Things are starting to get very interesting, as the inevitability of TPTB losing control – a la 2008, or worse – appears more imminent than ever. On a daily basis, there are simply too many fires burning – economic, political and social – in too many places, for the “game” to last much longer; i.e., controlling mass perceptions via money printing, propaganda spreading and market manipulation. Regarding the latter, we have long discussed how gold and silver price suppression has been the most important enabler of such “can kicking”; and now that such manipulation is going mainstream, the odds of a London Gold Pool-like implosion of history’s most oppressive suppression scheme are increasing exponentially.
Heck, manipulation of the London Gold Fix was the top story on historical mainstream lackey Yahoo! Finance last week; and today, the other “leg” of TPTB’s “perception stool” is being kicked out as well – as its economic “recovery” propaganda is also being questioned, if not mocked. And trust me, it’s no coincidence that gold is now featured prominently on Yahoo! Finance’s home page, with its new unofficial “spokesperson” being none other than the well-known “shadow-worlder,” Lauren Lyster.
Each day, the list of potentially cataclysmic issues, from run-of-the-mill economic devastation, to cascading currency collapses, to social unrest, revolutions and even potential World Wars – is multiplying. And despite a legacy of failure rivalling history’s greatest economic follies, TPTB continue to fire every last round of their money printing, market manipulation and propaganda arsenal they can get their hands on. Unfortunately, they are now shooting blanks; and not too long from now, the entire world will realize it.
Just last night, news spread that the Ukrainian government is willing to concede the Crimea to Russia – making Sunday’s secession referendum a moot point and for the second time in the past year, enabling Vladimir Putin to get the best of Barrack Obama. America’s shame was compounded by the fact that Putin was nominated for a Nobel Peace Prize for his efforts to dissuade Obama from invading Syria; but more importantly, exposes its vulnerability to the rising “Soviet threat” – which this time, is not only better financed than America, but allied with China, India and just about any nation that matters in the 21st Century. I highly doubt the Ukrainian crisis is over; but if it is, it essentially ended with Russia invading and annexing one of the world’s most important strategic port regions in a bloodless coup, as the U.S.-led NATA stood by and whined. Not good for the outlook of the dying “reserve currency”; which despite widespread, global currency collapses – which are in full swing again this week – the “dollar index” has fallen to a new multi-year low. And here’s a newsflash as I go through the editing process, not only is the U.S. threatening military action against Russia, but attempting to “sanction” it with threats of releasing what’s left of its pitiful strategic oil reserve. Good grief, talk about throwing fuel onto a fire!
Scanning today’s other headlines, it’s easy to see why we are so terrified of what the remainder of 2014 may yield; as frankly, the list of potential “black swans” is getting too large to count. In Venezuela, expanding food riots have dramatically expanded the potential for a catastrophic supply disruption from one of the world’s largest crude oil producers; certainly, a contributing factor to near record high global energy prices, amidst an expanding economic depression. In Turkey – one of the “Fragile Five” nations where a quarter of the world’s population resides – markets are collapsing as the odds of a political and/or economic implosion in one of the world’s most strategically dangerous “hot spots” increases with each passing day.
In South Korea – one of the Far East’s major economic powerhouses – unemployment was reported to have rocketed higher this morning, to a new three year high; while in Australia, consumer confidence plummeted along with its currency, which itself is nearing multi-decade lows. In Japan, Shinzo Abe’s “Ministry of Truth” is priming the pump to dramatically accelerate its suicidal money printing scheme – by this morning, reporting a “deflation storm”; whilst in the real world, Japan is one of the world’s most expensive countries.
In the United States of Fraudulent Recovery, another fresh batch of weak mortgage origination data validates the growing realization that the Fed-generated real estate “echo bubble” is collapsing, preparing the latest wave of Wall Street fostered subprime purchases for implosion; not to mention, years’ worth of vacant properties on bank balance sheets that ultimately must be foreclosed upon, yielding the inevitable realization of real economic value. It’s no surprise that Obama’s approval rating just hit a fresh all-time low this month; and pretty soon, the entire world will realize that farces like the NFP payroll report are so badly diverging with economic reality, they will be ignored entirely. As will the biggest fraud of all – i.e., the COMEX trading pit – where Paper PM prices continue to be blatantly suppressed, and long contracts defaulted upon, amidst record PHYSICAL demand; such as at the U.S. Mint itself, which yesterday, reported yet again that it’s new, weekly “ration” of silver Eagles was sold out in just two days.
However, as discussed in Monday’s “Most Terrifying Article We’ve Ever Read,” all such “horrible headlines” pale in comparison to what’s going on in China where in our view, history’s largest bubble is in the process of unwinding. It’s should be no surprise that last night, the recently “tough talking” PBOC pretty much pled to the world that it intends to dramatically ease monetary policy if needed; and needed it will certainly be, now that China’s $14 trillion “shadow banking” network is on the verge of massive, cascading defaults. If this occurs – and frankly, the operative word should be when, not if – it will make 2008 look like, in the words of Han Solo, “dusting crop.”
Overnight, the Shanghai Stock Exchange continued its plunge into the abyss, as the PBOC allowed the Yuan to slip lower – this time, to the edge of the 6.15–6.20/dollar range informally known as the “European Kick-In,” where it is estimated that each additional 1% Yuan decline yields $2 billion of derivative losses to the Western banks that wrote them, betting over $500 billion that the Yuan would continue to rise.
Equally ominously, commodity markets – with the notable exception of gold and silver – have been in freefall for the past week; but particularly copper, or as it commonly known as in the financial business, “Dr. Copper.” This moniker emanates from a belief that copper prices have such a strong ability to predict economic trends, they should have a PHD in economics. I know it sounds silly; but trust me, over the years you’d have done a lot better following copper prices than the hollow words – and destructive actions – of politicians and bankers.
Just like any market, there are multiple factors involved in determining price – including supply, demand, production disruptions, currency debauchery and, of course, manipulation. I cannot say I know enough about copper fundamentals to give a firm opinion either way. That said, in my three years of working as Investor Relations head for a base metal development company, it became crystal clear that, like other metals (including gold and silver), copper production costs have clearly risen over the years – with all the aforementioned factors contributing to the steady rise in prices over the past decade. Moreover, copper is clearly not manipulated in the same manner as gold and silver – if at all; and thus, significant price trends can, for the most part, be attributed principally to demand trends; and in the copper futures markets, expectations of such.
Consequently, the recent copper price collapse – in my memory, rivalled only by the bottom of the 2008 global meltdown – is as menacing a sign as can be imagined. Yesterday, copper prices slashed through massive, five-year support at the round number of $3.00/lb. like it wasn’t even there; and last night, fell as low as $2.90/lb. before settling, as I write Wednesday morning, around $2.94/lb. To a man – much less, one who has dedicated his life to the study of commodities – such a plunge is as ominous as they come in the financial world.
And again, we cannot emphasize enough that, for the past decade, rising copper demand has been nearly synonymous with the Chinese “construction miracle” – which I witnessed first-hand last summer when I traveled to Hong Kong and Guangzhou. Never before have so many buildings been constructed – in many cases, completely vacant and financed by either “shadow banking” loans or retail speculation; and never again will such a spectacle be enabled. I advise everyone to watch this August 2013 60 Minutes piece on China’s ghost cities – and after you do, decide for yourself what the below chart of Chinese housing prices portends.
In our view, the upcoming Chinese real estate crash – caused entirely by out-of-control money printing and non-existent regulation – will be the most cataclysmic economic event of our lifetimes. You can bet the PBOC – and all other Central banks – will fight it tooth and nail with unprecedented levels of “QE” and other money printing schemes; and whether they are able to “kick the economic can” a bit further matters not – as by then, the entire world will be rushing into the inflation protection of PHYSICAL gold and silver, as at no other point in recorded history.
And speaking of PMs, they are again surging higher – whilst the PPT, Cartel and essentially every “manipulation organization” on the planet attempt to slow them down. Yesterday may have been one of the most blatant interventions on record – with the “Dow Jones Propaganda Average” again rescued by “Dead Ringer” algorithms at 10:00 AM EST whilst PMs were capped at the 12:00 PM EST “cap of last resort” – in silver’s case, yet again at the $21/oz. “line in the sand” that also happens to be its 200 day moving average. By day’s end, the Dow was down just 67 points, whilst gold closed – comically – just below the very key round number of $1,350/oz., and silver, just below $21/oz.
Today, with the entire world watching equities plummet – not to mention copper and crude oil prices, and emerging market currencies – Dow futures were again held to modest pre-market losses by the omnipresent PPT. And when it opened down 100 points – i.e., “PPT ultimate limit down #2” – it again magically surged when, “coincidentally,” the Fed’s 10:00 AM EST open market operations occurred (tapering, my arse!); and as I write at 10:50 AM EST, the Dow is down just 30 points, with European equities down 1%-2%, following Asian losses of closer to 2%-3%. In other words, TPTB are using their last remaining “perception ammunition.”
In the PM markets, they are again being capped, but slowly but surely, the powers of reality are breaking through. Frankly, I was shocked to see gold rise in the ultra-thin “Globex” trading hours last night; perhaps the first time this has happened in years – and I’m not exaggerating! This morning, gold has not only broken through yesterday’s “line in the sand” at $1,350/oz., but the $1,360/oz. level initially defended with the 185th “2:15 AM” raid in the past 209 trading days. In fact, if not for the blatantly obvious “Cartel Herald” cap shown below, we’d have broken above $1,370/oz. by now. And take a guess what time that cap occurred? Yep, exactly at the 10:00 AM EST close of the global PHYSICAL markets that for the past 12 years, I have deemed “key attack time #1.” As for silver, the battle for $21/oz. rages on – which ultimately, will be won by the bulls, en route to its pre-destined “ultimate quadruple-top breakout” above $50/oz.
Each day, we are further amazed as to just how few people even consider that something is very, very wrong – both here in the Decaying States of America and abroad. Many millions are living such torture as we speak; but here in the West, the large majority have been dumbed down so thoroughly, they are more focused on the pending $8 billion IPO of the maker of the “Candy Crush” video game than the potential World War brewing in the Ukraine; let alone, the massive inflation, unemployment and corruption occurring right under their own noses. The only historically guaranteed way to protect oneself from what’s coming is the ownership of PHYSICAL gold and silver; and all you need to do is ask questions, which Miles Franklin has been answering for the past 25 years!