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It’s extremely rare to be born into a period of major historical significance; and rarer still, to escape it without one’s life turned upside down.  This is exactly the scenario confronting us all; and already, the tragic ramifications of a four-decade mad experiment in global money printing are spreading like the Ebola virus.  The inevitable catastrophic end of the “dollar standard era” will entail massive global shifts in purchasing power, military might and civil liberties; and sadly, those nations whose living standards have been artificially propped up the most will experience the most traumatic political, economic and social turbulence.

I’m speaking, of course, of “Western powers” like the U.S., Europe and Japan.  That said, before the “new currency order” is inevitably reborn – backed by the “once and future kings,” gold and silver – all nations will undergo tremendous upheaval as debts are defaulted, governments “defend” themselves, and civilians struggle for financial – and in some cases actual – survival.

Financially, a “new 1%” will be created consisting of those prescient enough to see what was coming; although frankly, we find it hard to believe the average person doesn’t get it by now.  Just as the London Gold Pool’s collapse in 1968 ushered in a 46-year era of unprecedented currency devaluation and manipulation – per today’s title, the “ugliest era” – the upcoming, perhaps imminent collapse of the “New York Gold Pool” will catalyze the rebirth of real money; and with it, universal understanding that only one asset class can afford protection against unrelenting government attempts to control society via the printing press.

Fourteen years after the global economy “peaked” – via the (also artificially created) internet bubble – it’s hard to believe the sheer evil that’s been unleashed.  Even the story of Pandora’s Box doesn’t do justice to the damage a handful of “elite” bankers and politicians have wrought – catalyzed by America’s decision to abandon the gold standard in 1971, and repeal the Glass-Steagall Act in 1999.  Thenceforth, the exponential growth of “financial engineering” – from derivatives to high frequency trading algorithms, “off balance sheet” entities,” “dark pools,” “shadow banking.” And plain old market manipulation has had a catastrophic impact on the global political, economic and social order.

Central bank exported inflation is rampant; debt of all kinds have passed the “unpayable” stage, and are now increasing parabolic ally; and global economic activity has slowed to its weakest pace since the Great Depression with essentially zero hope of a material rebound.  That is, until said debt is expunged, the cancerous fiat currency system replaced and a new gold-backed system created in its stead.  In other words, a long terrifying retracement that will affect all our lives – in most cases negatively, but for a lucky few, positively.  And irrespective, the only way one will have a chance to become the “new 1%” will be with physical gold and silver; as when the miniscule available supply is gone – and government’s commandeer all future supply – it will become priceless.

This weekend, this inevitable end game became vastly clearer.  Not due to a singular event, but by simply cohering the broad mosaic unfolding in front of our eyes.  Frankly, the item that strikes me most – of countless dozens – is last week’s realization that Central banks have covertly purchased $29 trillion of stocks; of which, presumably, the great majority occurred since the 2008 financial crisis.  In other words, not only have Central banks overtly and covertly, purchased half the world’s bonds, but half the stocks as well.  Not to mention, in “advanced financial societies” like the U.S., where the government not only purchased half the mortgage-backed bonds, but nationalized the nation’s largest mortgage originators (Fannie Mae and Freddie Mac) giving them ownership of half the nation’s real estate.

Incredibly, the mainstream media has been so dumbed down, they didn’t even report this historic news – just like their pretend ignorance of November’s equally historic PBOC announcement that it is “no longer in China’s favor to accumulate foreign-exchange reserves”; or the Fed’s abject failure to return Germany’s gold or countless other historic events.  I mean think about it.  Governments have always been the world’s worst assets custodians; and here in America – i.e., the world’s most “exceptional” society – the government has taken over the auto (GM), mortgage finance (FNM, FRE), insurance (AIG), banking (C) and countless other industries.  The crown jewel of them all, healthcare, is about to cause incalculable damage to the nation’s economic and social fabric; and now that it owns anywhere from a third to a half of all stocks, the government will soon be participating – either directly or indirectly – in the means of production itself.  That is what’s still left of it?

In the process, history’s largest bubble has been blown in an incredibly short period of time.  Since the global financial system irreversibly broke in 2008, Central banks have exponentially increased their balance sheets, yielding global currency collapses, social unrest, historic wealth inequality, and, of course, parabolic debt growth which given the Ponzi scheme nature of fiat currency regimes must continue skyward until their inevitable implosion.  Ironically, in the course of creating history’s worst credit fundamentals, interest rates have plummeted to all-time lows in the “civilized” world in both nominal and real terms.  This absurd, unsustainable anomaly has partly occurred due to the aforementioned Central bank monetization; but equally so as global capital pools “bet” on the guaranteed result of “QE to Infinity.”  Already, the Japanese bond market – i.e., the world’s second largest – has proven this truism, as rates have been pushed to zero with the Bank of Japan having acquired every bond in sight for the past two decades.  Trading volume has essentially died as no one dares buy at such historically overvalued levels, nor sells given the promise of unending “Abenomics.”

Here in the States, rates continue to plunge as well, as no matter how many fraudulent “diffusion indexes” the government publishes to purport “recovery,” the entire world is starting to realize it’s a ruse.  Heck, per the damning chart below not only is the U.S. economy decidedly not recovering, but its 2014 macroeconomic data ranks as the world’s worst – as validated by corporate CEO sentiment, stuck at the exact same level as when “QE3” commenced in December 2012, and “tapering” supposedly commenced in December 2013.  That’s why this Thursday’s NFP report will be so interesting; as if the BLS is too careless in its data manipulation, it could destroy any remaining “credibility” in still has; just as the Fed is in the process of doing, as described in last week’s “Yellen’s Last Stand.”  In other words, with just 140,000 or so phantom “birth/death” jobs to work with, the BLS must work extra hard to meet “expectations” of 210,000 new jobs – which is easier said than done when real jobs don’t exist – “waiters and bartenders,” temps, part-time clerks or otherwise.  To wit, the aforementioned “ugliest era” has been characterized by flat out, Goebbels-esque economic lies.  However, at some point, just as in Nazi Germany, such propaganda will stop working entirely.  Given the all-time low ratings of mainstream media networks – particularly in the financial sector – that time is clearly nigh; and thus, the only remaining question is when the credibility of TPTB is fully, permanently destroyed.

Zero Hedge

Zero Hedge

The great John Williams – of Shadowstats.com – actually forecasts a negative GDP print for the second quarter of 2014; which, if it actually occurs, makes it very likely that Jim Sinclair’s expectation of $2,000-$3,500 gold by year-end will actually occur.

 Looming Second-Quarter Economic Contraction Likely to Formalize “Renewed” Recession and Hit Markets Hard

Shadowstats.com, June 25, 2014

For that matter, global economic trends have never been worse with the Baltic Dry Index on the verge of touching the all-time low from late 2008.  In Japan, it was reported this weekend that May household spending collapsed by an incredible 8%, whilst its CPI hit a 37-year high.  In China, “corporate” debt surpassed the $14 trillion level; while in Europe, private sector loan creation plunged to an all-time low, as France reported all-time high unemployment after rising for the 36th straight month.  Meanwhile, Spain became the first “NIRP casualty,” as its government proposed a universal “deposit levy” in response to last month’s suicidal ECB decision to institute negative deposit rates.  And don’t forget Italy, which amazingly, saw its sovereign debt load surpass that of Germany despite having an economy barely half Germany’s size.  Not to mention, the countless “black swans” swimming everywhere from Iraq to Syria and the Ukraine; as well as the first visible signs of bank distress since 2011 – from Deutsche Bank to Barclays to Paribas.

As for TPTB themselves, what could be more unnerving than this weekend’s comments from the Bank of International Settlements – otherwise known as the “Central Bank’s Central bank,” as it is run by the world’s most powerful financial entities?

It is hard to avoid the sense of a puzzling disconnect between the markets’ buoyancy and underlying economic developments globally.  Regardless of the euphoria in financial markets, investment remains weak.  Instead of adding to productive capacity, large firms prefer to buy back shares or engage in mergers and acquisitions.  As history reminds us, there is little appetite for taking the long-term view. Few are ready to curb financial booms that make everyone feel illusively richer.  Or to hold back on quick fixes for output slowdowns, even if such measures threaten to add fuel to unsustainable financial booms. Or to address balance sheet problems head-on during a bust when seemingly easier policies are on offer. The temptation to go for shortcuts is simply too strong, even if these shortcuts lead nowhere in the end.

WSWS.org, June 30, 2014

Trust us, if they are fearful, you should be too!  And nowhere more so, than of the dying fiat currency regime the BIS actively “manages” with the U.S. “Exchange Stabilization Fund” – per the ESF’s 1970 mandate (hmm, one year before the gold standard was abandoned) to allow the Secretary of the Treasury with the approval of the President to “use money to deal in gold, foreign exchange, and other instruments of credit and securities.”  In fact, the BIS has been so brazen in its PM suppression it actually circulated the infamous “fake gold sale headline” – since retracted, but never refuted – to catalyze December 2011’s “Operation PM Annihilation II,” just minutes after a surprise ECB rate cut.

  • MARKET SOURCES REPORT BIS, BOE & FEDERAL RESERVE WERE SELLING GOLDAFTER IT POPPED TO SESSION HIGH AT GMT 1335 -MNI NEWS via BLOOMBERG

The BIS clearly knows the writing is on the wall; and given last month’s historic comment from Xu Luode, Chairman of the Shanghai Gold Exchange, it won’t be long until the entire world knows as well – of not only the end game for global fiat currency, but the new “leadership” of the world’s most valuable asset class.  And that goes for the few people that actually own physical gold, as opposed to the countless tens of billions that own a useless “paper promise.”

Shanghai Gold will change the current gold market “consumption in the East, but priced in the West” situation.  When China will have a right to speak in the international gold market, pricing will get revealed.

In Gold We Trust, May 27, 2014

Since mid-2011’s “point of no return” – when Central banks realized they must manipulate all markets on a 24/7 basis; but particularly last April, when a “closed door meeting” between Obama and the top TBTF CEOs yielded not only the historic “alternative currencies destruction” raids, but the relentless “tapering” propaganda scheme, the level of PAPER PM suppression has reached epic unsustainable levels.  Just last week alone, we just learned that COMEX “commercials” naked shorted an astonishing $9 billion of gold and $3 billion of silver (representing 8% and 13%, respectively, of annual global production) to quell the metals’ post-FOMC rallies – particularly given that last Wednesday was a COMEX options expiration day.  Harvey Organ, easily the most knowledgeable COMEX data analyst of our time, has in recent weeks claimed the data is no longer worth even viewing as it has been so corrupted by fraud.  And sadly, it doesn’t take an “expert” to determine this; as all one needs to view is daily “trading action” – such as today’s 250th “2:15 AM” EST attack in the past 282 trading days (i.e. since April 2013), atop Thursday’s 248th and Friday’s 249th.  As I write, gold is right back to the sub-$1,320/oz. “line in the sand” level the Cartel has been “defending” for the past weeks; which calls into question when its own “Jimmy Shaker Day” will arrive.

24hr Gold 3 Charts

The world’s “big money” continues to flow from West to East – that is, whatever physical gold is still available for sale.  Month after month, year after year, thousands of tonnes are exported to China – either directly, via Hong Kong and Shanghai or indirectly via Swiss refineries; and won’t stop until supply is completely exhausted; which frankly, could occur any day given current fundamentals and according to Sinclair, by year-end.

SRS Rocco Report

SRS Rocco Report

Here at Miles Franklin, we are utterly amazed at how Western investors have “given up” on the insurance policies that precious metals have always served as, whilst unprecedented amounts are gobbled up by Easterners at prices well below the marginal cost of production.

It’s just a matter of time before countless trillions of dollars, Euros, Pounds and Yen – amongst other fiat trash – are fearfully redeployed into the tiny amount of actual real money in existence.  And when it inevitably does, if you haven’t already purchased your own, it will likely be permanently too late.