conspiratorial is not necesseary; as while I was long ago forced to disavow my views that markets are freely traded, I will never abandon the critical analytical process.
Last night, for example, I highlighted how the Cartel does its “best work” in the wee hours – when trading volume is thinnest, and news flow lightest. “Sunday night Sentiment” attacks are a perfect example – as most Westerners are still enjoying their weekends, whilst most Easterners have barely woken up. Better yet, 2:15 AM EST represents the “pre-market” open of Western paper markets, whilst 7:00 AM EST is when New York traders first hop off crowded, subways. I assure you, it’s no “coincidence” that gold’s gains were stopped cold yesterday at exactly the 1.0% level that has defined its daily “ceiling” on 99% of all trading days for the past 15 years; or in silver’s case, that despite surging oil prices, a plunging dollar, and further escalation of the Ukrainian crisis, it was somehow “walked back down” to the very, very key round number of $20 that has served as the Cartel’s “line in the sand” for the past year and that, despite $20 being well below the cost of production.
Subsequently, I told the audience to check their screens when they awoke this morning as there was a 90% chance – particularly after an up day – that not only would gold be attacked at 2:15 AM, but with a prototypical “Cartel Herald” algorithm. Sure enough, on a night when oil held yesterday’s 2+% gains, the dollar held yesterday’s multi-month low, Japanese stocks were slammed and not a shred of “PM-negative” data emerged, this is what occurred at 2:15 AM. And what a surprise, a follow-up waterfall attack at 7:00 AM EST; i.e., the open of the thinly-traded New York “pre-market” session. To wit, Zero Hedge couldn’t have said it better in noting “with the pending release of the FOMC minutes today, what else is there to do but spark a momentum run in U.S. equity futures and dump precious metals like the status-quo-hating, barbarous relics they are?”
Yes, the March 20th FOMC minutes will be released today, at 2:00 PM EST. For decades, they were completely ignored by market participants, rightfully so; that is, until their release became a “key attack event” two years ago, just as the maniacal PM suppression stair-stepped higher. Can you even imagine gleaning incremenal info from the “minutes” of a meeting more than seven weeks ago after which, a press conference was given to thoroughly discuss its conclusions, followed by countless speeches from meeting participants? And oh yeah, the fact that circumstances have dramatically changed since? Much less, the odds that amidst an historic, global money printing spree, every single FOMC meeting – and FOMC minutes release – is now accompanied by PM waterfall declines? Simple math determines that such “sixth sigma” trading patterns should never happen much less, every time!
Speaking of surging energy prices, I’m not sure how much more vehement we can be of the plight Japan faces – as one of the world’s most import dependent nations, amidst the most maniacal currency debasement scheme a major economy has ever undertaken. As discussed in the “Japanese Noose is Tightening” – and countless, related artcles – the inflationary impact caused by “Abenomics,” combined with the economy-destroying impact of doubling the national sales tax, will likely be catastrophic. Last month, we reported how, amazingly, Japan didn’t even experience a mild pre-tax increase in consumer spending. In fact, the opposite occurred except in the market for gold, where retail buying has achieved record levels. And now, one week into the tax increase, consumer spending has collapsed in epic proportions.
And for those that still believe the propaganda that “deflation” is rampant – despite the Japanese core CPI – and gasoline prices – hitting five-year highs last month, before the 3% tax increase – here’s not one, but two emails received from Japanese readers yesterday.
Just thought I should keep you in the loop regarding Japan and the situation here. First off, prices. 95% of things went up, big shock. One interesting thing is that the milk I bought was 335 yen just before the tax increase; and the new price, 355. I consider myself pretty good at basic math, and I can tell you that’s not 3%. But the biggest surprise was a dog park that my friend visits. Before April, the prices were 10,000 for one dog, and 5,000 for the second, for a six-month pass. Now it’s been changed to 18,000 for the first, and 12,000 for the second; thus 80%-100% increases. Yikes. To make matters worse, I definitely feel a slight change in people’s spending. Sure, we have to buy the essentials, but people are being more careful about just what they buy, and how much they buy it for.
I live in Tokyo, where as you know, our sales tax just went up – and we can see and feel it already. We went to Costco today to buy a few things, and were pretty surprised to see how they are taking advantage of this hike. A bag of lemons used to be $6/bag, but was $8/bag today (definitely more than the 3% increase). Blueberries used to be $11/package, but today were $14 for a smaller package; and a package of tomatoes used to be $6/package, but today sold for $9/package.
And then there’s the Ukraine, where even the MSM “admitted” that when the crisis broke out two months ago, it caused surging PM prices. The fact that such increases were blatantly capped is immaterial, of course, in the eyes of those who won’t see. However, they gleefully jumped on the anti-PM bandwagon when prices subsequently, “myseriously” declined asking no questions whatsoever, such as why this historically anti-American Putin speech coincided with a violent Precious Metals attack, whilst stock prices “counterintuitively” surged. Oh, that’s right. It occurred on the same day as the March FOMC meeting in its own rite, an even bigger “key attack event” – during which, PM prices have been attacked essentially every time over the past two years (amidst historic Fed money printing).
Clearly, the word “de-escalate” has been deemed the “PM suppression buzzword” in the geo-political realm just as the equally ambiguous “recovery” in the economic world, “deflation” in the monetary world, and “tapering” in Fed policy realm. In other words, when PM-bullish Ukrainian news emerges – like yesterday’s hostage crisis, and Russian statements regarding the imminent death of the petrodollar, yielded surging oil prices, no less – little, if any MSM attention is given to gold and silver, and coincident gains capped. Conversely, in the absence of such events, the MSM loudly trumpets “de-escalation” to justify attendent PM declines which, as always, are decidedly NOT capped. As for the PPT-supported stock market, nothing is allowed to be considered bad news – especially on a Tuesday.
I’ve been writing on and off since 5:00 AM, en route home, where I’ll immediately tape my next GAIAM television segment. And thus, I just have enough time to cover this morning’s U.S. “news” starting with a report by the NFIB, or National Foundation of Independent Businesses, highlighting an eleven-month low in small business hiring plans followed by yet another plunge in U.S. mortgage purchase applications and refinancing, to new 20-year lows. Throw in the fact that 98% of incremental consumer credit in the past 12 months is related to non-productive student and auto loans; and a new study concluding that only two nations – Hungary and Estonia – have more citizens that can’t afford food than the U.S. – and you can see why it’s not “conspiracy theory” to assume something “just ain’t right” in the Precious Metal “markets.” Remember, physical gold and silver demand achieved all-time record levels last year; and this year, demand is well ahead of last year’s pace.
Well, that’s enough for now – as I’m landing soon. Hopefully it’s reasonably cohesive and if not, I promise it will be more so tomorrow, when I return to my normal writing routine. In the meantime, please make sure the primary message is not lost; that is, that the Miles Franklin Blog, though operating in the “shadow world,” relies entirely on FACT in drawing conclusions. And in this case, the fact is that it’s decidedly not “conspiracy theory” to believe financial markets are rigged, economic data cooked, and “TPTB” intent on doing everything imaginable – legal and illegal – to preserve the status quo.
When they inevitably lose control of Precious Metals prices – perhaps, imminently – the world as we have known it will be permanently gone as the economy-destroying, “1%”-enriching global fiat currency regime will be no longer. When this occurs, if you haven’t already secured your stash of real money, it will already be too late.