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This morning, a reader sent a worried email about GLD supposedly increasing its inventory holdings by a “massive” 7.4 tonnes on Friday.  According to recent propaganda, we are led to believe this is somehow “bad”; although frankly, I can’t imagine how.  GLD’s holdings are supposed to increase when people are bullish about gold – which is exactly what occurred from its inception in late 2004 until April 2013’s “Alternative Currencies Destruction”; after which, Asian interests started draining the fund at unprecedented rates, in their goal of securing every last ounce before there is none left to go around.

To that end, in today’s 100% rigged world – both markets and media – everything is spun to create a perception favorable to the powers that be, no matter how nonsensical it sounds.  Even Zero Hedge, which properly described the “reason” for this morning’s violent PM raid as pure manipulation – is guilty of perpetuating such propaganda; as even it has been brainwashed to repeat MSM drivel – as was the case this morning, when it referred to markets responding to a “higher dollar.”

For the record, the dollar was up 0.001% this morning; i.e., unchanged, when that copy was published.  Not to mention, the “dollar index” has traded nearly exclusively in the ultra-tight range of 79 to 82 for more than two years, with both a mean and median of 80 over the past eight years.  However, if one were reading about the dollar’s “action” in the MSM – or, sadly, Zero Hedge – they might actually believe markets are “responding” to a “higher dollar.”  Or on days when it happens to be modestly lower, a “lower dollar.”  I’m not sure how loudly we can trumpet the immateriality of the “dollar index” per se; which is not only manipulated by the mandate of the U.S. Exchange Stabilization Fund – plus, the Fed, ECB, BOE, BOJ and other Central banks; but has little or no impact on the real items of value the dollar, euro, pound, yen, and other fiat trash can purchase – like gold, silver, and oil.

For example, gold is down less than 20% from its all-time high in Japanese Yen, and 22% in Indian Rupees – compared to its much weaker performance in the more heavily manipulated Western currencies.  Moreover, as Indian physical premiums are currently more than 20% above the fraudulent “spot price,” it should be quite clear why smuggling has reached unprecedented levels into inflation-riddled India.  In fact, just yesterday the Pakistani government imposed a 30-day ban on gold imports; targeted solely at slowing exploding smuggling into India.  Last month, we wrote of the “Upcoming Indian Catastrophe”; and when looking through the lens of real, un-manipulated data, it’s not difficult to see why.  Remember, in a world controlled by financial despots desperate to portray lies, nothing is as it seems.

Current Gold Price vs Record High

For example, we are told equity markets have been rising due to an ongoing economic “recovery”; when in fact, real evidence – which we have pointed out ad nauseum –states decidedly otherwise.  The fact remains, there has been an essentially 100% correlation between Central bank balance sheets and equity indices since 2008; and clearly, charts such as the one below depict how U.S. stocks simply cannot rise without massive, expanding Federal Reserve aid.

Moreover, not only does empirical evidence tell us markets are not rising due to “recovery” but liquidity and manipulation; but seemingly everywhere we look, we learn that the data used to portray such scenarios is pure fiction.  In China, it was just five months ago when its government admitted economic data is inaccurate, and two months since it changed its historical GDP accounting to make it appear higher – just as the U.S. did four months earlier.  And don’t forget last year’s Chinese GDP reporting fiasco – when the “sum of the parts” didn’t even add up!  Of course, China learned everything it knows about data manipulation from America; which has not only mastered this “art,” but has been caught red-handed.  Obviously, this was the case last month, when a “whistleblower” admitted he was ordered by the BLS to fabricate “jobs” for the September and October 2012 NFP reports; clearly, utilizing criminal tactics to help get Obama re-elected.  Again, for those that would see, nothing is as it seems.

Then we have this morning’s news that for the fourth time in its last six attempts, the ECB failed to “sterilize” purchases of European sovereign bonds.  Sterilization is simply “Fedspeak” for attempts to offset debt monetization with equal withdrawals of liquidity; which the ECB claims it has been doing all along – as opposed to the Fed, which admits outright money printing.  I can assure you, the ECB is still publicly stating it is not printing money; however, the facts tell an entirely different story – which sadly, is more the norm than the exception.  To that end, who knows what “deals” the ECB has with the Fed, regarding the “swap agreements” the Fed undertakes to support European banks?  Technically, such derivatives don’t entail the printing of new money; whilst in reality, that’s exactly what is occurring.  And it wouldn’t surprise us one bit if the ECB is secretly backstopping such trades – as opposed to the Fed simply executing them “altruistically.”

As for the Fed itself, we last week proved QE has been dramatically larger than stated; and sadly, such deception could be discovered by anyone with a crude calculator and functioning brain.  And thus, why anyone would believe they are currently “tapering” is beyond me or, for that matter that they ever will.  Regarding proof, if there’s one thing that’s been decidedly proven over time (nearly 600 times), it’s that fiat currency regimes are Ponzi schemes that always fail.  Thus, the Fed cannot – and will not – reduce actual Treasury monetization; particularly given last month’s PBOC statement that it is “no longer in China’s favor to continue accumulating foreign currency reserves.”  I mean, seriously, now that rates have been rising, who on Earth is expected to pick up the slack of the “sucker of last resort”; i.e., the Fed?

Actually, it’s amazing how anything published by the government is believed anymore.  And to that matter, congratulations New Jersey!  Today, you get to inaugurate Chris Christie to another four years of “leading” your state.  Hopefully, you don’t have to cross the GW Bridge during that time.  But I digress, as my point is a general one; of how nothing is as it seems, particularly when related to government information dissemination.  For example, is there anyone remaining that doesn’t realize S&P was soundly punished for downgrading the U.S.’s credit rating in August 2011 – to the point its very viability was challenged?

Today, we learned that former Treasury Secretary Geithner verbally threatened S&P with retribution for the downgrade; which it decidedly got, in having S&P’s CEO fired and subsequently suing them.  True, credit rating agencies were as responsible for the ongoing, global economic calamity as anyone else – per this telling article by Matt Taibbi.  However, S&P was dead on in its analysis of the U.S. government two-plus years ago – as it attempted to rebuild its post-crisis image; and thus, it could not be more clear it was kowtowing to government pressure when it issued this ridiculous “retraction” last June; upgrading America’s “outlook” from negative to stable despite making the below, damning statement in August 2011.  Last I looked, government spending has since dramatically increased; interest rates are higher; and the national debt increased from $14.1 trillion to $17.4 trillion, with no end to this veritable debt explosion in sight.

We could lower the long-term rating to ‘AA’ within the next two years if we see that less reduction in spending than agreed to; higher interest rates; or new fiscal pressures during the period result in a higher general government debt trajectory than we currently assume in our base case.

Standard and Poors, August 5, 2011

And then you have today’s top stories – like Germany repatriating a measly five tonnes of gold from the Fed during 2013, of the 300 tonnes it asked for.  Moreover, even that gold may not be the actual gold the Fed was storing for the Bundesbank; as rumors are rampant that the gold returned to the Bundesbank was melted down and re-cast before delivery.  And then you have the President of Germany’s top securities regulator, Bafin, stating this week that worldwide gold manipulation is “worse than LIBOR rigging”; which itself, should be viewed as the “shot heard round the world” it is.  In due time, my friends, in due time.  Actually, I’m going to write further of this jaw-dropping statement tomorrow, as it simply cannot be understated in its importance.

Anyhow, TPTB were ready to go as the holiday weekend ended; attacking PMs viciously with their 12th “2:15 AM” EST attack of this year’s 13 trading days.  Not a shred of news or market movement elsewhere – other than the usual pre-market goosing of the “Dow Jones Propaganda Average”; but the Cartel was intent on pushing PMs back below their multi-month “lines in the sand” at $1,250/oz. and $20/oz., respectively.  Not to mention, the 50 day moving average so many “technical traders” still utilize, at $1,241/oz. and $20.04/oz., respectively; with both metals breaching these levels at EXACTLY the 7:00 AM EST open of the ultra-thinly traded New York “pre-market” paper platform.

24hr Gold Silver Chart

Just incredible, to the point that even Richard Russell spoke of gold manipulation decisively in his most recent commentary…

It’s a mystery how many items can be manipulated – gold, short rates, bonds, long rates, the stock market, the dollar, the CPI, and the economy.  All of these are being juggled.

King World News, January 21, 2014

Comically, it was reported – by egads, Zero Hedge – that this morning’s PM attack might be due to former Fed mouthpiece Jon Hilsenrath of the Wall Street Journal writing about his expectation of further “tapering” at the January 29th Fed meeting; i.e., Bernanke’s last hurrah.  The fact that tapering is a mirage – per what we wrote above; or that it’s immaterial in the big scheme of things – is not mentioned.  Moreover, that numerous Fed governors have stated such for weeks; or that both stock and bonds were higher this morning, despite the obviously negative connotations.  And oh yeah, the fact that Hilsenrath vehemently wrote last Fall that the Fed was guaranteed to taper in September; which of course, it didn’t.

Again, the point here is that nothing is as it seems when it comes to the government – and government agent – information dissemination; much less, movement of the PAPER markets they manipulate.  To the contrary, what does matter is the reality of our everyday lives – in which the economy is dramatically weakening; inflation squeezing our ability to make ends meet and PHYSICAL gold and silver demand at all-time high levels.

Increasingly, it’s appearing that the end of the road for global government “can kicking” is nigh; if not now – as Russell predicts, below – than sometime in the relatively near future.  Remember, if you have not PROTECTED yourself when it arrives, it will already be too late.  Give us a call here at Miles Franklin – at 800-822-8080 – and let us answer any questions you might have.

My own stance is to stand aside and watch history unfold.  I’m not sure why, but I believe that this year is the year when the excrement hits the fan.  My instinct is to be in gold and pray that it all turns out for the best.

King World News, January 21, 2014