Generally speaking, I spend the entire day, seven days a week, compiling articles from countless websites – starting with my “keystone” Zero Hedge – in search of topics to discuss. And nearly every day, the subject of the next morning’s article (or podcast) “hits me” the evening before.
Today is the rare day when many topics are “vying” for lead status – not the least of which, is the fact that as I write, the ECB just announced an expansion of its suicidal QE program not just to September, as widely anticipated, but December (“or beyond, if necessary; and in any case, until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim”). Even if, LOL, they clumsily attempted to “hide” the hyper-inflationary implications by “tapering” from the current level of €80 billion per month (starting in April), to “just” the original level – from March 2015, until it was raised to €80 billion in March 2016 – of €60 billion per month. In essence, committing to an additional €540 billion of QE, compared to the expectation of “just” €480 billion – which comically, the rigged financial press will spin as “hawkish,” simply because the extra €60 billion will occur a mere three months later. That said, no matter how you spin it, yesterday’s article, “2017, the year of money printing,” has been validated in spades” – by the ECB today; the Bank of Japan yesterday; and perhaps the Fed next week – events and market movements pending – when Janet Yellen sits on the “very hot seat.”
Yes, I’ll get to the reasons why I believe “silver demand is ready to explode” momentarily, but not until I cover the myriad, sundry topics with legitimate claims, in and of themselves, of said top dog status. Starting with the political nuclear bomb that went off in Italy Sunday, which may well result in an “ItaLeave” vote next year; and likely, sealed the deal for a French “FrExit” referendum shortly after the National Front’s Marine LePen is elected President this Spring. Which (not so) incredibly, the rigged betting lines are assuming will not occur, just as they gave the BrExit a nearly 90% chance of failing, and Hillary Clinton equally strong odds of winning.
The “market” reaction to the Italian referendum has been as blatantly rigged as that of the post-Trump victory, in that the Euro surged and stocks rose – particularly when it was announced that Bank Monte dei Paschi will likely be bailed out this weekend, even though the ECB charter prohibits it. And when I say stocks “rose,” I mean they have never been more “aided” by official means, overt and covert – as evidenced by the “dead ringer” I first described nearly five years ago supporting the “Dow Jones Propaganda Average” every day, whilst the gold Cartel has gone berserk suppressing every gold rally, particularly with “cap of last resort” raids at the 12:00 PM EST “key attack time” – as connoted by the below graphs of the past two days’ trading. Heck, gold was held to just a $4/oz gain yesterday, even as silver rose $0.40! In other words, whether considering the “reaction” of stocks, bonds, crude oil, or Precious Metals, don’t for a second forget that each and every tick is “influenced” by manipulation. Which although it feels as endless as it has been relentless, is destined to fail – as NOTHING unsustainable can be sustained indefinitely; particularly, in this case, when historically mis priced assets try to fight the unstoppable tsunami of “Economic Mother Nature.”
The bubble in U.S. stocks; and countless other Western financial assets -particularly sovereign bonds, the biggest (Central-bank aided) bubble of all-time; is so egregious, it long ago put the dotcom bubble to shame. To that end, consider that the reason the Russell 2000 index of small-cap stocks is “valued” in terms of Enterprise Value/EBITDA – as opposed to price/earnings or price/cash flow for larger indices like the Dow and S&P – is because the vast majority of Russell companies don’t make money, even after the third longest economic “expansion” in U.S. history (nearly eight years, if you LOL, believe the BLS’s fraudulent GDP data). So, for anyone that fears “missing out” on stocks’ current, PPT-aided explosion – according to the financial media, catalyzed by the comically flawed “Trump-flation” narrative, after it goosed stocks all Summer based on an equally ridiculous “Clinton-flation” narrative – have a gander at just how overvalued small stocks have become; let alone, in a financially catastrophic environment of surging interest rates and historic worldwide political instability. Ironically, on today’s 20th anniversary of Greenspan’s infamous “irrational exuberance” speech – which I remember well, working at a New York City hedge fund at the time.
Back to Europe, Moody’s followed up Fitch’s move yesterday in cutting its outlook on Italy from, LOL, “stable” to negative – which as we speak, sports a credit rating one notch above junk status. Which somehow, I don’t think the imminent Monte Paschi bailout – perhaps, as soon as this weekend – will help any; and given that German and French banks – like say, Deutsche Bank – are the largest holders of PIIGS debt (of which sadly, Italy’s is far from the most dangerous), it’s difficult to believe a financial crisis is not sitting directly at Europe’s door. Let alone, if rates continue to rise, given that the vast majority of Deutsche Banks’, Monte Paschis’, and essentially all Western banks’ gargantuan derivatives holdings are related to interest rate swaps.
Which can’t be helped by the fact that the Euro is perched just above its 14-year low of 1.046 dollars; which, when inevitably breached to the downside, could easily prove to be the proverbial “straw that breaks the derivatives’ back.” Which frankly, could be catalyzed by any number of potential near-term events – in Italy, France, Greece, Spain, or Portugal, to name but a few. Or heck, China, which yesterday reported another massive capital outflow in November, as speculators continue to bet on the upcoming, unprecedented Yuan devaluation I first predicted last summer – mere hours before “phase one” commenced. Which, I might add, will only add to the reasons “silver demand is ready to explode.”
Or perhaps OPEC, whose fraudulent “deal” is becoming more scrutinized each day, as evidenced by WTI crude falling below $50/bbl yesterday. To that end, the evidence of its fraud is coming hot and heavy, starting with former Saudi Oil Minister Ali Al-Naimi admitting this week that “we typically cheat” on production quotas; to Monday’s realization that OPEC’s November production was 400,000 barrels above October’s record level, from which said “production cut” was theoretically based. Moreover, the 600,000 barrel per day production cut non-OPEC participants like Russia and Mexico supposedly agreed upon has not yet been validated, subject to discussions at this upcoming weekend’s Doha meeting. And last but not least, yesterday’s catastrophic post-cash-ban PMI plunge in India – until now, the world’s fastest-growing source of crude oil demand – makes it more and more unlikely that OPEC can meaningfully reduce history’s largest crude oil glut. To that end, following said Doha meeting, it’s entirely possible that by Monday morning, oil prices could again be under intense pressure; and with them, whatever remains of OPEC’s near-dead “credibility.”
Let’s move on to today’s principal topic, of why “silver demand is ready to explode.” Not that it hasn’t already, given 2015’s all-time high demand in both the Eastern and Western world; which should tell you all you need to know about how desperate the Cartel is to suppress prices, in that 2015 ended with silver prices at a five-year low – before decidedly bottoming the day, ironically, that the Fed raised interest rates (hint, hint). This year, Western demand has been strong, but slightly lower than a year ago, if you believe data coming from the U.S. Mint – which was as strong as a year ago until July, when it “mysteriously” weakened in the aftermath of the BrExit, despite prices surging to (albeit Cartel-capped) multi-year highs!
October and November demand surged anew – as is always the case after blatant Cartel smashes; such as on October 4th, when China was closed for its “Golden Week” holiday; and November 10th, following the “post-Trump annihilation” raid. And if indeed the insane, bubblicious speculation in base metals continues based on the “Trump-flation” meme, yesterday’s “silver fundamentals versus the base metals bubble” article describes why silver must inevitably “catch up” to copper, lead, and zinc, given that roughly three-quarters of global silver production is utilized for industrial purposes.
Then there’s that little thing called “2017, the year of money printing” – which will commence with silver prices at historically low, Cartel-suppressed levels; and the potentially biggest wild card of all, INDIA. Which, if it indeed is attempting to suppress gold buying (which inevitably, will surge in the black markets), will unquestionably result in explosive silver buying by Rupee-hating, but equally government-fearing, Indians, who had already been increasing their silver purchases in recent years…
…particularly since 10-plus percent import tariffs were imposed on Precious Metals in 2013, which has a disproportionately large impact on higher absolutely-priced gold.
The reasons for silver demand to explode – amidst an environment of verified peak production, and historically low above-ground, available for sale inventories, have never, in my very strong view, been stronger. Which is why, I might add, the opportunity to make a year-end tax swap (discussed yesterday), at an historically high gold/silver ratio of 69, may make sense to many investors.
Eventually, the suppression of the dying monetary systems’ Achilles Heel, silver, must die – and when it does, the “revaluation” process will likely be unprecedented in modern financial market history.