First off, let me just say that as I write Tuesday morning, a full-blown, biblically-comparable miracle has just occurred. It’s just a start, of course; but I nearly fell off the stair-climber at the gym when gold and silver actually crept higher during the New York “pre-market” trading session, amidst a largely news-less, trendless morning. And then, lo and behold, gold surged $8/oz. in a matter of seconds; just as it has done on the downside on perhaps a thousand occasions over the past 15 years.
In fact, the paper gold market has been shut down by similar, sudden movements four times in the past three months; although in those cases, they were all to the downside. Thus, when I learned COMEX gold trading was temporarily shut by a “stop logic” surge this morning, I was truly shocked. Not that it should surprise anyone that the world’s most undervalued assets lurched higher, of course. However, such market “assaults” are as predatory and manipulative as imaginable; and thus, when they happen on the upside, it’s hard to not sense “something’s afoot.”
I mean, think about it. How much longer can reality be held back – regarding the U.S.’s rapidly deteriorating economy, financial position, and political standing? It’s “PPT” takes equity markets higher daily under the guise of a (non-existent) “recovery”; while the MSM calls for “tapering” despite the nation’s obvious addiction to record low interest rates – per this terrifying article of the upcoming “after-shocks” of the 2003-08 real estate bubble. Not to mention, the economy-killing terror that is Obamacare; which each day, we learn more discomfiting information about – as discussed in this, equally terrifying article. And oh yeah, this morning’s validation that the only “growth” America is experiencing is in exploding corporate inventories. In other words, the reality of a collapsing nation has briefly been masked by epic levels of money printing, market manipulation, and propaganda. But for how much longer?
As long-time readers know, I don’t pay much attention to the so-called “dollar-index” – as the dollar’s relationship to other fiat trash is not a true measure of purchasing power, particularly when 58% of the index basket is the dying Euro, and 26% the hyper-inflating Yen and Pound. However, it is difficult to not notice how the dollar index has failed to rise in the past two years, despite the U.S. supposedly being in “better shape” than Europe and Japan. I mean, last summer, the ECB practically screamed its intention to do “whatever it takes” (i.e., print as much as necessary) to save the collapsing Euro experiment; while last Fall, Japan embarked on the most aggressive QE program in the history of “first world” nations. Heck, as regards Europe, things have gotten so bad, rumors of new bailouts (and bail-ins) are again gaining traction – as the horrifying chart below validates. And thus, I ask, how can the dollar be weakening against a basket of major currencies – but particularly, the Euro?
The answer, of course, is that it’s on its way out as the world’s “reserve currency,” after having abused the privilege to unimaginable proportions over the past four decades. It would have happened anyway – as it always has throughout history. However, an unprecedented level of mismanagement, corruption, and irresponsibility since the turn of the century – and particularly, the past five years – has accelerated this inevitability dramatically; potentially, to the level of imminence.
Quantitatively, it doesn’t take a rocket scientist to realize America is hopelessly bankrupt; sadly, at the Federal, State, municipal, corporate, and individual levels. With both the money supply and across-the-board debt levels now rising parabolically, it has become impossible to deny the fiat Ponzi scheme is in its dying days. Hence, the past two years’ maniacal attacks on gold and silver – i.e., the “anti-dollar” investments that expose America for what it has become.
However, it’s the qualitative measures that really tell the story; starting with Obama’s “slapping” by Vladimir Putin when attempting to build a “bomb Syria” consensus. Across-the-board, such “dissing” of America is becoming commonplace, as exemplified by China’s comment last month that it seeks a “de-Americanized” world; and comments last week that it is ending its long-standing policy of building foreign currency reserves.
Given that 60% of China’s $3.7 trillion of reserves are dollar-based, the PBOC is essentially stating its intention to “de-Americanize” its assets. Such a draconian stance is a global game changer; destined to dramatically reduce America’s global standing – and with it, its citizens’ way above average standard of living. Heck, just last week the Yuan passed the Euro as the second most utilized currency in global trade settlement; and trust me, when we look at such “standings” a decade from now, the Yuan will be on the verge of passing the dollar as well – if it hasn’t already. Irrespective, the dollar’s peak passed at the turn of the century, with nowhere to go but down.
Why did I write this article today, you ask? Easy, due to this new poll, released yesterday. In my view, nothing could be more damning to America’s standing than the increasingly negative views of its own citizens. According to the survey, 53% of Americans believe the nation’s standing on the global scene has weakened in the past decade; i.e., the highest-ever reading since the poll was established in 1974. Given that Obama’s approval rating has fallen to its lowest level since he took office – amidst a “so-called recovery,” to boot; whilst Congress’ 10% approval rating is the lowest in American history, it shouldn’t surprise anyone of Americans’ rapidly diminishing view of their nation’s standing.
In fact, American’s cumulative level of political and economic optimism has also breached historic lows – falling from 40% optimism just nine years ago, to an incredible 20% today. What a surprise, such a plunge coincides with multiple wars; massive, Fed-induced inflation; a burst real estate bubble; and historically low Labor Participation – with many of those working desperately seeking wages above the poverty level. And all this, whilst the very Wall Street firms that caused this mess – after lobbying Congress to repeal the Glass-Steagall Act in 1999 – are living high on the hog, off the free subsidies and inside information garnered from their Washington minions.
Meanwhile, the most tried-and-true symbol of American hegemony – its gold reserves – have been covertly drained throughout this period; sent permanently East in a bid to stave off reality with one last, decade-long “can kick.” As discussed yesterday – and hundreds of occasions over the past decade – the evidence of Paper PM suppression and Physical PM drainage is as plentiful as it is stark. And now, on the cusp of the inevitable shortages that will define the end of the modern-day “London Gold Pool,” the pieces of the puzzle are starting to come together. That is, of dying U.S. hegemony, the end of the dollar as world’s “reserve currency,” and the inevitable re-birth of real money to its role as “once and future king” of value preservation. The way I see it, the pace of change is entering a new, accelerated stage; and thus, it’s only a matter of time before the “world as we have known it” permanently vanishes. And when it does, if you have not yet protected yourself with the only assets guaranteed to survive the upcoming monetary “reset,” it will already be too late.
You nailed that like a split hog Andy. Thanks for another great article.
You miss the elephant in the room that all precious metal commentators miss at the moment – the USA military backing of the dollar. See my posts on Hiddensecretsofmoney.com under Episode 1 referencing my term Units of Destruction or UDs as money backing the USD currency.
The USA military hegemony is NOT in retreat and becomes every more dominant every day. The USA has 12 naval battle groups, no other country has one. Its spying network covers the whole world and it has 220 bases overseas far more than all other countries combined! The USA can fight and win a war against the rest of the world! It has Hollywood cultural dominance, The UN in new York, control over the IMF and World Bank, the English language, dominance in space weaponse..in short Global Spectrum Dominance. As long as this continues the technical bankruptcy is meaningless and the Fed balance sheet can be numbered in the quadrillions.
When oh when are financial commentators going to concentrate on the means of destruction rather than the means of production held hostage by the former.
Edmund,
Force is immaterial. China is destroying America without fighting a bullet!
a
The only thing shocking or surprising about a surge higher in the PMs even to the point of being temporarily halted on the exchange is an analysts inability to recognize that the paper price is being completely managed in both directions. The surge up only indicates how desperate the Cartel is to bring fresh new longs into the market so that they can turn around and smash the price down to further extricate themselves from the remaining short positions that they hold. Yes, the Morgue has a long side corner in gold but they also continue to have a short side corner in silver (albeit diminishing but still significant). Price will not be allowed to move higher freely until they are positioned to benefit completely by that move and it certainly wont happen on the Comex as it will have defaulted by that point.
Look for another retest of the lows by the end of the year (if we’re lucky) starting next week with the FOMC. They need to get the metals down along with confidence and sentiment so that they can be net long all PMs prior to the Fed announcing the next massive increase in QE (likely their last) some time early in the new year. PMs will not be aloud to surge higher prior to that or it would become impossible for the Morgue’s (Client – China) to acquire every last bit of metal on the western exchanges prior to the the price discovery mechanism shifty east to the physical exchanges that are being established there now. Not to mention the fact that it’s in their very best interest to have the metals down or even at new lows for the end of the year to further crush sentiment for their maximum benefit. Anyone hoping to see this play out within the confines of the 100% controlled paper price discovery market a.k.a the Comex is delusional! True price discovery will not be realized until they realize a total loss of control and the Comex is shut down!
And for anyone who believes that the Morgue (or rather their client – China) is unwilling to realize a $1.5 billion loss in gold by engineering a decline back down to the June lows or even to $1000 is failing to recognize what they gain in the long run by flipping their concentrated silver short (as was done with gold on the last decline) and of course further increasing their gold long. $1.5 billion is nothing when you’re sitting $3.6 trillion in reserves and your plan is to control all the money in the world!
Keep stacking we’re getting close to the end and don’t get caught up in the hype, they want you to watch every tick as though it were a soap opera so that they can play on your emotions and get you to buy high and sell low – every time! baaaaaaaaa
I wrote in this article that the surge was manipulative – albeit, with the primary trend. As for saying “PMs will not be aloud to surge higher prior to that or it would become impossible for the Morgue’s (Client – China) to acquire every last bit of metal on the western exchanges,” it seems you may be getting a touch of the Stockholm Syndrome. JPM – and its partner the U.S. government – cannot control the market indefinitely; just as the London Gold Pool failed in 1968. When such control ends, it may well be overnight – and much sooner than anyone imagines.
Andy, In the private sector when Ponzi schemes are discovered the schemers are brought to trial and sent to prison.
When all visible schemers are discovered which includes every elected official from dog catcher to the President of the U. S. plus all decision makers are discovered , the invisible power structure above them gives them a pass.
It seems like the world is having a terrifying dream like the one King Nebuchadnezzar had in accent times.
“Force is immaterial”…It’s very material when a bullet hits you or a nuclear bomb goes off whereas trillions or quadrillions (who cares) on the Fed balance sheet is very immaterial…digital currency not worth the paper it’s not written on (as Gerald Celente says). Which is why the PTB don’t care about that. “China destroying America”…they can’t even enforce a no-fly zone in their own backyard! They are under a potential blockade even now with the USA able to tighten the noose at will if it chooses. Look at the ring of bases around them.
The only way the BRICS can end the dollar’s reign as reserve currency is to attack America – and win. The dollar is the only reason that America can afford a military spend greater than the rest of the world combined so attacking the dollar is tantamount to attacking the USA military and vice versa.
If the technical bankruptcy mattered it would have mattered already and it hasn’t because the USA military dominance and Global Spectrum Dominance increases every day. The USA is not Zimbabwe, Argentina, Madoff or Enron the normal rules of accountancy/ponzi schemes do not apply. Yes the dollar is technically bankrupt and is a ponzi scheme – but it has been for 40 years. So what?!
If you are so confident, you are welcome to hold dollars instead of gold and silver. Clearly, I disagree 100%.
On my logic it is only a matter of time before being a goldbug (as an attack on the dollar and thereby the USA military) will ensure you being considered a Domestic Extremist / Enemy Within (or Without if an ‘alien’ as Americans call foreign human beings) / Terrorist. Understand what you are dealing with…this is no game! It’s not about silly numbers like the money supply, Fed balance sheet, credit expansion or a quadrillion of derivatives – it’s about force of arms and always has been. Ask the native Americans if you don’t believe me.
Yes, as it is doing a million other things the government doesn’t approve of. However, millions throughout history have taken that risk; and I will too. Anytime someone aks a “what if the government…” question to me, my answer is the same…
/priceless-precious-metals-vs-worthless-dollars
a
Actually I am 100% in silver in the spiritual faith that one day it will be the world’s money but that is because I am morally repelled from holding Units of Destruction. For now (and since 1971)UDs are the world’s money backing the American dollar reserve currency and by extension all the fiat currencies.
The proof of this can be seen in my posts under the Forum Topic, Episode 1 of Mike Maloney’s Hiddensecretsofmoney.com site where I explain how a UD is the world’s money (not currency). As a UD is a unit of destruction in the actual act of destruction it can only redeemed by the death of the redeemer – that is the point. The intrinsic value is achieved by the ability to expropriate any resource by the threat of its deployment/redemption.