It’s Wednesday morning and sovereign debt yields – U.S. Treasuries included – are again plumbing multi-year or in some cases all-time lows; as globally speaking, the “most damning proof yet of QE failure” couldn’t be more plain to see. In other words, from East to West, fixed income markets are anticipating “QE to Infinity” amidst the worst economic backdrop – and outlook – of our lifetimes. Part and parcel of such madness, everyone from money managers to corporate treasurers (as exemplified by record largely debt-funded stock repurchases) to sovereign wealth funds themselves are piling into stocks at record valuations, yielding an MSM mania comprising the worst imaginable aspects of 1999 and 2007 – and ironically, thanks to record margin debt, the lowest investor “net worth” ever recorded!
Unfortunately, the retail investor is largely absent this time around, having nearly lost his shirt in 2000 – and whatever else remained in 2008. Since then everything from employment, to income, to inflation has gone in the wrong direction; and thus, as markets morphed from “partly manipulated” to all-out commandeered the “game” has become entirely the province of insolvent, but infinitely government-supported TBTF banks. This is how the S&P 500 can close at a “record high” (non-inflation adjusted, of course) on one of the lowest volume days of the decade, amidst a collapsing yield curve and oh yeah, a “flash crash” event far more severe than the memorable one of May 2010. In this case, markets didn’t “crash,” but 20% more stocks were “broken” for nearly an hour, care of the all-out destruction of equity “markets” by the era of manipulative financial engineering. And what were the day’s key headlines? Collapsing Chinese business sentiment, a plunging Argentine Peso, Obama preparing to bomb Syria, failed Russia/Ukraine peace talks, the Council of Foreign Relations recommending unfettered money “helicopter drops,” and none other than JP Morgan predicting a one in three chance of the ECB announcing outright QE at next Thursday’s meeting, and one in two by year-end. And thus, in our self-appointed role of the “bearer of truthful tidings,” all we can say is this. If you think a combination of record global high-yield debt offerings at record low yields, amidst record low economic activity and record high-yield fund withdrawals is not a recipe for disaster, you are likely in for a very, very rude awakening.
In that context, let’s walk you through yesterday’s “manipulation-fest”; i.e., one of the most egregious imaginable manifestations of what we have long-written of. Clearly, the “propaganda leg” of the “evil tripod” of money printing, market manipulation and propaganda is breaking. And thus, TPTB have “doubled up” support of the other two legs – starting with the all-important 10-year Treasury yield, where the Fed is desperately attempting to avoid the aforementioned “most damning proof…” by goosing the yield each time it plunges below 2.4%. The artificial “spike” Friday was their failed attempt to fool the masses into believing Whirlybird Janet’s “Jackson Black Hole” speech was “hawkish” – and as you can see, every subsequent utilization of the “new Hail Mary trade” has failed (left chart), including yesterday afternoon’s blatant attempt (right chart).
As for PM “markets,” essentially every manipulative, suppressive tool we have ever written of was utilized to cap gold and silver’s rallies during yesterday’s COMEX options expiration day (after which, there are still more silver contracts outstanding than registered COMEX inventory). And seeing gold as I write early Wednesday morning, trading at EXACTLY its 200 DMA of $1,285, you can bet the Cartel is quite frustrated at its ongoing failure to break down the unbreakable. And that goes doubly so for the world’s most manipulated and undervalued market, silver; where at valuations well below the cost of production, the Cartel has inadvertently generated a massive extremely rare “quintuple bottom” formation – amidst record physical demand!
As for gold, take a gander below, and you can see essentially everything we have written of this past decade-plus – starting with the blatant “Cartel Herald” formation when gold’s gains reached exactly their 1.0% “daily cap” at the “2:15 AM EST” open of London “pre-market” paper trading representing its 286th such “cap and attack” of the past 312 trading days. Next, the minor “cap” at the 7:00 AM EST open of New York “pre-market” paper trading, and a second Cartel Herald – also at exactly +1.0% – at exactly the 8:20 AM EST COMEX open. And then at “key attack time #1” – i.e., the close of global physical trading at 10:00 AM EST, a waterfall decline – flimsily predicated on a comically fraudulent government “consumer confidence report, which not only contradicted economic reality and countless privately-published reports, but the myriad real reports of the week – from abysmal core durable goods orders, home prices, new home sales, and even the PMI services “diffusion index.”
In fact, the only times we have seen such divergence between the privately-published University of Michigan survey and the government-published conference board survey (the government number is always higher) were just preceding the market crashes of 1987, 2000 and 2008. But hey, let’s not let facts get in the way of a good story.
Once gold was “safely below” its 200 DMA of $1,285/oz., note the minor caps at exactly the 12:00 PM EST “cap of last resort” and the 2:00 PM EST “crybaby attack” time. Not to mention, per Friday’s “Six-Sigma Precious Metals Manipulation Proof” article the 4:00 PM NYSE close. As for silver, never have we seen anything as blatant as the past year’s daily paper raids of one of the world’s scarcest physical resources, per last year’s “irrefutable PM manipulation statistics.” In yesterday’s case, at exactly the COMEX open at exactly the key round number of $19.50/oz., with all those pre-options expiration call options still open.
Again, the reason we spend so much time focusing on market manipulation is to help you realize that what TPTB are attempting to portray is but a mirage, attempting to whitewash the terminal stage of history’s largest fiat Ponzi scheme. When it inevitably collapses – perhaps much sooner than most can imagine – the only asset class guaranteed to survive is physical precious metals; and if you don’t “have your ounces” before it occurs it will be too late to protect yourself.