It’s late Friday afternoon, and the markets just closed after one of the most tumultuous weeks – and half months – since the 2008-09 financial crisis. Not just due to wildly “volatile” financial markets, mind you – which I put in quotes, because all the downside action was “capped,” and all the upside moves “aided.” To the contrary, news flow from all four corners of the globe is dramatically, terrifyingly deteriorating – politically, economically, and socially.
Like, for instance, the sheer desperation of the world’s richest men and women; who from their cushy Davos, Switzerland digs – where a hot dog costs $48 – lamented how the upcoming “Brexit” vote could easily, in and of itself, take down the already cratering European Union. Or Germany’s Finance Minister, Wolfgang Schaeuble, emphatically insisting that Greece will NOT be “bailed out” unless the IMF participates; whilst IMF head Christine Lagarde, on the cusp of being re-elected – insists it will NEVER fund a bailout unless Greece receives debt relief. A condition, as we know too well, Germany will NEVER agree to.
Or how about a currency rout so extreme, the Russian Central bank called an “emergency meeting” yesterday? Or Venezuela, mere weeks from default? Or Moody’s putting $540 billion worth of energy-related debt issues on downgrade review – as well as the credit ratings of essentially every major mining company? Or the CEO of one of North America’s largest railroad warning of “tremendous pressure,” and “strong economic headwinds?” Or high-yield credit spreads surging above 2008’s peak levels? Or the fact that, as of mid-week, $27 trillion of worldwide equity had been lost – in the past two months alone? Or major banks’ bad debt exposures becoming front and center issues, highlighted by Deutsche Bank’s $7 billion write-down?
And so on, and so one; with Wall Street, as always, reacting to the flame-out of its miserable, eternally over-optimistic predictions by slashing and burning earnings and economic estimates; whilst Washington claimed “all’s well”; as the MSM desperately turned a blind eye – per Yahoo! Finance’s “top stories” of the past three days…
- “Goldman COO – oil drop is confusing”
- “Crazy market selloff doesn’t signal a recession”, and
- “Why the heck are markets tanking?”
To that end, with financial markets mere inches from being swamped by the long-awaited “Big One,” this week’s market manipulations – which aside from today’s modest, PPT-orchestrated “dead count bounce,” failed miserably – were as blatant as any I’ve seen in my 25-year career. And by “blatant,” I mean that Wednesday, the second most powerful man in China, Li Yuanchao, said…
“The Chinese government is prepared to intervene again (in financial markets) if liquidity problems are severe enough to lead to systemic risks.”
Next, on Thursday, Mario Draghi said that…
“Due to increased downside risks since the start of the year,” he not only expects interest rates to remain “at present, or lower levels for some time,” but that the ECB will “reconsider its monetary policy stance in March”; i.e, increase QE.
And last but not least, on Friday, Bank of Japan Governor Haruhiko Kuroda said…
“If necessary, the BOJ can expand QQE,” as there are “many ways to strengthen it” – particularly as “2/3rds of the government bond market have not yet been monetized.”
Consequently, the brain-dead, eternally-cheerleading MSM claimed the “bottom” was in, citing “expectations of Central bank stimulus”; whilst moronic Wall Street “analysts,” like Deutsche Bank’s “Jim Reid”,” espoused that stocks are undervalued because “global Central bank money printing remains in the early stages – and could go on for several more years.” As if he hasn’t yet realized that the economy, financial markets, and social and geopolitical order are on the precipice of collapse because of Central printing!
That said, as I ran on the Stairclimber this morning, watching this train wreck play out in slow motion, I considered how, despite record global gold and silver demand, Western demand – particularly in America, issuer of the world’s “reserve currency” – people, generally speaking, still could not care less about Precious Metals. This, despite gold and silver rising each year between 2001 and 2011; as the global economy has collapsed; geopolitical instability surged; and the “final currency war,” led by the Federal Reserve, went thermonuclear. Let alone, amidst an inexorably tightening physical silver market, as evidenced by major shortage events in 2008, 2011, 2013, and 2015.
To that end, let me tell you this. In the run-up to the presentation Andy Schectman and I will be giving in Denver/Boulder next week – which will be heavily attended – I have witnessed a level of Precious Metals interest unlike any since I joined Miles Franklin 4½ years ago. Except, that is, last summer’s dramatic silver shortage event, as discussed in the podcast I did with Andy at the time. In fact, since announcing the Denver event, we have received requests to present in a half dozen cities – which frankly, I expect to be as heavily attended as Denver/Boulder. Quite obviously, more and more people are starting to realize “something is wrong”; and thus, aim to do something about it.
To that end, as I watched the PPT, the Fed, the “Exchange Stabilization Fund,” and the gold Cartel do their things – such as blatantly capping silver at its 200 day moving average of $14.07/oz with prototypical “Cartel Herald” algorithms,” at the same “key attack times” as always, I realized that, more than ever before, the gold and silver “canaries in the coal mine” are truly the “very, very last to go” markets. And thus, that even the slightest upward movement will yield not just a surge, but a torrent of physical PM demand; and not just from “old guard” holders like myself, but millions of new, first-time buyers. In other words, if the mere 4%-5% bounces from December’s multi-year lows could unleash this type of enthusiasm, just think what gold and silver at, say, $1,200/oz and $17/oz will bring.
Which, in light of the fact that Eastern gold and silver demand is at an all-time high; as nearly all currencies are imploding; reinforced my belief, a thousand-fold, that we are indeed on the cusp of the “end game.” That is, when the inevitable Precious Metal demand explosion in Western nations like the U.S. swamps the Cartel’s dying suppression operations – unleashing a world desperate for real money amidst a sea of disintegrating fiat toilet paper. Which, when it inevitably swamps the paper manipulators – as it has in every such instance throughout history – will not only create history’s largest-ever wealth transfer, but change life as we know it for generations to come.