Where to start, where to start? My head is literally going to explode, as there are so many CATACLYSMIC headlines to comment on! This truly is the END GAME; and frankly, I wouldn’t be surprised if the “next 2008” commences any second – only this time, it will not only be MUCH worse, but irreversible!
I mean, MY GOSH the Indian Rupee is down another 3.5% overnight – to an incredible 68.7/dollar. Just last month, I wrote of the more than tripling of onion prices in India; onions, the single most important staple of Indian diets. That was when the Rupee had plunged to just 57/dollar, before this month’s further implosion of nearly 20%. In my mind, there is nearly NO DOUBT that social unrest – and potentially civilian revolution – is on the horizon; and when it does, don’t be surprised if the first ministry the angry Indians storm is the Royal Bank of India, taking axes and pitchforks to the PRINTING PRESSES. And by the way, the price of Indian Rupee gold has now risen all the way to its ALL-TIME HIGH – at nearly 100,000 Rp/Oz; nearly entirely due to the decline in the currency, as opposed to a rise in the gold price!
Next, you have the price of oil, which last night peaked at nearly $112/bbl before “settling” back to $110/bbl as I write – supposedly due to “Syrian war fears.” On this note, I for once agree with the moronic MSM; as given the morbid, collapsing state of the global economy, there is absolutely NO WAY oil prices should be materially rising.
In fact, I have recently noted how it is truly amazing how retail gasoline prices are NOT rising here in Denver; as in all my years of watching them – remember, I was a Wall Street oil analyst for nine years – I have never seen this kind of disconnect between crude oil and gasoline prices. Clearly, oil companies are afraid to raise gasoline prices for fear already dead consumer demand will plummet further; and thus, are choosing to “take the earnings hit” on their upstream business instead. But TRUST ME, they won’t do that forever; as sometime soon, they will start raising prices at the pump with a vengeance.
On that note, another “tidbit” I picked up in China last month; i.e, retail gasoline prices are significantly subsidized by the government. To wit, when working in the oil industry in 1996-2005, I did A LOT of work on the Chinese oil industry, so I know a thing or two about this topic. China is a VERY small oil producer, with but one major field (Daqing) in the Northeast, which was rapidly depleting when I wrote of it nearly a decade ago. Thus, they are a MAJOR oil importer; so much so, they are now on the verge of surpassing the U.S. as the WORLD’S LARGEST.
And thus, when the U.S. causes a MASSIVE crude oil rally by threatening to unilaterally attack yet another helpless Middle Eastern country (I’m surprised we haven’t marched into Egypt yet, too), the resulting oil price spike causes equally MASSIVE increases in China’s importation costs. And thus, you can bet the Chinese are hopping mad at what the U.S. is doing to their checkbooks right now. Last month, the Chinese – and Japanese, who are also MASSIVE oil importers – sold a record $42 billion of U.S. Treasuries. Just think of how much they plan to sell now; not just to fund the increased imports, but due to the inevitability of a Treasury market collapse?
And speaking of “reasons” for markets to move, I see a provocative MSM headline this morning titled “Is Syria Really Causing Gold’s Rally?” Yes, grasshopper, a good question indeed; especially as a Syrian invasion has been all but a fait accompli for the past year (as I have been literally screaming in my articles).
Sure, it has some impact; but in this “ranters” mind, Syria is but a “pimple on the arse” of the MASSIVE list of reasons PMs are surging higher. If we do indeed start a Middle Eastern war – which it appears all but certain we will – we may shortly experience the “end of the world as we have known it” throughout the entire Western world. However, even if we don’t, Central bank MONEY PRINTING is currently at an ALL-TIME HIGH; set to rocket higher this fall, irrespective of whether we attack Syria or not. And oh yeah, the large majority of the world’s gold and silver mines are still operating below the marginal cost of production, with absolutely ZERO material production increases anticipated to offset the resulting collapse of current mine production.
Whether the ultimate “flash point” of “THE FINAL CURRENCY WAR” is Europe, India, Latin America, or the good old U.S., it will ultimately ignite. Heck, it could be any number of “black swans” as well – such as next week’s G-20 meeting, a breakdown of the currently collapsing South African mining union negotiations, or the upcoming U.S. “debt ceiling” debates. But irrespective, I ASSURE you it’s coming; and when it does, you better have your PHYSICAL gold and silver and hand – as you’ll likely NEVER get another chance to buy them. Ask the Indians, whom are currently forced to smuggle gold at 20% premiums – desperate to protect what’s left of their collapsing net worth’s.