All weekend, I’ve been debating what to focus on this morning, given all that is “competing” for my attention. After all, it’s difficult to ignore what I view as the “peak fake” environment of financial market history – as evidenced by the VIX volatility index; itself, a major PPT manipulation target; trading below 11 for a record 15 straight days. FYI, the previous record was just 10, way back in 2006.
This, amidst arguably the worst global political and economic environment of our lifetimes. Which, even according to Wall Street’s rose-colored commentary, is rapidly approaching crisis levels. Here in the United States of Fake Everything, barely positive first quarter GDP “growth” is in danger of imminently turning negative – whilst everything from retail sales, to industrial production and auto/student/credit card defaults are screaming recession; whilst overseas, the story is no different, as evidenced by last night’s across-the-board Chinese economic data “misses,” despite being issued by data cookers that make the U.S. Bureau of Labor Statistics appear honest.
You know, the people who claimed 211,000 U.S. “jobs” were created in April by adding 255,000 phantom “birth/death” model jobs; and instead of using the last two years’ “seasonal adjustment factors” – both of which, would have produced a negative April jobs number; simply fabricated a new one, to produce 211,000. Most of which, were part-time, minimum wage paying jobs in sectors like, say, restaurants. This, despite the weakest restaurant performance since…wait for it…2009!
Meanwhile, equity valuation metrics have unquestionably reached “dotcom valuations in a Great Depression Era” – as evidenced by the S&P 500’s price/sales ratio on the verge of taking out the late 1999 peak, whilst macroeconomic indicators in the real economic world are crashing (like the Empire State Manufacturing Index, which just “unexpectedly” plunged from +5.2 to -1.0). For that matter, does anyone even remember the (fraudulent from Day One) “Trump-flation” meme that was supposed to explain why stocks surged after the Election? Heck, at this point, it’s more likely Trump doesn’t make it through four years in office; let alone, to “make America great again” any time soon. And no, that’s not a criticism of Trump, but of the Dysfunctional States of American in general.
Of course, even today’s fake valuations; of a fake economy; in which the fraud, and resulting speculative excess, can be seen everywhere – from Virginia, to California, Florida, and Canada (seriously, click on these links); are, plain and simple, Houses of Cards sitting atop foundations of Quicksand. I mean, since the dotcom bubble – at-the-time, the biggest financial bubble in history – Central banks have fabricated tens of trillions of “currency units” out of thin air; to the point that, the three largest Central banks alone have cumulatively added $13 trillion to their balance sheet. Meanwhile, global debt has essentially doubled – much of it, by sub-prime issuers with not a chance of paying it back. Let alone, if the U.S. dollar much of it is denominated in continues to rise, as it always does during financial crises.
Meanwhile, the gargantuan industrial oversupply caused by decades of money printing, financial engineering, and predatory lending will be with us for years to come; which is why this weekend’s “agreement” between Saudi Arabia and Russia to extend oil production cuts another nine months is so laughable. I mean, not only did the first five months fail to even modestly alleviate the historic, worldwide glut – in large part, because demand continues to fall – but half of the participating nations (which all must agree to the latest Saudi/Russian “deal”) were cheating, with many outwardly trumpeting their plans to expand production in the immediate future.
As for demand, do yourself a favor and read this fantastic article from one of the brightest new minds in the alternative blogosphere, Chris Hamilton; in which, per below, you’ll realize exactly what I’ve long warned of regarding the world’s historically ugly demographic trends. In a nutshell, ZERO population growth, plus EXPONENTIAL debt growth, plus HISTORIC industrial overcapacity, plus DRAMATIC technology changes. equals MASSIVE debt defaults and employment; and oh yeah, UNPRECEDENTED money printing and currency destruction.
As for Precious Metals, the day-to-day price suppression’s continue unabated – per the charts below of Thursday’s and Friday’s gold “trading”; in both cases, mysteriously “Cartel Heralding” at exactly the global physical market trading close of 10:00 AM EST. To that end, the great folks at GATA uncovered yet another damning piece of evidence against anyone purporting a “gold Cartel” doesn’t exist. This one, dating back to 1974; i.e., when the COMEX was created with the sole purpose of suppressing PM prices.
That said, the trend is clearly up anew; particularly in silver, as evidenced by this morning’s $0.30/oz surge – which shouldn’t surprise anyone, given not just last week’s confirmation that global production declined in 2016 for the first time in 14 years, but Friday afternoon’s “Commitment of Traders” COMEX report. Which, following last weeks’ near record “commercial” short covering – of 21,515 contracts; was followed by an additional covering of 17,305 shorts this week. In other words, nearly 40% of the “commercials”’ record short position has been covered in the past three weeks alone; which in my very strong view, was created solely to reduce expectations of a “BrExit times 100” Marine Le Pen victory. And yet, even at silver’s low, it still didn’t get below $16/oz. Heck, as I write, not only is silver barely a dollar from re-capturing its 200-week moving average of $17.88/oz, but gold – at $1,235/oz as I write, is just $4/oz from its own 200-week moving average, of $1,239/oz.
Back to today’s commentary, I had considered focusing on the fact that this week not only represents my 15-year anniversary in the Precious Metals sector – from that fateful day in May 2002, when I purchased by first 100 shares of Newmont Mining stock – but my 10-year anniversary of moving to Colorado. Not to mention, 5½ years at Miles Franklin; and oh yeah, my upcoming 15th wedding anniversary. But perhaps I’ll hold off, as there’s simply too much to say – and reminisce about – those topics, given all that’s changed since. However, the one thing that has consistently changed over that time, has been the exponential growth in fraud, deception, lies, propaganda, and criminality, from essentially all levels of authority. Be it Wall Street, Washington, or the Mainstream Media – in the States, or their overseas proxies – the efforts to artificially prolong history’s largest, most destructive fiat Ponzi scheme have been unprecedented. In total, reeking massive political, economic, social, and monetary destruction on “the 99%” and their descendants, for the short-term benefit of the very, very few.
Fortunately, “Economic Mother Nature” never loses – and per the reams of evidence noted above, she is clearly gaining momentum in a war she will inevitably, decisively “win.” Much of the world has declared her victorious already – particularly, the second and third worlds that are less susceptible to the short-term panaceas of money printing, market manipulation, and propaganda. And yet, to date, no one has put this inevitability into perspective than, of all people, the most brilliant commentator in the crypto-currency blogosphere, Andreas Antonopoulos.
His latest MUST LISTEN podcast, “fake news, fake money” – which I assure you, will be 26 minutes well spent. In it, he describes the socio-economic forces that created “fake news” – and how, in rapid fashion, said “99%” are rapidly becoming wise to it. To that matter, my comment, no person has contributed so forcefully to this realization than Donald Trump; and consequently, when all is said and done, the world owes him a major debt of gratitude, no matter what his motives for bringing it to light were.
Back to Andreas, he then points out how the same forces that have helped the world start to see through the “fake news” are leading it down the path of realization regarding the “fake money” that has destroyed our lives; and consequently, how it must be replaced if humanity is to be saved. And while his focus is on crypto-currency – specifically, Bitcoin – he speaks in general terms of the ongoing, soon-to-be-accelerating flight from “fake money” into real stores of value; one of them being, as he specifically cites several times – physical gold. In fact, Satoshi Nakamoto’s 2009 “white paper” specifically cites the fact that Bitcoin’s “inflationary” schedule; and increased “mining difficulty”; was specifically based on gold, given his goal of creating a digital currency that could mimic gold’s store of value proposition.
To that end, as I have said countless times before, Precious Metals’ principal value are their ability to store value throughout the ages – and given the historic, systemic fiat currency crash the world is in the early stages of experiencing; let alone, the gold and silver price suppression that has allowed it to progress this far; there may never be a better Precious Metal buying opportunity in our lifetimes. As I assure you, it won’t be too far into the future, when on a worldwide basis, the realization that our “money” is as fake as our “news,” will be as universal as it is ubiquitous.