Ah, another FOMC meeting day; i.e., “key attack event #1.” Actually, in the past two-plus years of “manipulation infamy,” essentially anything related to Federal Reserve appearances – from Congressional “Humphrey-Hawkins” testimony, to the Jackson Hole Symposium, to FOMC meetings themselves, and even the ex-post “minutes” thereof, have been occasions for the Cartel to raid Precious Metal prices. Moreover, as we noted yesterday, the entirety of S&P gains over the past decade-plus can be attributed to the 24 hours prior to such meetings – as the PPT “primes the market” to anticipate “bullish” news, no matter what it might be; and, of course, to give the Fed maximum flexibility to alter policy, if need be, by providing a favorable market environment.
To that end, this week alone has been particularly galling – as clearly, TPTB were terrified of Precious Metals’ rising momentum; and with it, their imminent “golden” technical crosses – care of crashing global economies, the expanding Ukrainian crisis, and the fact that physical demand is surging whilst paper prices continue to trade below gold and silvers’ respective costs of production. Worse yet, global equity markets have been in significant turmoil, yielding increased attention to the Precious Metals’ historical “safe haven” attribute – to the point that it was achieving headline status in mainstream publications. Thus, starting with Friday’s “cap of last resort” attack at 12:00 PM EST, and subsequently, the 29th “Sunday night sentiment” in the past 30 weekends, the Cartel have attacked PMs with impunity at each and every “key attack time” for the past hundred hours.
Simultaneously, despite obvious escalation of the Ukrainian crisis (contrary to pitifully transparent propaganda stating otherwise); a collapsing Chinese credit and construction bubble (see the terrifying chart below), multi-year lows in the Yuan/dollar exchange rate, weak U.S. housing and mortgage application data, copper prices hitting five-year lows, whilst oil prices surged; and heck, this morning’s news that Benjamin Netanyahu has ordered the Israeli military to prepare to attack Iranian nuclear facilities; Western equities miraculously shot up Monday and Tuesday – ironically, right ahead of the expected “tapering” that has been anathema to equities for the past year.
Amidst the worst global economic conditions since 2008, the Fed and PPT have created a U.S. equity bubble so enormous, the IPO market is starting to resemble that of the late 1990s internet sector – whilst margin debt has surged to an all-time high, amidst the most bearish “insider selling” ratio of ALL-TIME. Ominously, tech stocks are again leading the charge, whilst bellwether names like Intel, IBM, Cisco, and – last night, Oracle – continue to report abysmal market outlooks. Broadly speaking, the fourth quarter was one of the worst earnings periods in recent memory; as epitomized by this morning’s poor report from Federal Express, and the below charts of corporate optimism and retail sales trends.
In Friday’s “Deflation, and Why You Must Own Precious Metals Now,” we spoke of the transparency – and fatal flaws – of the so-called “deflation” arguments the Fed, ECB and BOJ purport to support never-ending money printing. And subsequently, Monday’s “Yellen’s Dilemma” discussed the dangers of attempting to even slow the pace of money printing – let alone, stop, or god forbid, reverse it. Actually, “danger” is a pretty strong – as in reality, it is utterly impossible to top printing money in a fiat Ponzi scheme, particularly when one owns $4+ trillion of toxic, worthless assets, which the entire world are currently selling – particularly the second largest holder (after the Fed itself), the Chinese.
Thus, who’s buying Treasuries, you ask? I mean, if the world’s largest holders are selling – not to mention, everyone else; then how on Earth has the benchmark 10-year Treasury yield fallen from the 3.0% “line in the sand” level to this morning’s 2.69% – particularly if the economy is “recovering?” The answer, of course – as discussed in December’s “Proof of the Tapering Mirage” – is the Fed itself, which is quite obviously purchasing Treasuries covertly. Not to mention, its cronies at the ECB – which, likely funded with Fed-printed money, have suddenly ramped up Treasury purchases, despite continually delaying the official commencement of its own desperately-needed QE mechanism; i.e., the OMT, or “Outright Monetary Transaction.”
The sudden appearance of “white knight” Treasury buyers is nothing new – starting roughly a decade ago, when supposed “Caribbean banking centers” emerged from the ether to become among the largest Treasury holders; followed by the UK, which despite its own massive, unpayable debts, suddenly became a huge Treasury buyer a few years back; and now, of all places, Belgium has become the third largest foreign Treasury holder – after China and Japan – in amounts far exceeding its GDP output! Gee, could it be a “coincidence” that the EU is headquartered in Brussels? I mean seriously how foolish does the Fed think the entire world is?
Anyhow, our point is that when it comes to “markets,” there aren’t any remaining; and thus, if you listen to the MSM – or watch the “Dow Jones Propaganda Average” – for guidance, you will be thrown as far off the true economic course as the S.S. Minnow. John Williams’ ShadowStats does a brilliant job deciphering such lies – once and for all, proving “deflation” and “recovery” are but figments of the “evil troika’s” imagination; i.e., Washington, Wall Street and the (decreasingly confident) MSM. However, all you really need to do to comprehend reality is to look around you – in all directions.
– Strongest Recession Signal Since Eve of the Economic Collapse
– Real Retail Sales on Track for 4% Annualized Plunge in First-Quarter 2014
– Housing Starts on Track for 34% Annualized Plunge in First-Quarter 2014
– For Second Month, Unadjusted Monthly 0.4% CPI Inflation Was Squashed to 0.1% by Seasonal Adjustments
– February Annual Inflation: 1.1% (CPI-U), 1.0% (CPI-W), 8.8% (ShadowStats)
– Real Earnings Down 0.2% in February
–Shadowstats.com, March 18, 2014
With a 35-year low in the Labor Participation rate record low job quality and real earnings, record high food stamps, disability, and other entitlement plan enrollments and record low savings; it should be crystal clear that Janet Yellen’s purported “recovery” is a pure lie – as was Ben Bernanke’s for five years running.
Equally ominous – or should I say, ignominious – is the fact that it is drummed into our heads that not only is “deflation” a reality, but the economy’s greatest threat. In fact, essentially all Western Central banks are aggressively playing this flimsy card in trying to prove the printing presses must continue full speed, care of fabricated CPI statistics that only exist – to quote Rodney Dangerfield in Back to School – in Fantasyland. The quarter of the world’s population living in the “Fragile Five” nations of Indonesia, India, Brazil, South Africa, and Turkey will beg to differ – as will denizens of dozens of other “emerging markets” experiencing rampant inflation and social unrest, such as Venezuela, Argentina, Thailand, Kazakhstan, and, oh yeah, the Ukraine. But don’t worry about them, as according to secular Westerns – particularly “exceptional” Americans – the rest of the world doesn’t matter.
As for “deflation,” my local service station is currently selling regular gasoline for $3.64/gallon – not far from the all-time high of roughly $3.90/gallon, despite the ongoing collapse of U.S. gasoline demand. Not to mention, we’re not even in the peak driving season yet! And by the way, Colorado is one of the lowest-cost gasoline States in the Union. Thankfully I don’t live in California, where gasoline prices are well above $4.00/gallon already, and rapidly rising.
And then, of course, there’s the prices of other items we “need versus want” – in many cases, exploding higher amidst the so-called, aforementioned “deflation” threat. Per below, U.S. beef prices are now trading at record levels following a 4% increase in February (not reflected in the below chart); i.e., the largest monthly increase since November 2003.
Or how about milk and chicken prices – up 24% and 6%, respectively, in the past year, to record high levels? But don’t worry, the U.S. government claims annual “inflation” – as calculated by the “core CPI” – is up just 1.6% in the past year (itself, a terrifying amount, given record low real income); as opposed to the 8.8% annual inflation rate calculated by ShadowStats.
Thus, as we head into “Whirlybird Janet’s” first FOMC propaganda dissemination – er, policy statement – keep in mind that the true nature of “markets,” as well as “deflation” and “recovery,” is fabrication, manipulation, and in many cases, outright lies. Fortunately, a global “realization of reality” is rapidly spreading; and when it comes to PHYSICAL gold and silver, such reality is becoming extremely difficult to mask. Record demand, plunging supply, non-existent inventories and suppressed prices are all becoming mainstream topics; and even if they weren’t, the inevitable “tipping point” – i.e., when supply is no longer available to meet demand – has never been closer. Only you can protect your assets from what’s coming – but will you act on your instincts, before it’s too late?