It’s Wednesday morning, the day before what could – but as of now, is not expected to be – the most violently anti-establishment election in global history. Which, if it in fact comes to pass, will shake up the global political, social, and monetary order like nothing ever before it. Amidst a sea of propaganda (like the “importance” of Jo Cox’s murder); lies; and market manipulation, there’s no telling what Britons will actually do – particularly as seemingly each hour, new statistically insignificant polls claim dramatic changes in “sentiment.” Moreover, the Ladbroke’s “odds” of a Brexit vote have been longshots. However, the amount of money “bet” on the event is infinitesimal; and thus, could be easily “altered” by those trying to influence sentiment.
As Mike Maloney said yesterday, “freedom is scary.” And thus, for many UK citizens, government fear-mongering will undoubtedly impact their decisions. Not to mention, the millions of Britons – particularly, immigrants – who support the teat the EU has created for them. However, unquestionably, the facts show that the EU has been a disaster for the UK since it joined in 1973; and given the real threats to not only Britain’s economy, but national identity – created in 1707, and forged over 2,000 years – it’s difficult to believe a powerful wave of nationalism, amidst one of the world’s oldest, proudest peoples, won’t be a significant factor.
Given what I do for a living; and the cause I have championed, and invested in, for 15 years; my principal concern is the monetary impact of the referendum, whether it passes or not. To which, I’ll simply make a comparison of EU failure, to that of Central banks. Regarding the latter, it’s no coincidence that on the eve of the vote, fresh evidence that the world’s four major Central banks are failing miserably is front and center – starting with the ECB itself, whose balance sheet hit a new all-time high of €3.1 trillion, or $3.5 billion, as European stocks fell to their lowest level since negative interest rates were launched two years ago. In fact, European stocks’ 20% plunge from their all-time highs of early last year (yes, QE was launched with stocks at their highs!) coincided nearly to the day QE was launched. And the scariest part of all, is that not only is the European economy at its quantitatively worst level since the EU was created in 1967, but the ECB’s balance sheet is still $1 trillion smaller than the Fed’s. A gap, I assure you, that will be “made up” in the coming years – likely in a hurry, if the Brexit vote passes. Unless, of course, the Fed accelerates its own “monetization” activities first.
Next, we have Bank of Japan Chief – and “Abenomics” architect – Haruhiko Kuroda, last night saying flat out, “monetary policy doesn’t always turn out as expected.” Or in Japan’s case, EVER, as it has now had zero interest rates (or lower) for 20 years, and has been amidst non-stop QE programs for 15. As we stand today, Japan’s economy is at its quantitatively weakest since the end of World War II; with history’s largest public debt edifice; worst demographics; and arguably, the highest probability of runaway inflation of all “first world” economies.
Next up, the People’s Bank of China; which, as I predicted last summer, is accelerating the Yuan’s devaluation – to the tune of 10% – as it takes the “final currency war” I first warned of 3½ years ago thermonuclear.
And last but not least, Janet Yellen’s embarrassment of a speech before Congress yesterday – kicking off her mandated, semi-annual “Humphrey-Hawkins” economic testimony; in which she espoused the same clueless platitudes as always. Universally, from Goldman Sachs; to Zero Hedge; to myself, as I listened to the early part of the proceedings; the verdict was that Yellen said absolutely nothing incremental, in 1) continuing her Obama-esque lies about the “recovering” economy; 2) noting myriad reasons why it’s not the Fed’s fault that “considerable uncertainty about the economic outlook remains” – such as “the latest readings on the labor market and weak pace of investment,” which “illustrate downside risks that domestic demand might falter.”
Tell me Janet…given that the “expansion” is now the second longest in U.S. history, but is clearly taking water more quickly than the Titanic, how far down do you think corporate earnings – and stocks – will fall in the coming years; particularly as their growth has been more of a function of Fed-catalyzed financial engineering than actual organic growth? Such as, for example, borrowing at all-time low interest rates; but instead of investing in property, plant, and equipment (hard to justify amidst a global economic collapse); buying back stock at an unprecedented pace, leaving corporate America with an unprecedented debt load, and horrifyingly weak earnings outlook.
As for the European Union, mere words cannot describe what a disaster its been for its 28 member states. For larger members, like the UK, Germany, and France, the subsidies they have provided for the (dozens of) weaker states have produced little economic benefit, and enormous unpayable receivables. For weaker states like the PIIGS, the ECB’s irresponsible monetary policies, coupled with Wall Street (and “City”) financial engineering schemes, have created debt-soaked zombie economies on the verge of default, political regime change, and social revolution.
European Council President Jean-Claude Juncker says “Prime Ministers must stop listening so much to their voters, and instead act as full-time Europeans.” However, countless anti-EU movements, in nations as diverse as France, Italy, Spain, Greece, and of course the UK, claim otherwise. And if tomorrow’s Brexit referendum, in the EU’s second largest economy, passes, it will likely set off a chain reaction of nationalistic fervor unparalleled in the post-War era. Likely, to levels that even the world’s best market manipulators – like the GOLD CARTEL – can’t control.
Heading into the referendum, the level of market manipulation has been at least as blatant as the propaganda. And yesterday’s unconscionably blatant Precious Metal raid – particularly after Janet Yellen started speaking, in what has been a “key attack event” for the past five years; whilst the “Dow Jones Propaganda Average” was propped with equally transparent DLITR, or “don’t let it turn red” algorithms, couldn’t have been more obvious.
That said, due to the aforementioned, expanding failure of global Central banks, the cumulative rise in stocks, and decline in Precious Metals, leading up to the Brexit referendum has been, for the most part, immaterial. Heck, Monday night, gold traded as high as $1,295/oz, after hitting a two-year high of $1,315/oz last week. Putting it into perspective, this is all the gold Cartel achieved heading into the Brexit referendum…
Whilst this – accompanied by the most violently anti-gold propaganda in memory – is what it accomplished heading into the equally “dangerous” Swiss gold referendum on November 30th, 2014. I.e., a three-month, 13% plunge – culminating with a post-Thanksgiving Friday $25/oz smash (two days before the Sunday vote), that bottomed mere hours after the “no” vote was recorded. Although arguably, given the far more tenuous state of the global economy; potentially far-reaching, hyperinflationary Central bank responses; and the fact that the Swiss National Bank may well have lied about buying gold, even if it was mandated to do so; a Brexit result may be even more “Cartel-destroying” than a Swiss gold “yes” would have been.
At this point, I’ve said all I can possibly say about my vehement belief that not only would Brexit be the most violently PM-bullish event of our lifetimes; but perhaps, the world’s last chance to fight back against the political, economic, and monetary tyranny today’s “powers that be” have exercised. Regarding the latter, a “remain” vote will unquestionably destroy the UK’s economic outlook for years to come, whilst permanently diluting its long, storied national identity. Conversely, the Precious Metal bull market will not be stopped no matter what the British vote; and frankly, a “strengthened” European Union will only mean the ECB has freer reign to destroy the Euro than ever before.
So sit tight with your nest egg gold, silver, and platinum; get a good night’s sleep; and pray for the British to do the right thing – for themselves, and the rest of Europe’s EU-oppressed population!