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TPTB are rapidly losing their game of “money-printing chicken”; as no matter how much they try to deceive the masses a “realization of reality” is rapidly encircling the globe.  To wit, artificially propped European stock markets can pretend Europe is “recovering” all they want, but yesterday’s horrific Eurozone PMI decline, and this morning’s six-month low in the widely watched German IFO survey scream otherwise.  To that end, the Fed can claim there’s “no inflation” all it wants.  However, shocking data like May’s 10% industry-wide airfare increase – i.e., the biggest jump since the dot-com heyday of 1999 – decidedly refutes their claims.  Not to mention, the Fed’s belief that “the housing market” is booming; when in fact its only strength is in $1 million-plus homes of “the 1%” receiving their free money.

Zero Hedge

Zero Hedge

And the same goes for the precious metals “bear market” which as we discussed yesterday looks very much to have ended.  The Cartel’s suicidal, “go for broke” raids of the past three years – starting with 2011’s “point of no return” attacks, and culminating with April 2013’s “Alternative Currencies Destruction” raids have left them extremely vulnerable – as record-setting Eastern demand, and an abysmal production outlook yield the very real possibility of crippling shortages in the coming years or perhaps months.

Over the past decade – specifically since the Western financial system “broke” in 2008, the Chinese and Russians have spearheaded an “Eastern monetary revolution” creating a so-called “anti-Cartel” that has consumed every ounce of dishoarded Western bullion setting the stage to rule the upcoming post-dollar era.  History’s largest precious metals buying spree won’t end until there’s nothing left to acquire; at which point, a new era of dramatically higher prices – and debauched fiat currencies – will usher in a “new world order.”

This is one of those strange “eye of the hurricane” mornings; when clearly, the “giant sucking sound” of government-supported financial markets is drowning out what used to be considered dire political and economic developments.  In other words, the disconnect between market valuations and reality has never been wider, adding an unprecedented level of risk.  The pre-2000 “tech wreck” markets were for all and intents and purposes, “freely traded”; and even the pre-2008 Financial Meltdown markets maintained a semblance of capitalistic independence.  However, in a “pre-2015” world where the Fed owns at least one-third of all Treasury bonds (not including “Belgian” holdings, of course) and 40% of all mortgage-backed bonds – and global Central banks cumulatively own nearly 50% of all public equities – there is not a single ounce of “price discovery” left in Western financial markets.  That is paper markets like stocks and bonds; as opposed to PHYSICAL markets like gold and silver – as last I looked alchemy was still a myth.

In other words, when we say the Fed will stop at nothing to prevent a breakdown from the 2.6% “line in the sand” on the benchmark 10-year yield – to prevent the “most damning proof yet of QE failure” – we’re not just blowing smoke.

Green Graph

Nor are we off the mark when discussing the “dead ringer” algorithms used to support the “Dow Jones Propaganda Average” each day; or the DLITG or “don’t let it turn green” algos used to prevent rising PAPER PM prices among countless others.  Day in and out, the misguided soon-to-be-deposed powers that be let the entire world know of their desperation; and as we write, it couldn’t be clearer the “walls are closing in” on their rapidly deteriorating scheme to avert reality.

Dow Chart

IShares Silver Chart

Today alone, the aforementioned ugly German IFO survey highlighted the fact that negative interest rates or otherwise the Euro currency is on a crash course with a catastrophic breakup in the not too distant future.  Meanwhile, oil prices remain near multi-year highs as the Iraqi civil war expands with President Massoud Barzani revealing to CNN this morning that…

We are facing a new reality and a new Iraq.  The nation is obviously falling apart, and it’s obvious the federal or central government has lost control over everything – including the army, troops, and police.

CNN.com, June 24, 2014

By the way, energy is by far the most expensive input in the mining business; and thus, as brilliantly elucidated by Steve St. Angelo this morning, there is no way precious metals can materially decline in a high energy price environment – particularly if the ballyhooed shale oil fad has played itself out.  We wrote of this ominous situation a year ago and never has it been more appropriate than today.

Meanwhile, the heavily propagandized Ukraine “de-escalation” is rapidly being recognized as the outright lie it has always been.  Not only natural gas, but water supplies are now being shut down threatening to dramatically escalate hostilities between not only the puppet government and rebels, but the U.S. and Russia itself.  In other words, two of history’s most war-torn regions are on the verge of cataclysmic wars, nearly assuring sky-high energy prices and potentially, large-scale military confrontations.

Here in the land of “recovery,” the so-called driver of economic expansion sputtered badly this morning as we predicted it would.  First, the Federal Housing Finance Agency (FHFA) reported that the price rollover that commenced last summer came full circle in May as its benchmark agency was unchanged, versus last month’s 0.7% gain and expectations of a 0.5% increase.  Simultaneously, the widely watched Case-Shiller 20-city price index validated this weakness, rising by just 0.2% versus 1.2% last month and the forecast 0.8% increase.  But don’t worry, the government says “consumer confidence” is at its highest level since – drumroll please – early 2008.  Do you feel that confident?  And does anyone remember what happened directly afterwards?

And finally, the giant “pink elephant” in the room; i.e., the collapsing Chinese economy where the warehouse collateral Ponzi scheme scandal is spreading like wildfire threatening the all-out collapse of history’s largest financial bubble.  We cannot emphasize more the myth of low Chinese debt as in communist economies, the government owns everything.  And thus, whilst the “official” government debt/GDP ratio is just 32%, total debt/GDP is 183% – when incorporating what they classify “corporate” debt.  And by the way, take note of some of the other major players with astronomic debt/GDP ratios – from the UK to Japan to the U.S. itself.

Zero Hedge

Given the widespread worldwide political and economic carnage, TPTB have but three weapons money printing, market manipulation and propaganda – all of which appear to be at the end of their collective rope.  That is when market valuations have been stretched too far governments become significant equity, bond and real estate owners; and global debt and inflation surge whilst economic activity plunges there is only so much blood to take from the stone.

Published Money Supply

This goes double in the historically suppressed precious metals markets where – in an effort to generate said “confidence” – the U.S. government-led Cartel has suicidally pushed gold and silver prices well below their respective costs of production.  Unfortunately for them – and the Western world at large – the overt and covert dishoarding of physical metal over the past decade has permanently crippled their financial power, ceding the 21st century to the emerging “BRICS bloc” led by China and Russia, and likely including key oil producing Middle Eastern nations.  It is well known that Swiss refineries have been working 24/7 to convert Western gold to Asia-friendly kilo-bars; and thus, with each passing day, the global balance of power passes further from the fiat-loving Western Cartel to the bullion-loving Eastern “anti-Cartel.”  Moreover, the emergence of the gold-friendly BJP party in India will likely, if anything, yield accelerating demand from the historically largest gold importer.

Chinese Net Gold Imports

Russian Central Bank Holdins

Shortages have plagued the physical PM industry since the 2008 destruction of the global financial system – which to this day is imploding exponentially, just as the Big Bang continues to infinitely expand the universe.  The first such shortages emerged in 2008, when the Cartel attacked paper PMs to “prove” they weren’t safe havens.  Silver and gold premiums reached 100% and 30%, respectively, decidedly proving otherwise – whilst global mints sold out for months on end.  Next, demonstrating silver’s unique inelasticity, the white metal practically “ran out” when it reached $50/oz. on 2011, before the Cartel attacked via the infamous “Sunday Night Paper Silver Massacre.”  Next, we saw two significant shortages in 2013; first, when the U.S. Mint sold out of Silver Eagles for the first two weeks of the year; and next, after the April “Alternative Currencies Destruction” raids – after which “junk silver” premiums surged as high as $7/oz. above spot.  Even this year, amidst record sales volumes the U.S. Mint was rationing silver Eagles until earlier this month; no doubt the “anti-Cartel” of Eastern buyers are buying every ounce they can get their hands on.  FYI, note that no nation discloses its physical silver holdings – which based on the below chart are clearly being accumulated by “someone.”

US Mint Silver Eagles Graph

To conclude, we have never been more bullish about precious metal prices; as clearly, the “Anti-Cartel” is acquiring metal at an historic rate.  Only time will tell if Jim Sinclair is right – i.e., the anti-Cartel will aggressively move” to “de-dollarize” the world in the second half of 2014.  The current action clearly suggests “someone” is taking on the Cartel; and ultimately, the entire world will join them.  You too, can join the “anti-Cartel” by trading your rapidly depreciating scrip for real money which ultimately, will likely save your family’s net worth.