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.