Lately, keeping up with the exploding headlines has been as difficult as George Jetson keeping up with Astro on the treadmill. The reason, of course, is that without a question, “2008 is back, with one temporary factor.” That factor, PPT-supported stock markets, looks as close to being overwhelmed by the “unstoppable tsunami of reality” as ever; and when it does, Central banks will NOT be able to save them with new money printing schemes. Unless, of course, “reverse” is defined as hyper-inflating asset values, destroying whatever remaining fiat purchasing power – and societal trust in government – that still remains. And speaking of hubris, the PPT has now become so pervasive, even economically illiterate Congressman have started to actually condone it, publicly! My friends, if this doesn’t depict the top of an historic bubble, I don’t know what does.
In Friday’s “direst prediction of all,” we described how massive, historic industrial overcapacity caused by 44 years of money printing; financial engineering; and misguided policy, has doomed most commodities to potentially decades of low prices – hyperinflation notwithstanding. Not to mention, collapsing currencies; an historic, global depression; and the horrifying social and geopolitical ramifications of such. Well, just one trading day into 2015 – which by the way, coincides with the “Shemitah” seven-year crash cycle, which will get much press from “wave theorists” in the coming months; each of these trends has exploded upward, portending the “unspeakable horrors” we wrote of three months ago. Frankly, it’s difficult to imagine the “big one” not commencing in 2015; and if it does so NOW, we’d be equally unsurprised.
So how did 2015 start, you ask? Well, the first “top story” of perpetual MSM cheerleader Yahoo! Finance was “China December factor PMIs suggest economy cooling further, more stimulus expected.” LOL, “cooling further” is perhaps the biggest understatement of economic history, as freefall is a far better depiction of the Chinese economy. Meanwhile, with Americans still sleeping off their hangovers, yet another energy-based commodity, the Turkmenistan manta, was devalued 18% against the dollar; whilst the “Land of the Setting Sun” rang in the new year by publishing a report depicting its lowest-ever birth rate and highest ever death rate, as the “demographic hell” we wrote of 2½ years ago appears set to destroy whatever aspects of the once-great Japanese economy, if any, Abenomics inadvertently spares.
Next, the West awoke to plunging oil prices, as WTI crude nearly breached $52/bbl, enroute to its lowest close since Spring 2009. Essentially all commodities were consumed by the aforementioned deflationary vortex, with the CRB commodity index falling to within 14% of its 2008 spike lows. Equally ominously, the “dollar index” surged to 91.2, a level not seen since 2004-05, looking very much like it will explode to levels last seen at the turn of the century. And no, dollar “bullishness” is decidedly NOT due to U.S. economic strength; but conversely, fear of economic collapse – which is causing global capital to flee to the most liquid asset classes. In other words, as we deemed it four months ago, the “single most Precious Metal bullish factor imaginable.”
In fact, the deformation of capital markets caused by implied Central bank “puts,” yielding “front-running” of “QE to infinity” the world round, caused European sovereign yields to hit a new all-time low on the day’s first trading day – including, for the first time ever, negative yields on the German five-year bond. And this, as the Euro crashed below the 2012 “whatever it takes” low like a hot knife through butter, to its lowest level since 2005! Worse yet, that was before Saturday’s news that, as the Miles Franklin Blog predicted, Greece’s “anti-austerity” Syriza party intends to overtly default on the majority of Greece’s €400 billion of debt. Which is probably why Greek CDS’ are now predicting a 66% chance of this cataclysmic event; which, we might add, I long ago claimed to be my #1 “potential catalyst” of said “big one.”
In other words, the European Union – and the trillions of debts and derivatives tethered to it – could implode within months, as the “snap elections” that will likely put Syriza in power are just three weeks away. And the “fun” is just getting started, as holding my PHYSICAL gold and silver, all I could do was laugh when Mario Draghi gave a year-opening speech of the ECB’s desperation to step up QE to combat “deflation,” whilst leading German politicians spoke of how a “Grexit” from the Euro currency would be “manageable.” Yeah, “manageable” – just like the Bernanke’s May 2007 pronunciation that “the effect of the troubles in the subprime sector on the broader housing market will be limited, and we (the Federal Reserve) do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system.”
I mean, we’re just two years removed from Europe’s near implosion due to PIIGS contagion; yet, here we are, with Europe’s debt levels dramatically higher, its economy dramatically weaker, its currency plummeting, and the global economy on the verge of depression! But don’t worry, Goldman Mario will do “whatever it takes” to save the Euro – and “believe me, it will be enough.” And by the way, not only did Friday’s Euro plunge push Euro-price gold up to €992/oz, putting it within striking distance of the key €1,000/oz level the Cartel has been defending for 18 months, but gold in the Euro-pegged Franc surged to CHF1,192/oz, up a whopping 6% since “Lady Macbeth” Thomas Jordan spearheaded an historic propaganda campaign – last month – to convince the Swiss that gold was, essentially, a “barbarous relic.”
And then it was time for U.S. markets to open. Global commodity and currency markets were plunging; the aforementioned “Grexit” crisis in full bloom; and nary a shred of positive news was to be seen. Yet, those darn “Dow Jones Propaganda Average” futures were higher, and the Fed was staunchly defending the 10-year Treasury yield at the 2.2% level we pegged 2½ months ago as its last gasp “line in the sand” against universal realization of the “most damning proof yet of QE failure.” Gold, of course, was stopped by a typical “Sunday Night Sentiment” algorithm – despite it not being a Sunday; followed by typical “2:15 AM” and COMEX opening raids, to start the year off “in style.”
Backing up a bit, I read an article this weekend by financial journalism’s most enigmatic figure, the UK Telegraph’s Ambrose Evans-Pritchard – who over the years, has combined some of the sector’s keenest insights with some of it the most idiotic drivel imaginable. To wit, this quote from his latest article, the “year of dollar danger to the world”…
“America’s closed economy can handle a surging dollar and a fresh cycle of rising interest rates. Large parts of the world cannot. That in a nutshell is the story of 2015.
Tightening by the US Federal Reserve will have turbo-charged effects on a global financial system addicted to zero rates and dollar liquidity.”
Agreed, as I have long maintained a surging dollar would destroy the world – and frankly, is doing so as I write. However, maintaining the fallacy of mythical tightening from a “patient” Fed at some ambiguous “considerable time” in the future demonstrates a total dissociation with economic reality. Moreover, claiming America’s economy is “closed” is even more ridiculous; let alone, that the holder of history’s largest debt edifice, exploding higher as we speak (like the record $100 billion added on 2014’s last day alone), can sustain a “fresh cycle of rising interest rates!” I mean geez, America has the world’s largest trade deficit, highest debts, and most overvalued currency in global history. Not to mention, its economy is in freefall, its geopolitical position has never been more threatened, and its only job-producing industry of the past decade – shale oil – is collapsing.
Anyhow, once “trading” opened at the world’s most impervious, closed economy, the horrifying economic data parade commenced anew; and frankly, how anyone doesn’t realize the U.S. is plunging toward depression is beyond us. The PMI Manufacturing Index declined, the Chicago PMI plunged, and construction spending “unexpectedly” declined; after which, the 10-year yield plummeted to 2.10%, closing at 2.12%, near its lowest level since the Fed’s “tapering” propaganda scheme commenced nearly two years ago. By day’s end, oil and commodities were at their low tick of the past five years; the dollar at its high tick; and gold and silver higher, albeit capped by prototypical “Cartel Herald” algorithms at the time-honored “cap of last resort” at EXACTLY 12:00 PM, at the Cartel’s three-month “line in the sand” at $1,200/oz, whilst China announced another staggering week of physical gold imports. Conversely, despite the vast array of global doom and gloom, the PPT goosed the Dow Jones Propaganda Average to a token 10 point, year-opening gain via prototypical “dead ringer” algorithm – “hail mary” rally and all.
Yes, this is how 2015 started; and in our view, the trends of the year’s opening days will go parabolic in the not-too-distant future; perhaps, a LOT sooner than most can imagine. Which is why now, more than ever, the ownership of real money – trading well below the cost of production – is imperative. And when we say real money, we are talking about the only assets to proven themselves throughout history; and certainly not, by the way, new-fangled “digital currencies like Bitcoin – which started 2015 by plunging 13%, to its lowest level since last February’s Mt. Gox spike lows.
Thus, we implore you to consider such protection whilst you still can. And if you do, as always, we humbly ask you to give Miles Franklin a call at 800-822-8080, and “give us a chance” to earn your business. We’re starting our 26th year of business, and hope to spend it protecting clients from the financial inevitability which just may be morphing to a financial imminence.
PROTECT YOURSELF, and do it NOW!
Call Miles Franklin at 800-822-8080, and talk to one of our brokers. Through industry-leading customer service and competitive pricing, we aim to EARN your business.