There will come a time when I’m not waking up at 4:30 am on Saturday mornings – in late August, when the rest of the world is enjoying the “summer doldrums,” no less – to write about the random musings of a handful of unelected, conniving thieves; the appalling, painfully obvious market manipulations that go along with them; and the combination of criminal negligence, collusive fraud, and outright stupidity that goes for the “reporting” of such blatantly fraudulent and collusive, actions – as if anyone is still listening. However, until that time – when the irrepressible, unrelenting forces of “Economic Mother Nature” inevitably win the day – I, and the Miles Franklin Blog, will be here to educate, and hold your hand. As while our business is to buy, sell, and store Precious Metals, our passion is to spread economic truth, and protect as many people as possible, before it’s too late.
Yesterday, my wife told me of someone on Facebook, claiming they listen to the Sirius XM Soft Hits channel so much, they literally get sick when they hear Gordon Lightfoot’s name. I can certainly empathize – having had Sirius for a decade, and listening to the 80s channel play Guns and Roses several thousands of times. However, such revulsion doesn’t hold a candle to the nausea I feel when I hear “Federal Reserve”; “rate hike”; “Janet Yellen”; “CNBC”; and anything related to the lies and propaganda that have dominated my professional life throughout the 21st century; particularly Whirlybird Janet, the “Fed Chair who kept Yellen’ Wolf.”
At least, amidst equally blatant efforts to “talk up” oil prices with lies about the “working off of excess inventories” and imminent “production freezes,” key players actually tell the truth once in a while – like Iran’s oil minister yesterday, in claiming he would only agree to freeze production after Iran reaches its pre-sanction production level of 4.0 million barrels per day, 400,000 barrels per day above today’s level. In other words, the odds of an agreement at the informal producer meeting on September 26th-28th – as if merely “freezing” production at record levels, amidst record inventories and weakening demand, from one of the most notoriously lying groups the world has ever known, would have any impact; are as small as the Fed raising rates on September 21st – amidst a collapsing global economy; maniacal monetary easing from all Central bank “competitors”; and oh yeah, an historic presidential election six weeks hence, in which Janet Yellen needs Hillary Clinton to win if she wants to keep her job. Again, as if a ¼ point rate hike from the, for all intents and purposes, “zero bound,” would be “Precious Metal negative”; when not only is there ZERO empirical evidence to suggest as much, but the current PM bull market literally started the day the Fed last raised rates. And by “last,” I mean it was not only the last time they raised rates (since 2006), but likely the last time they ever will.
I mean, talk about walking a tightrope – in trying to feign “hawkishness” in a world where financial asset valuations, due solely to historically easy monetary policy and unprecedented market manipulation, are at their highest-ever levels; amidst the unequivocally weakest economic conditions of our lifetime. Which, I might add, have caused all other Central banks to continue the “emergency” responses that have been ongoing since 2008. Not to mention, the fact that the very act of raising rates, even by a measly ¼ point, would not only destroy financial assets, but an historically indebted economy; particularly the world’s largest debtor, the U.S. government that “employs” it; and the world’s largest hedge funds, the Central banks themselves (which collectively own $25 trillion of fixed income assets, led by the Fed’s $4.5 trillion). Trust me, there’s good reason 2016 started with the biggest January stock market decline in history – and trust me, the Fed is well aware of it.
Yes, “last to go” stock indices like the “Dow Jones Propaganda Average” remain near record (nominal) levels, care of unprecedented “support” from manipulation operatives like the Exchange Stabilization Fund and President’s Working Group on Financial Markets. However, the rest of the world is not faring so well; and even here in the Exceptional States of America, the veneer of market prosperity is shadowed by the fact that equity outflows have exploded and share buybacks dried up; whilst the put/call ratio has risen to a record high; corporate earnings have declined for six straight quarters (and will decline faster if the Fed is dumb enough to raise rates, and push the dollar higher); and by all metrics, stocks valuations are higher than in 1929, 1987, 2000, and 2008. Throw in the fact that pension funds – of all types, in all nations – are historically underfunded, and you can see how vulnerable the entire world is to even the mildest of financial shocks. Which I assure you, would feel like a 10.0 Richter scale earthquake, were the Fed dumb – and suicidal – enough to attempt a September rate hike. Which, by the way, is exactly what I (correctly) warned of last September, just before they were stupid enough to put such a moronic plan in place in December – amidst a political, economic, and monetary environment far more benign than today. And I’m sorry, but there’s no way I’m going to pass up an opportunity to re-print what I wrote in that article – 12 months ago – about the “oil PPT,” given that I could just as easily have written it, nearly verbatim, today.
“Worse yet, the comical, “oil PPT”-enhanced dead count bounce in crude oil (but strangely, few other commodities) decidedly failed – despite the mobilization of everything from fraudulent headlines (Saudi Arabia invading Yemen, OPEC considering production cuts); to economic “recovery” propaganda (despite relentlessly weak data); and most importantly, algorithms gone wild. Earlier this year, the newly-formed oil PPT engineered a nonsensical WTI crude surge from the mid-March low of $42/bbl to nearly $63/bbl six weeks later. However, the current leg down took WTI crude below $38/bbl last week, before the aforementioned, equally nonsensical surge coinciding with the PPT temporarily “saving” the stock market last Wednesday. That said, said “surge” topped out Monday at less than $49/bbl – and as I write Wednesday morning, is back to $44.50/bbl, following not only oil’s biggest down day since 2009, but a shockingly huge API inventory build after the close.”
Regarding Jackson Hole, the sleepy, late August “symposium” hosted by the Kansas City Fed was completely ignored – with good reason – until, 2012, when Helicopter Ben used it to first hint of the Fed’s upcoming QE3 launch. And since 2013, coincidentally around the time of the “alternative currency destruction” PM raids that started the day after the infamous “closed door meeting” between Obama and the top “too big to fail” bank CEOs, the Jackson Hole boondoggle – as well as FOMC “minutes” announcements, Humphrey-Hawkins Congressional testimony, and any time a Fed Chairman or governor is so much as interviewed, have been used as de facto “FOMC statement” opportunities; which the Fed, in collusion with said “manipulation operatives,” uses to shape perception by smashing gold and silver, whilst goosing stocks and bonds. In other words, creating a “meme” for algorithms to run wild with, that anything the Fed says is good for stocks and bonds, and bad for PMs – even if what they say directly contradicts something they’ve recently said.
In this case, relentless goosed stock prices, and the most maniacal Cartel attacks I have ever seen – during the ultra-quiet late August summer doldrums – created a perception that Janet Yellen would say something “hawkish.” This, despite a week of horrible economic news, including not only weak PMI service and manufacturing indices, plummeting Kansas City and Richmond manufacturing indices, declining corporate profits, a 10% decline in year-over-year core durable goods orders, and a 1.1% second quarter GDP print. Not to mention, global data just as bad – such as the “ugliest economic data I’ve ever seen,” published in Japan one week earlier; the aforementioned record high financial asset valuations; and oh yeah, that little old election less than three months away.
Conversely, I have been as “anti-meme” as could be, in claiming there’s no way Whirlybird Janet would be even mildly hawkish, given such circumstances. And she didn’t disappoint, by producing a speech that was, in the words of Macquarie’s Thierry Wizman, “a whole lot of nothing.”
Well, not quite “nothing.” As, aside from the one comment the moronic, compromised MSM, and collusively anti-gold Wall Street focused on – that the “rate hike case has strengthened in recent months” (which given the aforementioned economic data, makes absolutely no sense) – the speech could not have been more dovish, as exemplified by this statement, which frankly, speaks for itself.
“As ever, the economic outlook is uncertain, so monetary policy is not on a preset course. Our ability to predict how the federal funds rate will evolve over time is quite limited, because monetary policy will need to respond to whatever disturbances may buffet the economy. In addition, the level of short-term interest rates consistent with the dual mandate varies over time in response to shifts in underlying economic conditions that are often evident only in hindsight. For these reasons, the range of reasonably likely outcomes for the federal funds rate is quite wide.”
Yes, “quite wide,” as in the Fed’s current “dot plot” depicts a range of year-end 2018 Fed Funds rate predictions of 0.0% to 3.8%! Which is also why, in the immediate aftermath of the speech’s release, rate hike odds plunged, whilst the Treasury yield curve flattened to an all-time low (assuming recession). To that end, it certainly didn’t help the “recovery” meme when she actually discussed policy response alternatives, such as “future policymakers may wish to explore the possibility of purchasing a broader range of assets.” Like corporate bonds and equities, for instance?
Moreover, if one actually reads her comments, it becomes readily apparent why the “obsession of idiocy” is so obvious – starting with the aforementioned “strengthening of the rate hike case in recent months,” in stark contrast to the utter collapse of economic data, both here and overseas, that the supposedly “data dependent” Fed relies on.
To wit, Yellen claimed – again, in a completely ambiguously and vague manner – that the economy is “nearing the Fed’s employment and inflation goals.” Regarding the former, “BS NFP” headline data notwithstanding, it doesn’t take rocket science to see the four decade low in Labor Participation, or the increasing proportion of low wage, part-time jobs making up the “jobs” data. Or the massive amount of layoff announcements – of high quality, high paying jobs – in essentially all industries. Or weakness in the “employment” component of nearly all economic activity indices.
As for the latter, how can the Fed’s “inflation goals” be considered “reached” when, just one day earlier, Dollar Tree and Dollar General reported that none other than Walmart was cutting prices so sharply, they might be forced to lower prices themselves. Yes, the “dollar stores” – like money market funds, in response to lunatic NIRP monetary policies – may soon be “breaking the buck.” And did I mention that yesterday, the consumer confidence index reported the lowest ever inflation expectations?
I could write multiple pages refuting these two inane comments alone – but suffice to say, the market didn’t buy it. And FYI, never did, given that 85% of all Wall Street observers, contrary to the aforementioned, CNBC promulgated “meme,” anticipated a dovish statement. Heck, even “Fed Whisperer” Jon Hilsenrath wrote a scathing article beforehand, of how the Fed has failed, and is rapidly losing credibility. Which is probably why – after the Cartel’s initial, obligatory Precious Metal smash (as usual, the speech was scheduled for 10:00 AM EST – i.e. “key attack time #1), stocks, bonds, foreign currencies and PMs soared – with gold up $18/oz at the highs, and silver $0.45/oz.
However, that was decidedly NOT the Fed’s desired result, so they had a “plan B” queued up – of, I kid you not, having Vice Chairman Stanley Fischer interviewed immediately thereafter, by head television propagandist Steve Liesman of CNBC, in which he vaguely commented that “Yellen’s comments are consistent with a possible rate hike.” Not that a rate hike was likely, mind you – but in true Greenspanian Fedspeak, “possible.” And LOL, he ended the planned Precious Metal raid “interview” by claiming he’s “not too concerned about asset bubbles now.” Thank god for that, as for a second I thought record high P/E multiples and negative yielding bonds, amidst the worst economic conditions, and highest debt, of my lifetime might be considered pricey.
Thus, the record third “Cartel Herald”-led PM raid of the day, following the 9:00 AM EST capping an hour before Yellen’s speech, and the 10:00 AM raid directly thereafter – enroute to a miserable end of a miserable week of Cartel suppression, with gold ending down a dollar, and silver’s gains dwindled to less than a dime.
In other words, a perfect example of Janet Yellen’s role of the “ultimate red herring” – which in my view, only discredited her, and the Fed as a whole, further; bringing the inevitable end of said “obsession with idiocy” that much closer. Which, in my view – not to mention, David Stockman’s, who this week predicted a massive stock market crash starting around late September – is more imminent than at any time in Central banking history. Thus, I cannot emphasize enough that the time to protect yourself is now – as it won’t be long before the “doldrums of summer” are replaced by the unending, terrifying reality of a global monetary Ponzi scheme in its terminal phase.