Over the years, whenever I’m asked if the CFTC will crack down on gold and silver manipulation, my answer has unwaveringly been the same – NOT A CHANCE. My reasoning is as simple as can be; that is, the government’s steadfast goal of maintaining the status quo – no matter how many suffer as a result – will NEVER be ended by a self-inflicted gunshot. After all, the CFTC is a government agency; and thus, why would anyone expect it to contradict government plans?
The same goes for the government at large; which care of a recently successful “policy” of MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA, actually believes it can “sustain the unsustainable” indefinitely. In their eyes, if they can convince people a higher stock market signifies imminent “recovery,” the masses will continue to listen to their lies; no matter how much they contradict REALITY. Similar efforts have been attempted throughout history, and ALL have failed. It will be no different this time around – no matter how many derivatives are utilized.
Using such tools, they create “straw men” to tear down; such as the meme that stocks are terrified of government shutdowns and debt ceiling impasses, whilst Precious Metals “love” them. The fact the Dow Jones Propaganda Average sits just below its all-time high (not adjusted for inflation or survivor bias, of course), while gold and silver have already been torched, is immaterial when preaching to a population resigned to misery, which cares only when its next EBT card will be filled. Not that they really care in the first place; as aside from those actually on furlough, few have any clue what the “government shutdown” or “debt ceiling” mean.
And sadly, the same goes for Europeans; who given their sorry, sordid history of war, corruption, and inflation, should know better. Then again, they too are living a hopeless existence where “1%” owns everything, and the rest rely on them for survival. That said, how ANYONE can believe rising European stocks are indicative of ANYTHING other than “intervention” is beyond me. Spain’s IBEX index, for instance, has nearly doubled in the past year; despite a PMI business activity index below 50 until this month, when it barely turned positive. GDP remains negative, unemployment at an ALL-TIME HIGH; and per below, home prices and bank loans remain in FREEFALL.
Remember, when Spain’s banking sector was bailed out with €100 billion of freshly printed ECB money last summer, it was the morbid housing sector that was its main cause. Fast forward to today – when the housing market is in MUCH worse shape; yet, we’re to believe a freely-traded stock market is nearly twice the price? Even the ECB admits the banking sector is in trouble; and yet, such a catastrophe has been largely ignored by the MSM. The same goes for Greece, which yet again is on the verge of another bailout; and, for that matter, the United States of Fraud – where yet another bank, in this case Bank of America – reported “earnings” so fraudulent, they’re an utter embarrassment; i.e., another blaring signal for the rest of the world to SELL, SELL, SELL dollar-denominated assets.
Back to my point, the odds of the game ending with the U.S. government shutting itself down are practically ZERO, in my opinion. And no, I’m not speaking of the past two weeks faux shutdown – in which roughly 90% of government jobs were unscathed, under the guise of being “essential” to national security; but instead, a real shutdown triggered by failure to raise the debt limit. Not to mention, the associated default on U.S. Treasury bonds – which theoretically, is impossible given the Fed’s unlimited printing press capability. In other words, there is NO WAY a tiny group of 536 people – who rely on public confidence to keep their jobs – would allow a generational tragedy to occur due to procedural squabbling. And not to mention, such an event would forever cast them as pariahs in global history books.
No, instead they’ll most certainly come up with a “deal” similar to the “fiscal cliff deal” of last New Year’s Eve, or subsequent debt ceiling delay that brought us to tomorrow’s “deadline.” The new deal will simply create another “deadline” in January; and in the process, dramatically worsen America’s financial condition and global standing. However, TPTB will – as usual – attempt to manipulate markets to create the perception something positive has occurred. Whether it will succeed or not is another matter entirely; but until such attempts fail, you can bet they will attempt EVERY fraudulent trick in the book.
To wit, we’re told that yesterday, after being violently attacked up until late in the day, gold and silver “soared” because the latest Senate debt ceiling negotiations fell apart; while comically, the Dow’s losses were stopped shy of the “PPT ultimate limit down” of minus 1.0%. Yes, gold was $9/oz. on the day, or just 0.7%, and silver a whopping $0.07/oz.; in the process, capped by every suppressive algorithm imaginable. And thus, we’re supposed to believe the world has ended. Conversely, today we are told Senate and House leaders are optimistic – not un-coincidentally, just after the New York Stock Exchange opened; and thus, gold declined by more than it gained yesterday, whilst the Dow – naturally – gained more than it lost. No matter that worldwide PHYSICAL demand is off the charts – per the below quote from a Miles Franklin Blog reader; so long as the MSM prints “gold down $10/oz.”
I drove into Bangkok on Monday to buy gold ingots. The shop was bursting at the seams with customers, and I stood outside 20 minutes before being allowed in. Bear in mind, they have 12 assistants. Finally, ticked off after waiting outside in the street, the reality was they had completely sold out all gold bars or small tablets. The guy said they would have more tomorrow, and I should come early. You can see this frenzied feeding here cannot last that much longer. All my gold shops locally withdrew all their small bars because of the price drop, hence my need to travel to Bangkok 150 miles away.
You can tell your readers that they the America public are going to see a bloody big movement when it comes.
As you can see, the 2:15 AM algorithm emerged for the 95th time in the last 107 trading days; followed by PAPER raids at EXACTLY the 7:00 AM EST open of the New York “pre-market” session and the 10:00 AM EST “PM Fix”; i.e., “KEY ATTACK TIME #1”…
In other words, no different than any other day over the past six months, no matter what the day’s “news”; which, by the way, consisted of the following, MASSIVELY PM-bullish, – items. One, extremely weak retail sales, and two, an imploding NAHB Housing Index – you know, the one supposedly symbolizing the “recovery” we are expected to be so giddy about. Yes, “tapering” is off the table for the foreseeable future; and with “uber-dover” Yellen taking the Fed’s reins in February, it’s entirely possible my forecast of QE5 will become a reality MUCH sooner than most could imagine.
In other words, the current PAPER attacks are inconsequential to the long-term outlook for PM prices; which, with each passing day of suppression, become more bullish. This is why I bought more PHYSICAL gold yesterday morning, and why I will continue to do so with every free penny I receive. The fact remains that, aside from the deleterious effect on supply due to the Cartel’s inadvertent destruction of the mining industry, the worldwide demand outlook grows brighter at an exponential pace. The “debt ceiling deal,” that will surely be signed before midnight will simply increase the balance on the government’s blank checkbook, enabling it to further spend the nation – and world – into DEBT and INFLATION oblivion.
Furthermore, the diminishing returns on such spending have become so acute, there now exists a negative “return on equity.” In other words, the more they spend, the more real GDP plunges – notwithstanding increasingly fraudulent accounting methods. I wrote of this failure last week; and thought I’d follow up on the topic today, given the need to refute the inevitable PROPAGANDA of how a “debt ceiling deal” is somehow a positive development.
Frankly, to do so, one only needs to present the two charts below – demonstrating just how futile TPTB’s attempts to “reflate” the system have been, other than the stock market, that is. The first depicts the amount of DEBT created since 2008’s Global Meltdown I, creating an embarrassingly paltry amount of real GDP. Of course, the debt increase doesn’t include the assumption of $5 trillion of “off balance sheet” debt owed by Fannie Mae and Freddie Mac; tens of trillions of incremental “unfunded liabilities”; or, for that matter, “shadow banking” liabilities such as off-balance sheet “swaps” to undisclosed European banks. Not to mention, if REAL inflation accounting were utilized, the level of real GDP would be negative…
Last but not least, how about the below chart depicting how overall economic leverage has not budged since its 2008 all-time highs? Yes, government and GSE (government-sponsored entities) leverage appear to have blipped lower; but only because the government fraudulently changed its GDP calculation earlier this year to make the economy appear larger. Even so, the impact is barely perceptible on this graph; whilst corporate and household leverage have also barely changed. And by the way, household leverage only appears slightly lower due to the manipulated increase in real estate prices; which as I wrote of above, are already rolling over due to the miniscule rate increases of the past four months.
To conclude, no matter what occurs by midnight tonight, it will be the “worst for America, but best for Precious Metals.” Any Congressional “deal” will simply mean more debt and inflation; and irrespective, the dramatically weakening economy MUST receive “QE to Infinity” lest it will instantaneously collapse. Conversely, if heaven forbid these fools fail to avert the debt ceiling with such a deal, the last remaining shred of American credibility will be gone forever. Frankly, I think it’s already gone; but then again, even our creditors likely could not conceive America destroying itself with the aforementioned self-inflicted gunshot.
Use this, and ANY remaining opportunities to purchase subsidized REAL MONEY while you still can; as one day soon, there’s a good chance you’ll NEVER get another chance – at any price. PHYSICAL gold and silver have been immemorially utilized as money, with good reason. They are the only substances to possess all the requisite properties; and as of today, there are still no viable choices. No fiat scrip has ever survived, but PMs remain after five millennia of human existence; in both the REAL world, and in fiction – per the below quote from Stephen King’s Wind through the Keyhole…
Ironwood was ironwood, and ironwood always sold for a good price; one paid in shards of silver, rather than scrip.