This morning, the Financial Times – the UK’s more straight-laced (read: boring) version of America’s relentlessly pro-Central bank, propaganda-spewing Wall Street Journal – claimed China’s government has “abandoned large scale purposes” as a means of supporting its collapsing stock market. To which, I ask the same ‘pink elephant in the room’ question; i.e., how the hell would they know what the Chinese government is doing? I mean, it’s not like they tell us. And moreover, whatever they do report – as in the UK, the U.S., and everywhere – is a flat out lie these days. Like China, for example, in still reporting a 6.8% GDP growth, when in fact it’s massively declining. Not to mention, the fact that Central banks such as the PBOC – as a rule – execute far more “monetary policy” covertly than overtly; such as, for example, the Fed opaque overseas “swap agreements” and plain old covert Treasury and mortgage-backed bond buying.
Of course, their cumulative “footprints” are not only larger than the Sasquatch – such as last night’s 112th “Sunday Night Sentiment” PM raid of the past 115 weekends (no, that’s not a typo), and 500th “2:15 AM” EST attack of the past 572 trading days. Throw in the comical, soon-to-miserably-fail “oil PPT” attempt to rally oil with another “Saudi Arabia invaded Yemen” story Friday – despite Yemen having neither significant oil supplies nor material geopolitical allies; and the fact that similar stories earlier this year had ZERO impact on oil prices – and you can see just how desperate TPTB are to reverse temporarily delay the inevitable, all-out economic and financial collapse that, for most of the world, has already commenced.
As for imploding stock markets, said “reversal” commenced Wednesday afternoon in the U.S., when a listing PPT unleashed a “Hail Mary” algorithm for the ages – using brainwashed traders’ faith in both useless technical analysis and the “Yellen put” to generate a ridiculous 500 point rally in the day’s last four hours. And this, as the CRB Commodity Index was closing at a 40-year low.
On Thursday and Friday, said “dead count bounce” was pounced upon by traders to goose collapsed commodity prices as well – except gold and silver, of course, despite the record, exploding demand experienced at physical bullion dealers like Miles Franklin. And yet, as you can see below, the PPT was still required to “save the day” with said “Hail Mary” algorithm. You know, the very one I first described 3½ years ago.
As for China’s “abandoning large-scale equity purchases,” how about that? “Coincidentally,” the Shanghai Exchange, too, bottomed with a desperation “Hail Mary” algorithm on Thursday – i.e., the session after the Fed “saved the day” in the U.S.; followed, by nearly identical “Hail Mary” rallies Friday and today. Which, by the way, did not occur more than a handful of times in the entire 2000-2011 bull run in gold and silver – and NEVER in the past four years of historic price suppression.
Of course, now that the “seal has been broken” on history’s largest, most destructive global financial bubble – the inevitable result of history’s largest, most destructive fiat currency Ponzi scheme; the “end game” of all-out financial and economic collapse cannot be reversed. Frankly, the government-supported, but “Economic Mother Nature”-pressured markets look essentially the same as in 2008 – when the PPT orchestrated dozens of countertrend surges; sometimes disguised as technical “dead cat bounces”; and sometimes – such as with Friday’s Saudi/Yemeni news, using so-called “bullish news” as cover (as if LOL, an imminent Middle Eastern war could be considered good news). And of course, the inverse in Precious Metal markets, where all increases are countered by either “technical resistance” – coincidentally, always in the form of the “Cartel Herald” algorithm, always at the same times of day; or orchestrated “PM-bearish news” – which they have to work quite hard with their MSM “partners” to spin, as I haven’t seen an actual PM-bearish news story in years.
And here we are Monday morning, one day before the dreaded month of September begins, with the S&P 500 having just completed its first “death cross” – i.e., its 50 DMA crossing below its 200 DMA –since the Fed, PPT, and all global Central banks reached their cumulative “point of no return” in mid-2011, going “all-in” with unprecedented, relentless market manipulation – to support “favored” markets like stocks and bonds, and suppress “unfavored” ones like Precious Metals. European stocks are down; U.S. stocks are down; and commodities, too, are giving back the aforementioned, ill-begotten “dead cat” gains.
The world round, economic data is worse than at any time in our cumulative lifetimes; with Brazil officially entering recession; Chinese GDP estimates slashed; emerging market currencies freefalling anew; National Bank of Greece stock trading at an all-time low – quite obviously, assuming an imminent Greek default; and oh yeah, a miserable U.S. economic outlook – as the Atlanta Fed’s “GDP now” tracking program just reduced its 3Q GDP growth estimate from an already miserable 1.4% to a recession-bordering 1.2%. Of course, if real numbers were used, GDP data would depict a non-stop recession for the past seven years. In a nutshell, global trade is collapsing at its most rapid rate since the 2008 financial crisis, destroying every aspect of an historically overleveraged world – from municipalities; to oil producers; automakers, and farmers.
Which is why it’s so incredible that the Atlas Shrugged-inspired “evil tripod” of Washington, Wall Street, and the MSM are still discussing the Fed’s upcoming September 17th meeting – as if 1) the Fed is actually considering raising rates, amidst an historic collapse of economic data; stocks, currencies, and commodities; and 2) a paltry one-quarter point hike, if it were to miraculously occur, would have a material impact on anything, other than to reduce economic expectations and financial asset valuations further. Furthermore, now that we know the Chinese are aggressively selling U.S. Treasuries to fund their own financial crisis – and currency devaluation – such a “reverse QE” operation is doing the Fed’s “job for it,” by keeping rates from collapsing just like everything else. That said, the fact that despite China having sold well above $100 billion of Treasuries in recent weeks, the benchmark 10-year yield of 2.15% remains right in the middle of its year-long trading range of 1.80% to 2.50%, demonstrates just how fearful the rest of the world is, and just how powerful their cumulative belief that QE4 is inevitable.
Sure, said “evil tripod” is doing its best to combine all aspects of its fading “Death Star Ray” of market manipulation and propaganda – in trying to pretend Fed Vice Chairman Stanley Fischer’s weekend Jackson Hole speech gave “incremental” data regarding the Fed’s intentions – by claiming him to be “more dovish than expected. However, in the big picture of things, the best that even head MSM stooge CNBC could come up with this morning was scrolling “incoming data and market developments will likely determine if Fed raises rates in September” – as well as “Fischer carefully watching developments, in wake of Chinese Yuan devaluation.” In other words, not a shred of incremental information at all! Frankly, I’m in awe of the idiocy of so much discussion about a potential quarter point FOMC rate increase – which, for more reasons than I can describe in a single three-page discourse – would represent pure monetary lunacy. “Simon Black” puts it into perspective best, in mockingly musing of just how pathetically broke – and desperately in need of replacement – the current, global monetary system is, if “all our hopes and dreams come down to 0.25%.”
Of course, the reality of the situation is that the only way the Fed could ever raise rates by even a measly quarter point is if they can succeed in goosing the stock market and economic data enough to “push it through” without the aforementioned collapse of economic data and financial markets alike. For the past 2½ years, “proving” QE/ZIRP was a success by modestly raising rates has been the Fed’s sole goal; and yet, they have clearly, irrefutably, miserably failed in their quest – given the all-out collapse of every imaginable economic activity and financial market. Moreover, all that smashing paper PM prices has accomplished is exploding physical demand, as discussed on Thursday’s MUST HEAR podcast with Miles Franklin’s President and Co-Founder, Andy Schectman – particularly in silver, where supply is rapidly drying up, whilst premiums over fraudulently engineered paper prices continue to surge.
Which brings me to today’s primary topic, as I pen my final words of August. That is, the “unprecedented, universal fear” I wrote of last week – which Andy Schectman validated in spades on the aforementioned podcast – as we head into the dreaded financial markets month of September. Not that July and August were “normal” by any means; as, starting with the near “GreXit” as the summer commenced, to last week’s Yuan devaluation and accompanying financial market crash, NO ONE has been able to enjoy a quiet, rejuvenating vacation – and here at Miles Franklin, we witnessed our strongest two-month demand surge in four years.
However, now that everyone will be back at their desks, with nothing but bad news and crashing markets as far as the eye can see, fears that the inevitable may well have turned imminent will likely be overwhelming. Which is why discussions of a Fed rate increase are so comical – ironically, the week of the “Shemitah” debt jubilee prophecy; and why even chief government financial lackey Citigroup admitted that “‘data dependency’ over the next couple of weeks might really mean ‘equity market dependency.’ In other words, if the equity market drops 10%, the Fed will most likely not hike, no matter what the payrolls data is.” And by the way, how comical is it that anyone thinks this Friday’s NFP data matters – given the utterly MASSIVE layoffs that will likely result from the past month’s historic equity, commodity, and currency crashes?
As for me, I’m not “predicting” anything for September – other than that every horrific trend noted above will be vastly worse before the really, really scary month of October rolls around. Will the combined impact of what will likely be history’s largest, broadest market manipulation attempt be able to buy a bit more time, before the “unstoppable tsunami of reality” stampedes over it like the bulls of Pamplona? I don’t know, but I’ve never been more confident in the aforementioned imminence of total powers-that-be failure; particularly in the Precious Metal markets – where with each passing day, the odds of a 2008-like shortage event, in which no metal is available anywhere, at any price, increase dramatically. And when that day inevitably arrives, it will be GAME OVER for the rapidly fading confidence in fiat currencies – and the horrific, self-centered Central banks that have destroyed the world by hyper-inflating them. At which point, you will have either already protected yourself from what’s coming; or perhaps, permanently lost your ability to do so.