It’s Tuesday morning, and the inevitable “end game” we’ve long written of – of a loss of confidence in the purveyors of history’s largest fiat Ponzi scheme – has never been nearer. Yesterday’s horrific financial market action – in which, relentless Cartel pressure notwithstanding, gold was nearly the only asset in positive territory, was but a taste of what’s coming. Shades of 2008 were clearly in the air – with financial “depth charges” launched from ports as far-reaching as China; Puerto Rico; and of course, Greece. Aside from “triple-A” sovereign bonds like those of Germany and the U.S. – and gold, of course – every other market was annihilated; from equities, to “lesser” sovereign bonds and commodities.
That said, watching the trapped rats that are today’s “powers that be” deploy their market manipulating algorithms, derivatives, and other “weapons of mass financial destruction” to “save” the markets was truly a sight to see – with a blatancy so pronounced, even the most inexperienced market watcher would have difficulty missing them. Sure enough, barely 12 hours later, the “rumor mill” of a “potential Greek deal” was churned, featuring speculation that Jean-Claude Juncker – the criminal President of the European Union, whose ominous comment that “we all win or we all lose” inspired yesterday’s must hear Audioblog – offered a “last second offer” to Greece; essentially, begging them to borrow more money under usurious terms, to “save our Ponzi scheme – please!”
Frankly, I expected a bit more from the supposedly most powerful people on the planet, who are well aware that the upcoming Greek default and Eurozone exit will likely commence a chain reaction of similar actions, yielding a collapse of faith in the European Central Bank . Which is why it was so comical that said rumor was squelched within one hour, when Greek Finance Minister Varoufakis unequivocally stated that Greece would default on its €1.8 billion interest payment to the IMF at midnight tonight. Which, it turns out, is also the terminus of 2012’s “bailout #2” – which clearly, will not be renewed, rendering Sunday’s proposed bailout referendum moot.
In other words, the end game for Greece will commence tonight, which is why it is painfully obvious how hard said “powers that be” are working to “calm” markets. To wit, as I write, the pathetic “last ditch” efforts keep coming, “fast and furious” – with German Finance Minister Schaeuble stating it’s possible for Greece to default on its debt, yet stay in the Euro. I mean, just how ridiculous can this get; as, with Europe refusing to bail Greece out, and Greece loathe to accept such funds irrespective – he is claiming Greece could still be bailed out. And again, the “no” vote he refers to below, is that of said referendum, theoretically to be held this Sunday. Which, given there is no bailout proposal on the table – with Juncker’s “last second” offer having been refused before the ink dried – has no reason to occur in the first place!
*SCHAEUBLE SAID TO SEE GREECE STAYING IN EURO EVEN IF ‘NO’ VOTE
*SCHAEUBLE SAID TO SAY GREECE MAY BE ABLE TO TAP EU SUPPORT FUND
Regarding “markets,” the blatancy of such interventions reminds me of the relentless “rumors” and “countertrend moves” that occurred in stocks like Bear Stearns, Fannie Mae, and Lehman Brothers in their final days. Let alone, when accompanied by overt threats to expand said manipulation – such as ECB Board Member Benoit Coeur’s claim this morning that Draghi is “ready to use new instruments within its mandate” if necessary. You know, “whatever it takes” – no matter how destructive such unprecedented actions may be. In the words of Jim Sinclair…
“The world is not going to end. It already has, and you have not noticed. They will never learn, but why should they? These institutions are gambling with your money, not theirs. They win and they whack it up between themselves. They go wrong you lose in the trillions. There is a potential for an uncontrolled nuclear financial reaction in this outrageous form of greed driven madness. No longer does the Edison and Tesla of the world seek to invent a better world, just a better way to beat the markets using universal energy of the leverage in OTC derivatives via super computers. This is going misfire very badly. Each generation is crazier than its predecessor in their greed and penchant for money and power. The builders of real businesses are frowned upon. Our financial kids are downright dangerous. They seek not to better the world but to destroy all that is good in it for personal profit. The only invention welcome is one that means more paper profit. They have no limits on their desires. They cannot be satisfied by any amount. Their battle cry is ‘More at any Cost.’ They will cause a chain reaction financial dark energy that cannot be stopped by any central bank or all central banks together. Maybe we are going into a Super Financial Nova followed by a permanent Economic Black Hole where prosperity once existed? Maybe the rebellious IMF knows this.”
I am reminded of my favorite movie analogy, when trying to describe the Ponzi scheme Central banks have built the world round – by first printing money to the point that the entire world is saturated by debt, and addicted to zero interest rates; and next, manipulating markets by buying stocks and bonds, for instance, and naked shorting Precious Metals. To wit, in Fargo, what started out as a small problem – in that case, Jerry Lundegaard a bit short on cash – ended in essentially every main character, and several innocent bystanders – either dead or in jail. Likewise, the inevitable recession following the 2000-02 tech-wreck could easily have come and gone if the Central banks had left well enough alone. But instead, they compounded the problem a thousand-fold by taking interest rates to zero, monetizing everything in sight, covertly supporting stocks, suppressing Precious Metals, and giving the impression they were not only all-knowing, but willing to do “whatever it takes” to maintain a “new normal” in which recessions and bear markets don’t exist.
Well guess what, they do. Just ask the 90%+ of the world whose currencies have plummeted since the Federal Reserve starting exporting inflation en masse in mid-2011 – care of ZIRP, “Operation Twist”; QE3, and incalculable “off balance sheet operations” like the long-standing “swap agreement” it has with European banks, in which it supplies them free, freshly printed capital – but doesn’t report it, by classifying such transactions not as “loans,” but “swaps.” Or the countless thousands of businesses destroyed not just by the treacherous currency volatility caused by reckless Central bank actions – i.e, the “single most precious metal bullish factor imaginable“; but the 2008-like collapse of the world’s largest, most important business – commodities sales. Consequently, nearly all nations are in deep recessions – even if some governments fudge economic data more than others – with no place to go but down, given the massive, irreversible “deformations” said “Fargo-like” interventions have caused.
To wit, in February’s “supply response” I discussed the severe “manipulation dichotomy” of Precious Metals relative to other commodities – with the latter having been so artificially depressed, for so long, the upcoming supply response will be unprecedented. At least, on the upside – as conversely, the downside of the dozens of commodities artificially (if not inadvertently) supported by Central bank money printing, is nearly unprecedented. This is why, despite the so-called “recovery” propagandized by the Fed, the CRB Commodity Index appears likely to not only take out its 2009 spike bottom low in short order, but challenge lows going back to mid-1970s – when the gold standard was still visible in the rear view mirror, and global debt levels close to ZERO.
Just in the past 24 hours, the blatancy of such interventions has been as astonishing as their sheer size – as in Switzerland, China, and of course the U.S., where the PPT managed to close the “Dow Jones Propaganda Average” exactly 1.95% lower (can’t go below 2%, can we?), whilst all other global equity markets fell at least 3%. But nowhere more so than Precious Metals, which since their opening surge on Sunday was met by the 104th “Sunday Night Sentiment” raid of the past 106 weeks, the Cartel has maniacally, relentlessly “capped and attacked” – using the same algorithms we have observed for the past decade-plus.
To wit, COMEX silver open interest has now hit an all-time high level – which in any other market, would be indicative of soaring prices. But not silver, where such interest is due to naked shorting by “commercials” with no actual “commercial” interest in silver trading; as the massive open interest dwarfs the amount of actually silver outstanding – not just in COMEX inventories, but the world. This is the “giant pink elephant” Chris Powell of GATA wrote of yesterday afternoon; supplemented by last night’s blockbuster news that JP Morgan and Citigroup’s “commodity derivatives” exposure exploded during the first quarter – for contracts with less than one year until maturity, $300 billion to $4 trillion!
Moreover, the Office of the Comptroller of the Currency’s quarterly derivatives report – where such information emanated – revealed the category of “gold derivatives” was unceremoniously deleted; now, combined with foreign exchange derivatives so as to hide their size. In other words, as Chris Powell wrote in a follow-up article, the U.S. government is so fearful of the ongoing commodity market carnage (does the “oil PPT” ring a bell?), they have essentially commandeered them as well – and particularly Precious Metals like silver, whose tiny market size makes it especially prone to acting in an “unfavorable” upside manner.
It will, of course, in due time. And already this month we have not only seen a surge in U.S. Mint silver sales, but significantly higher “junk silver” prices whilst paper prices have been relentlessly suppressed. As for gold, “record demand” doesn’t appropriately describe the ongoing frenzy in China, Germany, and countless other nations where collapsing currencies, economies, and Central banking confidence are causing physical sales to hover at, or above, previous highs.
Again, all such machinations – illegal, unethical, and immoral – have been enacted in the name of “saving” history’s largest fiat Ponzi scheme. Or, at least, to preserve it as long as possible, to benefit the “1%” at the top of the financial food chain. However, the Greek implosion – which officially begins at 12:01 AM tonight – demonstrates how said scheme has finally hit the brick wall “Economic Mother Nature” erected. And thus, it’s just a matter of time before the “dominoes” start falling – far larger than Greece, and far more reaching in their horrific ramifications. Except, of course, in “safe haven” assets with the ability to not only withstand the traumatic political, economic, and social forces that must inevitably arrive, but thrive within them. Fortunately for you, they are still available – at prices, no less, well below not only the industry’s marginal cost of production, but its long-term cost of sustainability.
Investing in silver and gold is akin to being “dead right”. By the time the physical markets turn we’ll all be dead broke. Dent’s predictions of sub $5 silver and sub $300 gold appears to be coming. Does the government allow us to write off our losses against our taxes?
Don’t get caught in the Dent hype, as he seeks, as always, to exploit the current market trend by praying on your fear and greed. This the same man who forecast Dow 41,000 and NASDAQ 20,000 in 1999 – to be reached by, get this, 2008. Topped only by his April 2011 prediction that the Dow would fall to 3,000 by 2014.
And as for $300 gold, I’d venture that more than half of global production would be shut in at $1,000/oz, and ALL of it below $500/oz – and this, in a world of collapsing inventories and record high demand. In silver, prices are even further below the cost of production today. At $15, I expect massive bankruptcies. Below $5 (especially if Dent’s “deflation” comes to fruition, destroying base metal prices), there won’t be ANY silver production in the world. And this, with FAR LOWER inventories than gold, as well as record demand.
Maybe James should take his paper losses in a “sale” of PM’s, and then VERY QUICKLY, buy them back- hopefully before the market changes direction on him. It’s certainly legal, and I actually like the irony of “paper losses” yielding REAL tax dollar savings, don’t you?
P.S. I’ll bet James doesn’t even OWN any physical PM’s in his hands.
I sympathized with James, I have been hoarding gold and silver, but so far I’ve been under, at least with silver I have a floor of $5, I buy only silver Maple coins, the latter is legal tender of $5 here in Canada.
You and Bill Holter’s arguments are logical to me, unfortunately I cannot share any of it with friends or work colleagues, I’m litterally a laughing stock to them (especially when I mentionned PM price as been manipulated).
It’s not easy going against “current”, unfortunately the “market” can be wrong for a longer time than you can be solvent! what is discouraging to me is on one hand when there’s good news (very few if you ask) PM goes down and when you have bad news (lots of it) the cartel push the price lower by shorting paper on comex (Globex), there intervention is so blatant to see!
One would think as you mentionned that the cartel won’t push prices so low for a long time as to wipe out completely the PM offer side, but if (when) they are push to the brink, I would not be surprise of relentless attacks (even worst than past 2 years).
Kudos to you for having the courage to say out loud about what is coming, but from personal experience you will not win a popularity contest that’s for sure.
Thanks Daniel. And as for your friends and colleagues, here’s what I wrote on that topic three years ago…
I recall a Dent ad on Kitco proclaiming that the gold price would be $700 by the end of 2013. The ad reappeared with the same prediction next year and nothing changed except the date (2014). He didn’t miss by much on his predictions, only around $500 an ounce or so.
Decorum prevents me to adding anything more here.
Maybe this is coming from the fact that the PM’s are down, and I own them, and they both should be decidedly up, but I have a semi-insignificant request/comment concerning your writing style. I’ve read you for at least two years and at one point the “To wit’s” and the use of “whilst” was quaint and idiosyncratic. It did always cause a little intrusion, distracting the mind from your main message, a bump in the road, so to speak. But now, because so many sheeple in the PM blogosphere are using them it’s simply annoying. How about expanding your vocabulary – at least at times – and use the plain old “while” and maybe “Clearly…” or “Therefore….”, etc. At this point you would be breaking new ground whilst your brethren are stuck in their copycat routine. Best regards, Stephen
That said, I’m doing my best to please all (tens of thousands now), and it’s not easy. But I think I’m doing quite well, irrespective.
Thanks to the Cartel, I have not taken a day off in close to three years. I am very tired, and broad grammar changes not atop my list of priorities.
It would be interesting to know who is behind a well financed YES campaign currently deluging Greek television to try and turn the tide for the upcoming referendum (Scotland seceding anyone?). Those on social welfare such as pensioners and so on are likely to be swayed by such arguments now that the ATMs are running low. The younger side of the population seem to appreciate the futility of EU subservience however. Looks like it will be close run. Also; to those guys sweating their gold positions, just imagine that your in Greece at the moment and holding gold. You probably wouldnt be anywhere near as worried as the rest of the population who doesnt have gold whatever happens after the referendum.
It won’t have even close to the influence of the Swiss and Scottish (UK) propaganda campaigns, which could threaten a “falling economy” and “plunging stock market.” Both have already occurred in Greece, an the reason Syriza was voted in – five months ago – was to end the idiocy. Plus, Tsipras went on national television YESTERDAY to beg people to say “no” – and Yaroufakis this morning said he’s rather “cut off his arm” than vote “yes.”
Anybody know of anyone who has cashed out their insurance policies because they’ve not collected on them yet? And premiums keep going lower, just like “you know what”! I think we all need to remember what PM’s are and why we buy them.
Following presentation by China Gold Association was posted at LBMA website in London on June 25.
In it, on Page 2 Mr. Zhang Bingnan nonchalantly states that at the end of 2014 China’s gold reserves were 9816.03 tons.
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Since 2009, Chinese gold reserves keep increasing. Successfully breakthrough 7000 ton, 8000 ton, 9000 ton. Till the end of 2014, the gold reserves reach 9816.03 ton, the world’s second.
Wow, it does indeed say that! I’ll have to circulate it.
Thanks, I hope it gets more publicity. Following 2 links give a background on who this Zhang Bingnan is. Apparently, he’s one deep within the Chinese physical gold market insiders. Granted, the “China Gold Association” statement is not an official one like PBOC or Chinese govt. But Mr. Bingnan is not exactly an idiot & there is no way he would prepare such powerpoint without backing of Chinese government.
Zhang Bingnan 张炳南
Vice president of the China Gold Association and a well-known expert of the precious metal’s industry.
As Vice President of the organization responsible for bridging the gap between the government and gold producers he spearheads many organizations that look to facilitate gold ownership.
A vocal critic of those who denounce the role gold has to play in an economy and has previously issued five articles looking at gold’s part in history, all of which were widely published on the international stage.
Thanks, but it turns out this is reserves “in the ground,” not official gov’t reserves.
Andy- You are EXACTLY why we need you as a watchdog on this stuff. Everything is couched in deception, and in this case, I believe it’s to make us think gold reserves in China are LOWER than we might otherwise conclude.
As my friend from China used to say, ” Crevel peeper, doz’ Chinese!”
Thanks, but in this case I don’t think it was intended to be a deception.