It’s Wednesday evening, and I can’t help pondering what the world will like when TPTB lose control of “last to go” markets like the “Dow Jones Propaganda Average” and paper gold and silver. Care of the “weapons of mass financial destruction” unleashed by Wall Street and London’s “City,” never before has “Economic Mother Nature” been pushed this far. Consequently, when the final “detonation” occurs, her wrath will be historic. Aside from the Cartel’s suppression of Precious Metal prices amidst record global demand, there’s no better way of depicting the madness of money printing and market manipulation than the below charts – of earnings and cash flow multiples at all-time highs, amidst the worst economic environment, and outlook, of our lifetimes. Not to mention, the highest levels of subprime lending since the 2008 peak; and accounting rules enabling banks to further obfuscate their insolvency.
To that end, Yahoo! Finance’s brain-dead “top story” this morning claims “world stocks near all-time highs after Fed (easing) signals”; suggesting that, because Janet Yellen delivered the “most unequivocally dovish FOMC statement in memory” yesterday, it’s clear sailing in the global stock markets – irrespective of how weak economic activity gets; how strained geo-political tensions become; how viciously the “final currency war” escalates; or how overvalued stocks and bonds have become.
In our view, yesterday’s abrupt end to any remaining rate hike expectations, atop last week’s uber-dovish “minutes” from the Fed’s January 28th meeting, presage the inevitable “Yellen Reversal” I predicted five months ago. That is, when Fed “waffling” morphs into all-out, fear-induced money printing – in the form of a gargantuan, overt QE program. And lo and behold, as I predicted, the typical pre-Yellen interest rate goosing failed yet again, and miserably so. I.e, from a peak of 2.17% before said “minutes” publication last Wednesday, the 10-year Treasury yield plunged to 2.11% before Whirlybird Janet’s Congressional testimony commenced yesterday morning, and 1.96% as it ended this afternoon. Per this amazing chart, global interest rates are now at their lowest level in the 5,000 years since interest was invented; and trust me, you ain’t seen nothing yet!
I mean, how terrifying is it to see mortgage and refinancing applications at multi-decade lows despite record low rates? Let alone, home building sentiment that refuses to die despite plunging home sales and new construction – particularly in the all-important single-family residence category. To wit, my neighbors’ house – with a finished basement, no less – just sold for 11% below the level of a similar home four houses down, with no finished basement. Of course, the latter home was sold at the market’s peak in mid-2013, when neighbors were actively discussing home prices, a la 2007’s historic peak. And wouldn’t you know it, take a guess which commodity is now freefalling? Yep, lumber – down 16% since year-end, and 27% from the eight-year high set in – what do you know – mid-2013? It can’t be coincidence that the stock of a company called Lumber Liquidators was “liquidated” to the tune of 26% today, can it?
Speaking of ominous commodity trends, what more can be said of the burgeoning crude oil catastrophe, that hasn’t been already? Yet again, API and EIA inventories exploded to all-time highs; for the third straight week, well above expectations. Not to mention, as global production hit a new all-time high as well, plunging rig counts irrespective. Consequently, for the third straight week, the “oil PPT” I have exhaustively written of saved the day; yet again,defending WTI crude at the $49/bbl “line in the sand” they have obviously drawn, in their quest to manipulate yet another physical market with unbacked paper vehicles. At least Zero Hedge finally got around to noting what I have been saying for weeks, including on yesterday’s Audioblog…
“Will the ‘oil PPT’ be able to repeat the blatant support of oil prices it executed the past two weeks, in both cases preventing oil from falling below $49/bbl after equally massive inventory builds, in both cases to fresh 80-year highs? I guess we’ll see tomorrow morning, when the EIA inventory numbers are published.”
By day’s end, said “oil PPT” had yet again goosed prices back to $51/bbl; after touching a low of, I kid you not, $48.90/bbl after the EIA inventory explosion was reported. However, “have no fear” crude bears; as the difficulty of manipulating Precious Metals down amidst ragingly bullish fundamentals is nothing compared to holding up the vastly larger, massively oversupplied crude oil market.
Let alone, trying to hold up all of Europe, which teeters precariously on the crumbling fulcrum of Greece; currently, by nothing but a fraudulent bailout “deal” that is already is under fire by everyone from Greek citizens, to Germans Central bankers, Fitch Investors Services, and the financial markets themselves. Yes, just “one day later,” Greek markets are badly listing, led by what I once deemed “the world’s most important stock” – and yesterday, the “world’s most insolvent financial institution” – the National Bank of Greece. In other words, the “countdown to Grexit” may well have just four months remaining; not to mention, the entire ill-fated Euro experiment.
And then there’s the Ukraine, where one of the world’s most dangerous geo-political hotspots is on the verge of going nuclear…literally. Last year, we warned the Ukrainian crisis wouldn’t go away any time soon; and today, not only has the baseless “de-escalation” propaganda been put to rest, but the odds of all-out war have never been higher. Clearly, both sides are preparing for “full-scale war“; although “both” may not be the appropriate term, given that countless other nations are likely to be sucked into the Ukrainian vortex.
As I write, Ukrainian natural gas is being withheld from Eastern regions where rebel strongholds are based, amidst the dead of winter; prompting Vladimir Putin to accuse the Ukrainian government of “genocide,” and retaliate by shutting of gas pipelines that would eventually reach European end-users. Better yet, the Ukrainian hyrvnia has now completely collapsed, igniting a hyperinflationary hell that is destroying everything in its path – other than gold, of course.
In other words, wherever one looks, the ominous specter of economic and financial collapse looms; and conversely, the re-monetization of the only real money the world has ever known – i.e., physical gold and silver. To that end, I have been asked to address yet another fear-mongering call by Larry Edelson; who despite having decisively called gold’s bottom last June, now believes gold will bottom “below $1,000/oz, later this year” – before turning higher, and eventually hitting $5,000/oz. In other words, the same newsletter writers’ game I have observed for more than a decade; of following the prevailing winds; enticing readers’ to risk hard-earned capital in short-term trades; whilst “hedging” their commentary enough to take credit for subsequent market movements, be they up or down. To wit, the “short-term bearish, long-term bullish” newsletter writer’s mantra since Precious Metals bottomed at the turn of the century.
Actually, I agree entirely with his views in this video, as pertains to commodity prices in general. To wit, the combination of relentlessly growing, hopelessly unpayable debts and massive, Central bank fostered industrial overcapacity will undoubtedly yield massive deflationary pressures for years to come. That said, I couldn’t disagree more with his views on gold; which frankly, don’t hold a candle to the perverse logic behind his expectation of Dow 31,000.
In today’s world of endless financial propaganda – particularly TPTB’s war on gold – I am continually amazed by calls for gold (and silver) to plunge due to “deflation”; when not only have Precious Metals been historically the best assets to own during deflation, but were so during the 2008 financial crisis. To wit, whilst endless commentary of gold’s (Cartel-induced) crash in the Fall of 2008 is espoused, no one seems to point out that gold was the only asset class to rise for the year – or for that matter, that physical premiums over silver’s fraudulent paper price surged to nearly 100%. Moreover, when stocks hit their final low in March 2009, gold had already recouped nearly all its losses. And then there’s gold’s Depression-era performance, which also put all other asset classes to shame. Care of government decree, gold was fixed at $20.67/oz until 1933, when Roosevelt “revalued” it to $35.00/oz.. And as for gold mining stocks, they were indisputably the best performing asset class, whilst nearly all others collapsed.
Yes, I know this isn’t the 1930s, but I’m just making the point that Precious Metals are just as valuable during times of “deflation” as “inflation”; although, of course, the sad tragedy of today’s fiat dominated world is that crashing currencies are causing just as much inflation of things we want as deflation of things we need. To that end, the reasons to own Precious Metals are dramatically more powerful today; as back then, the gold standard ensured “dollars” were backed by real assets – whereas today, all currencies are backed by NOTHING, and being hyper-inflated in historic fashion.
To that end, the average currency is down an incredible 42% against the world’s “reserve currency” since the U.S. government lost its triple-A credit rating in mid-2011; and in response, commenced history’s largest inflation exportation scheme – euphemistically named “QE.” The resulting global currency wars typify the terminal phase of a Ponzi scheme; and when it inevitably implodes, if you haven’t already protected your net worth with real money, it will already be too late. But hey, if you want to believe Larry Edelson that “deflation” will take gold and silver below $1,000/oz. and $12.50/oz, respectively – to levels insuring the complete destruction of the Precious Metals mining industry – go right ahead.
Bill,
Excellent article and thank you.
If folks are betting the farm on what Yellen says, then I feel sorry for them !!!
Reminds me of back in the 1980’s when I worked in public accounting and one of the partners had a big oil company client in Oklahoma. The partner had heard that the oil company owner had just bought a certain stock. The oil company owner was very wealthy and was known to pick stocks that made you rich, therefore, many of the people in the public accounting firm rushed out to buy this same stock to get wealthy also.
Long story short is that the stock went belly up and every one lost their money.
Wonder what folks will think and do when Janet Yellen causes them to lose their currency? Oh well, putting your faith in man instead of God always sends you down the wrong road.
The bible said what gold and silver was, but never mentioned the stock market. Man loves to lead other men to ruin.
No gold or silver? Would be a great time to contact Miles Franklin (and no I’m not making a cent saying this).
yes, thanks Farrell.
Bill,
As to giving Greece a 4 month extension, I have a grand idea!
In bakruptcy court the judge can give all bankruptcy applications a 4 month extension. Then all problems will be solved !!!
Who would have ever thought that a simple 4 month extension could make you solvent again?
Wow, by mid June Greece will have Happy Days Again !!!
This sounds like Andy’s writing, not Bill’s. Not that I don’t enjoy both authors, but both have different writing styles.
Bill,
Artificially propping up crude oil prices is a “catch 22” for the west. The collapse of the Ruble has greatly benefited Russia on the Rubles received for oil. Even though oil prices have collapsed, oil in Rubles has fared much better. I have been trying to find a chart in the price of oil in Rubles over the past 6 months, but can’t find one….any help?
-Rodger-
p.s. another great article as always.
They may be TRYING to artificially prop oil, but if this is the best they can do it ain’t helping anyone. And I’m not sure how you can say Russia has benefitted from vastly lower revenues and a collapsed currency. Trust me, this is not good for Russia – or us.
Andy,
What do you think of this assessment that maybe we’re too negative:
http://www.mauldineconomics.com/the-10th-man/i-heart-capitalism
Best regards,
Ken
Sorry, I don’t have time to read all I’m sent. If you have a specific question, though, I’m happy to answer it.
That said, putting it lightly, I could not be less of a fan of Mauldin.
Way back when, he insisted the U.S. would “muddle through” its problems without crisis, which I vehemently disagreed with. It turns out, we had a little thing called the 2008 crisis; and now, the U.S. financial and economic situation is vastly worse, on the verge of a far worse crisis.
Hello Andy,
My reason for owing Gold and Silver to the over 90% of my savings is slightly different than surviving Armageddon. I hold PM as my only protest against be part of the corrupt government that has trashed the Constitution to enhance their power. They a faithless & cruel & evil people
My question to you would be how many Jewish people and many others escaped the horror of the third Reich?
Homeland Security & their trained mercenaries and the Fema camps have a place for all the apathetic people to be “processed”.
On a positive note, I have none!
Bill
Whatever reason you own them is a good reason!
Andy,
Sorry for calling you Bill on this excellent article.
Both of you put out such great articles I sometimes get you mixed up.
Old age creeping in on me.
All good!
a
Hello Andy,
I am fighting the Law & the Law WON!
Chris Powell: “These investigations will never get anywhere and have never gotten anywhere because all these investigators are going to find out very quickly that the investment banks that are manipulating the monetary metals markets and other major markets are doing it as the agents of Western central banks. They are the intermediaries for Western central banks.
Market-Rigging And Manipulation Legal In The U.S.
This market-rigging is fully authorized by law here in the United States. The Gold Reserve Act of 1934, as amended in the 1970s, specifically authorizes the U.S. Treasury Department — through the Exchange Stabilization Fund — to intervene secretly in and rig not only the gold market, which was the original authorization, but as amended in the 1970s the ESF is authorized to rig any market — any and all financial instruments.”
Bill
Yep, I’ve been writing about it for years.
a
Hi Andy,
I try my hardest to stay abreast with everything going on throughout my work day: geo-politically, in all markets foreign and local across all asset classes and commodities, and any other “economic”-related “stuff” that has come out.
I feel much better when you write an article, because I know your rants (in my book ranting is good) cover all the important bases (I mean, even Zero Hedge puts out a lot of…less important stuff).
Anyway, thank you for continuing to write your articles that put *everything* important in perspective, and the truth, although I’m sure you’re probably thinking there are a million other things you didn’t get to comment on.
And as an added bonus, reading your articles has improved my vocabulary. “Presage” was a new one today, I just wish you were writing, and I was reading, before I sat for the SAT/GMAT/GRE. I would have nailed the verbal!
🙂
You’re welcome!
What does “TPTB” stand for? Thanks.
Per the below article, “the powers that be”…
/abbreviations
The power within you exists.
How can Little me fight the cabal..
One way is to remove yourself from their house of cards.
As long as we have debt we support their system of building wealth from the toil of others.
One method of extraction oneself from Slavelandia is to sell your house. Pay off your bills. Invest in PMs and sleep better at night.
Just think about how much interest you have paid the banks in your life on nothing but a computer entry they made.
Banks do not use cash when giving us credit. They simply make a computer entry.
Another great summation of the so-called “high” points that are occurring around the globe. Thank you Andy. As to the hostilities that are escalating in the Ukraine, the Kiev west backed puppet regime of Poroshenko, made a request to Canada for military aid.
http://www.en.voicesevas.ru/index.php
Well, low and behold! While perusing a news sight linked above, (excellent war coverage) I came across an item showing military equipment being examined in the “Debaltseve Cauldron” and a modern kevlar military helmet that had a Canadian Military label inside! Looks like not only the US, but ‘other’ western governments are hip deep in this mess.
Michael Pento was correct, if only off by few days. Here is the video of rioting from streets of Athens. I couldn’t have possibly been eagerly waiting for such a negative development. But in an upside down world where truth is lost, unfortunately seeds have to sprout from ashes. This is only going to eventually spread to our part of the world.
https://www.youtube.com/watch?v=ixIckyCDhKU
Yep, and he’s going to massively more right in the coming four months. “Grexit” is now guaranteed.
a
Stackers Hope, and so, they are stackers, they are the engine, that pushes the metal prices every so higher, continuously, day after ground hog day, after ground hog day, creating the demand exceeding supply, from one manipulatory epoch to the next, the continuous rinse and wash of the specs seeing the demand, they get hungry for profit, and start to go long, the bullion banks ringing their hands, drooling at the mouth, in anticipation of yet another slaughter of the specs, immune from and miles above the law, and sure enough, prices spike, commitment numbers surge, and bullion banks getting wet, ready to front run signal their bro’s across the world, to get ready to, TAKE HER DOWN, and chi-ching the cash register yet again, in yet another cycle, and sure enough, there’s she blows the big one, zillions of paper contracts hit the crimex in a nanosecond when no one is around, the specs getting slaughtered, like who would have known, after 15 years doing the same ground hog day after ground hog day, as the stacker bugs get depressed from price, but suck it up, in defiance of the rigging, the lawlessness, the bankster driven recurrent sucking action, through undue influence over the politicians, blowing trumpets that they are TBTF TBTJ, as another Epoch hits the charts, the specs washed out, the bullion banks collecting the ill gotten gains, smoking a fat cigar with a cognac chasers, happy with their DC totalitarian socialistic fascism as the stackers stay firm in conviction, and buy more coins, and stack em high, to set up the specs, once again, as the criminal elite use the banksters to suck the peasants dry, through the political contributions and influence, so blame all this rigging on the gold bugs, for believing in honest markets, real hard honest money, which as we know, is just so 20th century, a mentality of a bygone great era, of that which once was, but dont tell the stackers, they are actually in practice, in conspiracy, and enabling the bullion banks to suck the specs dry, in recurrent fashion, and will continue to do so, until the ponzi scheme collapses, and all but the stackers are left in ruin, save of course that tiny 1%, the two real long term winners in this cyclic show of symbiotic back slapping in fact, though not in words, and so, you stackers, keep buying them coins, set up them specs, the bullion boys love you for it, and the 1% will always appreciate your convictions, your tenacity, your love of honest markets, honest money, the pipe dreams, and the republic that once was, until such time, of course, the implosion, the collapse, the reset, only hoping that from the ashes, we rediscover as a whole, freedom from government, constitution, republic, real money, honest markets, as there is always the prospect of hope for change.
India 2015 budget is a disaster for physical metal demand, and a boon for continuing paper gold fraud.
India was expected to rescind criminal gold import tax, which was imposed on behest of Rothschilds at gunpoint. Nothing of the sort has happened. Gold smuggling into India will ramp up again.
This proves that the new Modi government in India are liars and fraudster agents of Rothschilds themselves, just like their Congress predecessors. Getting elected with a big “hope and change” landslide, but then lying after coming into office. They lie with the Rothschild mantra that physically importing gold causes trade imbalance. Shows what dirty fraudsters they are. How can importing physical gold cause trade imbalance, if gold itself is money?
Agreed, they are criminals.
That said, Indian demand will only rise, now that the people realize the new government is going to continue the money printing; and this, with the Rupee again, just 6% from its all-time low (and Rupee Gold just 23% from its all-time high).
Smuggling will surge further, and get smarter.
a
Biggest gold news is maybe 30 years.
http://kingworldnews.com/andrew-maguire-2-28-15/
Finally it looks like the manipulators will be shut out of their games.
Mike Maloney has stated that
“You don’t have to wait 100 years for massive wealth to be transferred toward you. History shows that the greatest wealth is created in the shortest period of time, during the portion of the cycle where commodities are outperforming paper assets, and when the precious metals are revaluing themselves.”
I think there is a good argument in favour of saying that we are approaching in the near future just such an event.
Considering that it does appear that we may soon exit a period where PMs have been seriously been undervalued and where equities have been extremely over valued.
Currencies are under attack all over the world and in my view we are entering a period of revaluation on many fronts.
A good time to be sitting on the sidelines with some PMs waiting to see if in fact the powers to be have lost control.
I think Richard Russell has it right when he says peace of mind has value.
And now in Russia, a Putin critic is shot to death in moscow, the putin apologist PGR at KWN will say anything to slam the US, PGR suggests its a CIA plot to blame Putin. Its a crime in Russia to degrade a public official, “with all do respect” required. Free speech anyone? Not that the US is perfect, as I know from personal experience. Be it the stealing of Crimea through territorial czarist imperialism, the MAL shoot down over Donest, or the Putin critic assassination in Moscow, the bias of this Putin apologist reeks through every word. Its not that the US is clean pushing its agenda unfairly, as it certainly is, but this putin apologist is just way over the top.
So at KWN, PGR starts off: “There are numerous historians and memoirs that have documented that the CIA has used academic professors and journalists to support the CIA’s agenda. The CIA for many, many decades has been manipulating the American people.” Setting up his “analysis” for suggesting the CIA shot a putin critic. This is really lame. You stole a candy bar, you beat up your brother, you said bad words to the teacher, and thus, you must have committed the murder, no doubt.
Typical outcome from the biased minds, and is viewed poorly upon KWN for putting this out there, when the thrust was of course propaganda “manipulating the American people”. kettle and pot comes to mind.
Caught On Tape: The Moment Boris Nemtsov Was Assassinated
Submitted by Tyler Durden on 02/28/2015 – 19:09
As the world contemplates the various ‘provocation’ scenarios – a Russian act, a CIA act meant to look like a Russian act, or a Russian act meant to look like a CIA act? – the following clip suggests this was anything but an ad hoc shooting… Questions remain, but Soviet ex-President Mikail Gorbachev is sure, the assassination of opposition politician Boris Nemtsov as an attempt to destabilize Russia.
And if this was a CIA hit, what does that really say about the FSB (federation secret Bureau) competence?
ZH is a tad more fair, giving A B C multiple test question. Gorbachev, the soviet towel thrower, would not be fair, and is just as bad as PGR.
A more realistic story, (OUT OF THE BOX HERE).
W.Ukrainian kill Russia allied politician in Kiev, and Russia FSB killed Putin Critic politician in Moscow. tit for tat. What ever happen to prisoner swaps?
Been a year now since many bet on Russian tank columns in the Ukraine, as yours said no way. NATO aint going into Ukraine and Russia aint invading Ukraine, as the proxy civil war continues, splitting Ukraine, in civil war, as direct confrontation will not happen between US and Russia, while Ukrainians die. This confrontation was started BECAUSE of W.Ukranian nationalism, US intermeddling, and czarist territorial imperial Putin, a sesstia, crimea, arctic land grabber.
1) W Ukrainian should have impeach by civil proceeding Uke prez for wrong doing, if any, and not depose by gun point.
2) US should not have been subversive in Ukraine encouraging W.Uke nationalism, (but lets look at the shinny side, the FED had its way, and stole Uke gold.)
3) Crimea should not have had independence vote, unsanctioned by the whole of Ukraine.
4) Russia should not have annexed Crimea, initiating the counter move of US sanctions.
Blame all around of course.
Incompetence pervades and permeates.
We can pretend that everything is fine but in the end an aspirin does not make an illness go away..it only interrupts the pain for a short time.
We can extend our ability to function when ill but in the end the severity of the illness will determine the amount of time in which we can extend.
World economies are unhealthy. fiat currencies are under attack.
Yes, we can pretend that we can manage the level of debts world wide but in the end this debt will bring us to a smashing halt.