There’s a good reason I spent the entirety of yesterday’s article discussing the blatancy of the past week’s market rigging’s; as clearly, TPTB are hell bent on “reversing” the ugliest annual start of currency, commodity, and equity trading in global history – no matter that the very same issues that catalyzed it, have decidedly intensified. To wit, in yesterday’s “very, very last to go,” I espoused that, aside from the same, prototypical gold and silver price suppression algorithms we have observed for years…
“On a day when everything else plunged – from equities; to commodities, currencies, and economic data – the “Dow Jones Propaganda Average” was simply NOT ALLOWED to decline. Notice the seven “DLITR,” or “don’t let it turn red” supports at Friday’s close, before it final succumbed to red ink around 1:00 PM. Followed by an immediate “hail mary” rally to push it back to unchanged. Which, when that also failed (as oil plunged to the day’s lows), the PPT orchestrated a second, far more egregious “hail mary” – in which the Dow surged 200 points in less than 30 minutes time.”
Well, I could just as well have written the same of yesterday’s manipulations – again, on a day when oil plunged (below $30/bbl at one point); as Treasury yields plunged, and not a shred of positive news was to be found. I mean, take a look at yesterday’s Dow and gold “trading,” compared to Monday’s, if you had even the slightest doubt of what I’ve been writing of – and quantitative proving – for the past decade…
These patterns – such as the Dow “dead ringer”; and “key Cartel attack times” like 2:15 AM EST, 8:20 AM EST, 10:00 AM EST, and 12:00 PM EST – have become as ubiquitous as snow during winter. And yet, essentially no one seems interested, or motivated enough, to discuss them. Except, of course, the handful of TRUTH seekers who, with each passing day, are becoming more and more popular. Such as, for example, John Hathaway, whose brilliant article yesterday, “Paper Gold – Utopia for Analysts,” described exactly what’s going on, and exactly why it will fail.
To that end, this morning has again started with the ubiquitous, middle-of-the-night stock surge that has accounted for all the Dow’s gains over the past decade, despite yet another massive energy inventory build; nary a blip higher in the CRB Commodity Index; and oh yeah, another Chinese stock market decline – this time, 2.4%, to within earshot of August’s lows.
Of course, the POTUS gave his – thankfully, final – “State of the Union” address last night; which, like Fed meetings, are, without exception, “key attack events” for the Cartel, and “key support events” for the PPT. Not that he said anything material, other than attempting to put “lipstick on the pig” his Presidency has been – like pretending the economy has “recovered,” when quantitatively speaking, 93% of America’s 3,100 counties are worse off than when he took the oath of office. And for the coup de grace, in a statement that millions of dollars’ worth of taxpayer-funded personnel likely pored over for weeks, he warned that we shouldn’t “fear the future.”
Which sounds great on paper – certainly for the “1%” he’ll undoubtedly join on the “retired President’s tour.” Unless, of course, the annihilation of your financial future is already cast in stone – as is the case for the vast majority of Americans, who have no jobs, certainly not of the “breadwinner” variety, and/or no savings. And certainly for the global commodities industry – which even Obama knows is the world’s largest revenue producer, and largest source of debt. Which, care of his unwavering support of hyper-inflationary fiscal policy – and appointment of Janet Yellen to do the same in the monetary world – has ballooned to its highest level in history.
In last January’s “direst prediction of all,” I laid out why the world will be awash in commodities – and essentially all forms of industrial infrastructure – for years, if not decades to come. The driving force behind my views – that years of hyperinflationary monetary policy and Wall Street financial engineering are the primary source of the world’s ills – was David Stockman’s “Great Deformation” thesis; which he brilliantly reprised yesterday. In the ensuing 12 months, the global economy has truly imploded – with the CRB Index down nearly 35%; the Baltic Dry Index at an all-time low; and essentially all measures of trade, and trade finance, in historically dangerous places. To that end, the average currency has plunged to, or below, its previous all-time low; and the economic outlook is imploding – as highlighted by last night’s report by S&P, opining that the corporate credit outlook is its worst since the 2008-09 crisis. Heck, even energy demand is declining – an extremely rare event, which has only occurred once in the past three decades. Yep, you guessed it, in 2008.
In other words, the energy industry is toast; and shortly, may be reduced to mere embers. To that end, If Jimmy Carter had given a speech like Obama’s back in 1980, warning energy industry CEO’s to “embrace the future,” it would have been one of the most infamous in U.S. history – as directly afterwards, the energy industry went into a vicious 15-year bear market, that was just ending when I became a Wall Street oilfield equipment, services, and drilling analyst in 1996.
Only this time, global oversupply is vastly worse; with record inventories, falling demand, and the imminent onset of vast Iranian production increases. Moreover, with all major producers – sovereign and corporate alike – in dire financial straits, there’s no chance that anyone will take their foot off the proverbial “gas pedal” (no pun intended), as they desperately attempt to pay their (unpayable) bills. In other words, the wave of energy-related – or for that matter, commodity-related – bankruptcies that has already commenced will likely be far larger, broader, and destructive than the 2007 “subprime” mortgage crisis. Which, I might add, occurred in a world with vastly lower debt; and Central banks that still had “ammunition” to “kick the can”; i.e, the historic levels of money printing that have put today’s economy on the brink of Armageddon.
Thus, if Wolfe Research is correct, that fully one-third of the entire global energy industry is at risk of default within the next 12-18 months, there’s NO WAY the world will be able to avoid a near-term crisis far worse than 2008. To wit, the 134 publicly-traded oil and gas companies in the U.S. and Canada alone have seen their debt burdens balloon from $190 billion in 2010 – yes, just five years ago – to $353 billion today. And that’s just a tiny subset of the world’s energy industry. Let alone, the dozens of sovereign nations that have built up trillions of energy-related debts!
So yes, my friends, we are flying headlong into the economic “storm of the century” – which, in my view, has already started. Thus, if you want to bet against the power of an F-5 economic tornado; against Central banks’ time-tested response of hyperinflationary monetary policy; and against thousands of years of human experience, in which only Precious Metals have survived such episodes, be my guest. To the contrary, if you decided that “Economic Mother Nature” will inevitably “win” – as she always does – Miles Franklin would be honored to help you “bet” on her.