As I mentioned in my earlier piece, there are now many “signs” that we are going terminal both globally and systemically. Economies are slowing and or contracting and yes this includes China. You can clearly see that the numbers here in the U.S. are thoroughly cooked. If you look at “private” numbers such as “miles driven” or even something as simple as carloads of garbage hauled by the freight system it is clear that we are not growing. If you look at the pricing for sea shipments and volumes you will see that international trade is contracting. You can also look at unemployment numbers, housing and food assistance numbers here in the U.S and abroad. You will get confirmation of the above, treading water at best and likely systemic contraction.
Looking at the Central Banks of the West, they are all monetizing…because they have to. They have to because there are few buyers for sovereign debt that must be sold to rollover past debt, fund current “programs” and pay interest. One might say, “But the stock market is up so everything must be OK.” Well, margin debt has never been higher than it is now, insiders are selling at a furious pace and short interest is down substantially. We will see how this works out but I highly doubt that “optimally” will be the description.
Currency markets are experiencing unprecedented volatility. How can trade work between Japan and the U.S. if their currencies are trading up or down 2% or even 3% in one trading day? In the old days, 3% was a huge move in a month’s time, now it can happen on an opening trade! And yes, as mentioned in my earlier piece, interest rates are beginning to rise. It is only a matter of time in my opinion before one nation or even an entire region has their back up against the interest rate wall. Assuming that hedge funds or even investment banks themselves don’t get blown up sooner by the derivative time bombs they are all sitting on.
Another “sign” (or should I say sign’s’ plural) that sticks out in my mind but certainly not by the mainstream press are the scandals. We’ve seen scandal after scandal in Europe, a scandal with the IMF’s Christine LaGarde and of course the recent 24/7 storm here in the U.S. Coincidence that all of this dirty laundry is coming out in concentrated fashion? Is there “infighting” amongst the elites because they are losing control? (Before I forget, there has been a rash of resignations of banking CEO’s and high officials in the Middle East over the last 2-3 months, what’s up with this?)
I’d like to add one more sign to the mix and also break it down a bit for you. Zero Hedge posted this last night regarding the run on JP Morgan’s Gold vault:
They saw 28.4% of their gold get up and leave overnight. Well, not exactly correct. Yes the withdrawal was 28.4% of the total but the withdrawal was entirely from their CUSTOMER side of the vault! The customer side dropped by 217,444 ounce…only leaving 136,380 ounces of gold left. This represents OVER 61% of JP Morgan’s customer gold leaving in one day! By the way there was another 136 notices issued today which represents another 13,600 ounces or another 10% of the remaining which should leave tomorrow! Is this a run on the bank (vault) or what?
But wait, if you thought it couldn’t get any better…it does. If you look at what has so far been issued this month it amounts to 4,946 contracts, this is 494,600 ounces yet JP Morgan claims to have only 413,526 ounces in their dealer account. This means they have a negative 81,074 ounces of gold for delivery? I bring this up because so far this year I don’t believe that they have added ANY gold to their dealer account. Harvey Organ went back and checked each and every day this year and sees none, zero, not one single ounce added to the dealer side. What’s up with this? Is this a default? They also “owe” over 81,000 ounces that was to be delivered by May 31st from the customer side due to a 1,000 contract issuance, today is June 12th…am I missing something here? If I were owed a delivery by May 31st and still had not received it as of today, I would be screaming default. “Where is my Gold?” Are these not contractual obligations or are they just “kinda sorta’s?”
I bring this last bit up as just another “sign” that may or may not go hand in hand with the rest. However, if you are a fan of connecting the dots, does this not look like people want their gold and they want it now? What if you were one of the owners of part of this remaining 136,000 ounces? Would you maybe want to get your hands on it now…While they say that it’s still there?