Over a 26-year financial market career, I’ve watch a lot of “normals” come and go. Sort of like the Billy Joel song “we didn’t start the fire” – in which he covers several decades of American history in rapid fire fashion. Sometimes beliefs and trends end abruptly; and sometimes, they fade away over long periods of time. However, the only certainty – other than death and taxes – is that eventually, what we “come to believe” regarding current economic and market beliefs and trends will replaced by a “new normal.”
Of course, the most sinister “normalcy change” has been the at times slow and creeping, at times abrupt and shocking, shift from freely-traded markets to government orchestrated manipulations. Frankly, there are no words to describe the sadness, frustration, and anger I feel each day, in realizing what I worked so hard to learn – not to mention, to earn a living with and feed my family – has been rendered (for now) useless by a handful of sociopaths armed with the modern “weapons of mass financial destruction” known as derivatives and high frequency trading algorithms. Not to mention, the collusive partnership between government, “TBTF” banks, and the various regulatory agencies mandated to protect citizens’ rights.
All those hours at the SUNY Albany library reading about finance and economics; all those years tirelessly studying for the CFA exam; all those 80-hour weeks learning how to trade and analyze stocks during my “first life” on Wall Street. And in my second, as an investor relations officer in the junior mining industry – all those trips to mines, mining conferences, and mine financiers for naught; as the Cartel simply does this when it doesn’t get its way. At the right, the 102nd “Sunday Night Sentiment” capping of the past 104 Sunday nights. In the middle (in red), yesterday’s “Cartel Herald” algorithm at the 12:00 PM “cap of last resort.” At the left, the 456th and 457th “2:15 AM” EST raids of the past 521 trading days; and in green, today’s blatant raid just after the COMEX open.
Conversely, since 2011’s “point of no return,” the “PPT” has refused to allow the “Dow Jones Propaganda Average” to materially decline; as depicted by yesterday’s prototypical “dead ringer” algorithm at the same 10:00 AM EST time stamp as always – “coincidentally,” engaged with the Dow down exactly 1.0% – or, as I long ago deemed it, the PPT’s “ultimate limit down.” Not to mention, today’s abrupt about face at exactly the 7:00 AM EST open of the New York “pre-market” session – followed by the vertical “lift-off” ten minutes after the NYSE open; in not only a desperate attempt to reverse ugly momentum trends amidst increasingly ugly news, but to “prime” the market for tomorrow’s FOMC meeting – as Whirlybird Janet cannot properly lie about “confidence” in the “recovery” if stock markets are crashing, and gold surging. Which, of course, would be a major violation of the time immemorial “Cartel Rule #1”; i.e., “thou shalt not allow PMs to surge whilst the Dow plunges.”
And the news that “prompted” such irrational moves? To start, further, indisputable evidence that the Grexit we “guaranteed” not just two months ago, but two years ago, is about to arrive. This morning alone, at 6:00 AM EST – note the teensy, tiny downward blip in Dow futures – Greece’s violently anti-Troika Prime Minister, Alexis Tsipras, called the IMF (i.e., the entity Greece seeks to be “bailed out” by) evil; and the “Troika” – of the IMF, ECB, and European Commission – intent to “humiliate” Greece. Conversely, said Troika is preparing for an “emergency meeting” on Sunday – in which it plans to enact capital controls on Greek banks if no “deal” is made beforehand. To that end, Greek stocks and bonds (not to mention, all PIIGS bonds) are in freefall; as are most of the world’s commodities. But don’t worry, the top European Union court declared Draghi’s insane QE scheme “constitutional”; so of course, the German DAX followed the U.S. PPT’s lead by reversing its 1.5% decline into positive territory!
And don’t forget the horrific U.S. housing starts number – i.e., the last economic data point before tomorrow’s FOMC policy statement; depicting an 11% plunge in April, well below expectations, and validating yesterday’s horrific Empire State Manufacturing and Industrial Production numbers. Not to mention, invalidating yesterday’s comical surge in home builder “sentiment” – i.e., one of the most blatantly biased, and historically wrong, of all “economic data.” Oh, and did I forget this morning’s announcement that the Gap – one of America’s most iconic retailers – is closing 25% of its stores? Gee, I seem to remember writing of my December “retail Armageddon” prediction just yesterday. But again, don’t worry, as the BLS tells us “job growth” in the retail sector is explosive!
Back to “home builder sentiment” – LOL, I was about to espouse the old saw about worthlessness, as in “that (sentiment) and $0.50 will buy you a cup of coffee” – which was what coffee cost when I worked in delicatessens in the 1980s. Today, people pay as much as $6.00 for a cup of coffee; and this, despite real household income lower than in the 1980s. In other words, the inflation the Fed claims to not exist could not be more rampant; and as for the “financing” of such purchases, you needn’t look further than here. Hmmm, I wonder if it’s a coincidence that debt started surging circa 1971.
Manipulative misery aside, what I wrote this weekend; of the reality of the global economic carnage barreling at us at breakneck speed, could not be more obvious. Or imminent, as the aforementioned, grotesque economic and financial “deformations” come “down to the wire.” Of historic, unprecedented financial market valuations, amidst the weakest economic environment – and outlook – in generations. Of the “big money” – i.e. China – selling U.S. Treasuries at a breakneck pace. Of massive withdrawals from known gold depositories – from the Shanghai gold exchange; to the GLD ETF; the COMEX’ registered gold inventory; and the New York Fed itself – amidst record naked shorting from a desperate gold and silver cartel, realizing the proverbial “walls” are closing in. To wit, global debt is exploding; currencies collapsing; and money printing going “off the charts” – particularly compared to the world’s scant, production-peaked gold. Which, by the way, has been decidedly in a bull market in nearly all global currencies.
In other words, today’s “new normal” has never been more dangerously detached from reality – to the point that market “fear gauges” have moved to “extreme” levels with most major (PPT-supported) stock indices no more than 3% from their all-time highs! Yes, this is how warped said manipulations have become; to the point that any decline, of any magnitude, inspires fears of the next 2008; or 2000, 1987, or 1929. As it rightfully should, given said valuations – for stocks and bonds – are frothier than in any of those cases. And this, amidst an historically weak, over-indebted economy; historically volatile currencies; plunging commodity prices; and care of your friendly neighborhood Central bank, multi-millennia lows in interest rates, with nowhere to go but up. In other words, today’s “normal” is represented by unprecedented bubbles in essentially all asset classes, and an equally deleterious “anti-bubble” in the one asset class – Precious Metals – that should rightfully be soaring.
Of course, when the reality of historically tight physical markets inevitably overcomes the unprecedented naked shorting, the “New York Gold Pool” – i.e., the gold Cartel – will go down as violently as the London Gold Pool in 1968, and all prior attempts to suppress real money. As will the real valuations of stocks, bonds, high end real estate, rare art, Shake Shack, and all the world’s Central bank-fostered bubbles. And last but not least, Central banks’ ability to effectively “respond” to future crises – when what’s left of their dying credibility is finally extinguished. Perhaps, when Whirlybird Janet inevitably unleashes the “Yellen Reversal” – in admitting Fed policy has been a failure, by re-instituting a new, unprecedented QE round.
And thus, for those fearing today’s “new normal” will last forever…have faith, as it mathematically cannot. To that end, more likely than not, it will end far sooner than most can imagine. Sadly, I expect the next “new normal” – higher Precious Metal prices notwithstanding – to be a far scarier one. Which is why NOW is the time to protect yourself from what’s coming; as once “it” arrives, it will be too late.