Today’s article is one of my scariest yet; as, after watching events unfold in the world’s most notorious geopolitical hotspot in recent weeks, it’s difficult to come up, using my best Spock-like logic, with an alternative conclusion to the potentially catastrophic one I’ll discuss today. Which, if it occurs, may catalyze not only the financial “big one” we all know is coming, but an era of political, geopolitical, economic, and monetary destabilization unlike; and potentially, unparalleled in its destructive value; anything yet witnessed.
That said, as serious as this topic is, I’d be remiss if I didn’t update you on the incredible depth of PiMBEEB headlines from the past 24 hours; starting with the epically disingenuous comments from New York Fed President – and former Goldman Sachs Chief Economist – Bill Dudley; validating, in spades, the theme of last week’s “unfathomably bald-faced lies depict a Fed desperate to promulgate a dead meme.”
To that end, said Keynesian Keystone Kriminal had the gall to say “the flattening yield curve is not a negative signal for the U.S. economy”; when, aside from the fact that anyone with a half a brain knows we’re in a recession now, inverted yield curves have perfectly predicted every U.S. recession for at least the past four decades. Not to mention, the fact that yield curves worldwide have simultaneously inverted – including in China, despite its 6.5% “growth rate.” Which, I might add, is the lowest “growth” China has reported in the 30 years it has published such blatantly fraudulent economic data.
Better yet, Dudley topped his own stupidity by proclaiming “halting the tightening cycle would imperil the economy”; which not only logically makes no sense, but is the antithesis of the number one market fallacy – I mean “common knowledge” – of our time, that one should not “fight the Fed.” Pray tell, how is raising rates into a collapsing, historically debt-laden economy “good” for growth, whilst maintaining historically low rates is not? And by the way, taking interest rates from the zero bound – where they were held for seven years – to a piddling 1% a full 18 months later; whilst still maintaining a gargantuan $4.5 trillion balance sheet – excluding who knows how much “off balance sheet”; is hardly what I’d call a “tightening cycle.”
But hey, ugliness is in the eye of the beholder – as compared to every other Central bank (at least, their overt policies), I guess the Fed could, at this instant in time, be considered relatively “hawkish.” I mean, just yesterday, Bank of England Chief – and former Goldman Sachs partner – Mark Carney, did everything in his power to talk back the perceived “hawkishness” of last week’s BOE decision to maintain a 0.25% interest rate by “just” a 5-3 vote; claiming he’s “still worried about BrExit’s impact on the U.K. economy”; and thus, “now is not the time” to raise rates. As if such a time will ever arrive, in a nation whose banking sector rivals even China’s shadow banking sector as the world’s most leveraged.
And speaking of ugliness, to end this extremely ugly topic, does anyone out else sense, as I do, that it’s no “coincidence” that the Fed did everything it could, from a monetary standpoint, to support the Obama Administration – whilst doing everything in its power; like, say, raising rates into a plunging economy, and hinting it may “normalize” its balance sheet; to sabotage Donald Trump? You know, the “low interest rate person,” and “King of Debt,” who claims the “too strong” dollar is “killing” us.
OK, now that today’s “housekeeping” is behind us, let’s move on to one of the direst topics I’ve been forced to address – based on the mosaic I’ve developed in watching historically ominous geopolitical events unfold. Which, per today’s title, have caused me to “update” my internal “most likely to catalyze the big one” forecast. Not that I, or anyone else, has a “crystal ball” regarding the potential for major events to occur – particularly “black swans” that, by definition, could not possibly be predicted. That said, plenty of “grey swans” are lurking in the forefront; i.e., the “known unknowns” Donald Rumsfeld would have been watching – in his case, likely centered around his traitorous “neocon” circle.
In 2013, I wrote of the “neck and neck race to catalyze the big one”; citing Greece and India – the former, due to the accelerating economic collapse that, four years later, is much worse; and the latter, due to the draconian Precious Metal tariffs they issued at the time, in a gold and silver loving country whose “currency,” the Rupee, had plunged to a fresh all-time low. Today, the Rupee is barely higher – and India has been thrown into monetary chaos by the “cash ban” imposed by its despotic Prime Minister, Narendra Modi; which is probably why Indian Precious Metal demand is again surging, whilst India now accounts for roughly 10% of all Bitcoin trading. Thus, despite neither nation having actually “catalyzed the Big One” since that article was penned, they are both far closer than ever before. And if not for the historic market manipulation that will ultimately end in catastrophe, Greece, India, and perhaps a dozen other “grey swan” nations may well have catalyzed the Big One already.
Fast forward to 2017, to a world with many more potential catalysts, given that the global economy is much worse than 2013; the debt situation worse than any time ever; political strife, social unrest, and geopolitical tension unlike anything since World War II; and the monetary destruction, unparalleled in human history. Frankly there are too many “swan-like” issues to address at once – which is why the FREE, DAILY Miles Franklin Blog is so invaluable. However, given what appears to be an increasingly dangerous situation in the aforementioned geopolitical hotspot, it’s time to unveil my “newest most likely to catalyze the Big One”; and with it, the hideous Cartel that has all but destroyed the mining industry in its two-decade quest to kick the can as far as possible, yielding the inevitable PM price resurgence that must mathematically occur. To that end, consider the explosion we are currently witnessing in the crypto-currency space, as the world starts to realize the end of history’s largest, most destructive fiat Ponzi scheme is at hand; and realize that when it inevitably devolves into chaos, history’s oldest, most time-tested stores of value will be in demand like never before – at a time when the global population has never been larger; and physical gold, silver, and platinum supply never lower, relative to the amount of “money” printed.
While Greece, India, and countless other nations may pose the fiat Ponzi’s greatest near-term threat – not to mention the U.S., based on the potential for a Trump impeachment, debt ceiling crisis, and economic Armageddon – my “vote” for most likely to catalyze the Big One is the Middle East; and more specifically, Saudi Arabia.
For the past year-and-a-half, since oil “bottomed” at $27/bbl, NO ONE in the financial media – mainstream or alternative – has more vocally criticized the blatant attempts to support prices amidst history’s largest crude oil glut. A glut, I might add, that is not the slightest bit improved after six months of “production cuts” – and arguably, much worse; as not only did OPEC production hit a post- “production cut” high last month; whilst “exempt” members like Iran, Nigeria, and Libya ramped up production; but non-OPEC supply has surged – particularly in the U.S.; as the big pink elephant in the room, demand, has declined, with the likelihood of falling further in the coming months, as the world plunges into what will, in hindsight, be considered the “Greatest Depression.”
I’ve made it crystal clear that I believe an ad hoc “oil PPT” was created last year to support prices in the paper markets – via a combination of futures buying; “partnerships” with major hedge funds; and relentless, algorithm-driving propaganda regarding the unending “great news” that never pans out; at least, not in the hideous supply/demand numbers. Yes, an “oil PPT” – which is clearly falling apart, now that the production cut “extension” has resulted in freefalling prices, causing said hedge funds – which LOL, held record crude oil longs just two months ago – to capitulate; as the supply and demand numbers have continued to – dramatically so – worsen.
Long-time readers are well aware of this – including my recent, rapidly strengthening belief that said “oil PPT” was, like the gold Cartel, “managed” by the U.S. government. In the gold Cartel’s case, to suppress the perceived principal competition to the dollar’s dying hegemony – which now, is being challenged, too, by the “twin fiat destroyer,” Bitcoin. And as for the oil PPT, to not only prop up the hundreds, if not thousands of debt-laden energy companies in danger of collapsing, but “save” its only Middle Eastern “ally,” Saudi Arabia – which is not only in dire financial condition, but in danger of having its “Great Satan Apartheid” government overran, by the vast majority of Saudi citizens who do NOT want America’s “protection.”
Frankly, if Saudi Arabia cannot IPO the 5% of Saudi Aramco for the absurd $100 billion valuation it desires – which as of today, I give ZERO chance of occurring, the Kingdom may well collapse at prices not much different than today’s ten-month low of $42.75/bbl (WTI). Let alone if, as I anticipate, prices plunge into the $30s. And trust me, it’s not just crude oil, but all commodities that are under pressure – as the DEFLATION causing the world’s Central banks to print more money today than ever before intensifies, making the Fed’s inane, soon-to-be-abandoned “policy” appear that much more ridiculous. TRUST ME, when the CRB Commodity Index breaches February 2016’s post-financial crisis low – as I predicted it would in January 2015’s “direst prediction of all,” with the CRB at 250, versus 169 today – there is NOTHING Central banks will be able to do to stop it; including the ZIRP, NIRP, and QE4 schemes the Fed will unquestionably, desperately adopt.
To that end, would said “oil PPT” do anything to push oil prices back up; just as the gold Cartel has done everything in its power – like dis-hoarding most, or all, of the Fort Knox and West Point gold – to prolong the dollar’s dying hegemony? You bet it would. However, it’s not until the past few weeks; “coincidentally,” as oil plunged below the oil PPT’s year-long “line in the sand” at $50/bbl – that it’s starting to appear they may actually try to catalyze Middle Eastern WAR to do so. And by war, I mean the type where oilfields are attacked; like equally “coincidentally,” yesterday’s “foiled Iranian terrorist attack” on a Saudi oilfield. Which “coincidentally,” occurred two weeks after Donald Trump met with the Saudi leadership and one week after the first-ever terrorist attack on Iranian soil; which immediately, the Iranian government blamed on Saudi Arabia. Throw in the fact that Trump told Saudi Arabia’s leaders Iran was a major threat; which yesterday, Secretary of State Rex Tillerson mirrored; and it’s difficult to believe something evil is not afoot. Oh, and did I mention that also last week, Saudi Arabia all but declared WAR on Qatar for LOL, “supporting terrorism”; when more likely, it’s greatest “sin” is sharing one of the world’s largest natural gas fields with…drum roll please…Iran.
Throw in the U.S. escalation of its attacks on Syria – in direct opposition to Iran, and its key allies China and Russia’s, interests; and its intent to deploy up to 20,000 new troops to Afghanistan; and it couldn’t be clearer that Donald Trump’s Middle East blood lust – not to mention, his North Korean fervor – are at least on a par with the greatest political warmonger of our time, Hillary Clinton.
In other words, though I have no way of “proving” anything, it’s difficult to believe America is not angling for Middle Eastern war; “coincidentally,” in the best interests of the kings of terrorism themselves, Saudi Arabia; which just happen to be the last hope for the rapidly dying Petrodollar standard. To which, I can only say that if I’m even remotely close to the mark, the world – and gold Cartel – are headed for a potentially catastrophic chain of events.