Yesterday, we both wrote and spoke of our belief “it” has begun. Sure, TPTB are working overtime to fight powerful winds of change in the financial markets they have long controlled by manipulating, manipulating and manipulating some more. However, watching the average global interest rates plunge to an all-time low this morning, the “most damning proof yet of QE failure” could not be more obvious. Contrary to mainstream belief, we have shouted from the rooftops that Western interest rates will go to zero as the investment community front runs universal “QE to Infinity,” guaranteed to be implemented by all Central banks as the global economy collapses. Below, Zero Hedge highlights Europe’s complete “Japan-ization” – i.e., a financial cancer that can never be cured, but must be treated with exponentially expanding money printing. And unlike actual cancer, “Japan-ization” is as contagious as Ebola – to all nations with fiat currency regimes. Which is to say, in today’s horrifying financial world, all of them.
As for the U.S. economy, which we’re to believe is “recovering” whilst the rest of the world implodes, the benchmark 10-year yield not only breached its 52-week low of 2.31% this morning, but blew through it like a knife through hot butter, touching 2.28% before the Fed intervened with yet another “new hail mary trade.” As for said “recovery,” in last week’s “painting the tape” we predicted “better than expected” NFP employment data, as it was the last such report before the mid-term elections – supplementing our case by citing the verifiable fraud of the October 2012 report. We’ve already been over the fact that last week’s report was, despite being “better than expected,” one of the ugliest yet – care of hideous internals revealing a U.S. labor situation in unprecedented decline. And guess what? As it turns out, this report, too, was completely fraudulent; as yet again, the New York Post’s Jon Crudele uncovered a “whistleblower” admitting NFP data is fabricated.
Since Friday’s report, U.S. stocks and interest rates have plunged as have most commodities. In other words, it didn’t fool anyone – 5.9% “unemployment rate” and all. In fact, European stocks have plunged dramatically – and even after this morning’s cursory bounce, they are declining anew. Even hope is disappearing in Japan and Europe, as they join countless second and third world economies in the throes of recession, currency collapse and social unrest. And the worse things get, the higher the odds that various “secession movements” gain momentum. Trust us, if Caledonia votes to secede from Spain on November 9th – taking with it 25% of Spanish tax revenues – it could spell the collapse of the Spanish nation state as we know it. Worse yet, if the Cartel loses control of gold in the ensuing chaos, yielding a material upward spike, the odds of Switzerland voting to re-back the Franc with gold on November 30th will increase dramatically. In other words, the ramifications of four-plus decades of insane monetary policy are coming home to roost; and frankly, if it doesn’t result in significant revolutions and wars we’ll be shocked. History doesn’t lie and “Economic Mother Nature” doesn’t lose.
Of course, the main cause of the global cancer is its “head Central bank,” the Federal Reserve. Created by the chicanery and bribery of a handful of evil bankers led by J.P. Morgan himself, the Fed has not only destroyed the American dream but catalyzed untold financial losses, inflation, and social unrest the world round. When its Ponzi scheme was co-opted by similarly greedy, short-sighted bankers and politicians in 1971, the world’s population was sentenced to financial death with a “commuted sentence.” That commutation represented the time it took for their governments, armed with unfettered printing presses, to reach “peak debt” – which occurred around the turn of the century and accelerated when the financial system broke in 2008. Today, the Fed is printing more than ever – and care of the “final currency war,” so is everyone else. Global debt is now increasing parabolically, which is why we couldn’t be more confident the “end game” is commencing.
To that end, yesterday afternoon the Fed perpetrated one of its biggest lies yet; and simultaneously, inadvertently admitted its failure. However, per today’s title, this is just “Part I” of its ignominy, with Part II coming in the near future, when it overtly ends its “tapering mirage” – by reversing course completely and announcing QE4.
As readers know well, FOMC “minutes” publication have become one of the Cartel’s most reliable “key attack events.” Since its “tapering” propaganda scheme commenced last Spring, every time the Fed speaks, PMs are attacked; as well as every time the minutes of their meetings are released, despite the fact nothing incremental ever emerges.
However, not so yesterday, when the Fed validated everything we have been passionately writing of this year. In fact, not only did precious metals surge (with gold’s gain capped at, what a shock, EXACTLY 1.0%), but interest rates plunged into the abyss, enroute to this morning’s 52-week lows. Frankly, our long-time suspicion that said “minutes” are doctored was strengthened as well, as there is simply no way such comments would not have been divulged in the FOMC’s original statement – let alone, subsequent FOMC member speeches. And oh yeah, some of the comments that supposedly emanated from meetings in mid-September appear to be directly in response to events of the last few weeks.
Irrespective, despite one’s views on such “conspiracy theory,” the Fed first validated our contention that the U.S. economy does not function in a vacuum when the entire global economy is in freefall.
*FED OFFICIALS SAW GLOBAL SLOWDOWN AMONG RISKS TO U.S. OUTLOOK
Next, it referred to its fear of bursting the bubbles it created.
*FOMC SAID SOME DEVELOPMENTS COULD UNDERMINE FINANCIAL STABILITY
And most importantly, it addressed what we have been screaming of for the past month of how the “strong dollar” not only exports massive inflation to the rest of the world, but decimates U.S. corporate earnings. In other words, that “final currency war” again, as plain as the nose on one’s face. And in this kind of war, it is mathematically impossible for anyone to win – with everyone ultimately losing to hyperinflation.
*FED SAW RISING DOLLAR AS RISK TO EXPORTS, GROWTH, MINUTES SHOW
The PPT immediately hopped into action, eager to convince the world that the same old Fed-subsidized “carry trade” could boost stocks indefinitely, particularly with the Fed essentially guaranteeing its “considerable time” of ZIRP policy is on the verge of becoming infinite. However, U.S. stocks are losing their bloom already this morning; and as noted above, European stocks are actually down for the day. As usual the MSM writes of the “good news” of the Fed warning of an economic downturn, just as last week’s “better than expected” NFP report was “good news” as well.
Unfortunately, the “all news is good news” game is coming to an end. And thus, it would seem the only way equities can rise in the coming months is if they are accompanied by surging inflation. Real estate is dead, rate hike expectations are becoming a distant memory, and for the coup de grace, the Fed-generated equity bubble appears to be on its last legs. It’s quite appropriate that America’s two oldest most storied retailers, Sears and J.C. Penney, will shortly go bankrupt. Not to mention, by year’s end, China will have surpassed America as the world’s largest economy.
As for precious metals, it won’t be long before the entire world realizes Sunday’s night’s gold raid, stopped cold at $1,183, likely created the massive triple-bottom signifying the end of three-years of merciless Cartel attacks – which most likely, have drawn the world’s physical metal supply down to fumes. The great Steve St. Angelo, who will participate in next Thursday’s “Miles Franklin All-Star Silver Panel Webinar” put the absurdity of the past 18 months’ paper price declines in perspective in his latest article – as depicted by the below graphs of how physical demand reached all-time highs in 2013, whilst paper prices hit multi-year lows, well below the cost of production.
Readers this is officially “table pounding” time for precious metals ownership. If the current, historically unprecedented bullish fundamentals can’t convince you to at least partly insure your assets with real money, I’m not sure what will. NOW is the time to act; and if you do, we humbly ask you to call Miles Franklin at 800-822-8080 and give us a chance to earn your business.