Congratulations to Europe! The numbers are in; and following a year of relentless ECB jawboning; an historic “NIRP” implementation, and the commencement of a suicidal, €1.2 trillion QE program – yielding a 20% plunge in the world’s second largest currency (which according to Mario Draghi is a good thing); Eurozone first quarter GDP rose by a whopping 0.4%. That is, if you believe a word these lying governments say; particularly as many, like the U.S., now include illegal, non-tax generating “businesses” in their GDP calculations, like drug dealing and prostitution.
Incredibly, the MSM is touting this result as “strong” – whilst the U.S.’s 0.2% result, announced last week, is universally understood to be horrible. Just to demonstrate how different these cultures are – as well as the political goals of the monsters running them – the Eurozone result, following seemingly years of borderline recession, is propagandized as “success”; whilst here in the States, the Wall Street, Washington, and MSM “lie machines” admit the result is poor, but blame it on “the weather” – notwithstanding the fact that not only was this winter’s weather better than average – and flight cancellations below average – but entirely ignoring the “seasonal adjustments” that exist to account for this extremely predictable issue. Of course, the fact that non-weather sensitive measures were down, too – like corporate capital spending, year-over-year revenue comparisons, and online retail sales – are conveniently ignored; just as the fact that despite the so-called “great” Euro GDP number, the most important nation in Europe – Germany – was well below expectations, barely above zero.
Ironically, French GDP growth “surged” to 0.6%, outpacing nearly the entire continent – despite consistently having the weakest PMI results, connoting outright contraction. Greece, of course, contracted, and apparently the Eurozone is now preparing for the inevitable “Grexit” we essentially guaranteed. Heck, following this week’s dramatic Conservative victory in Great Britain – following its own, horrific 0.3% GDP growth result last week – the momentum behind the UK’s “Brexit” movement has dramatically increased. This is why the pound surged this week, as the isolationist movement that, ironically, started in Scotland before spreading to Spain, Italy, and France, is taking center stage. If the UK exits the Eurozone, it will dramatically weaken what remains of European trade; let alone, if when Europe is simultaneously blind-sided by the massive daisy chain of Greek-related debt defaults. To wit, the Guardian wrote yesterday that “some Eurozone banks are just as likely to fail as they were before the 2008 crisis.” To which I reply – no, they are in far worse shape than in 2008; as are the institutions, like the ECB, mandated with “bailing them out” – and the individuals who will be inevitably forced to bail them in.
By the way, Spain, too, outperformed the continental average – comically, as its housing market remains barely off its all-time low. Not to mention, as only one in ten new jobs are of the full-time variety; which, by the way, is exactly what is occurring here in the States, explaining why – “job creation” notwithstanding – the average American is getting poorer each day. Other than the “1%,” of course, who directly benefit from unfettered Fed money printing.
In fact, the “breadwinner” jobs David Stockman discusses so often have become so scarce here in the States, that part-time jobs at McDonalds are now, statistically speaking, more difficult to obtain than acceptance to an Ivy League school.
Perhaps that’s why this morning’s U.S. retail sales numbers – at a much lower than expected ZERO; depicts a nation, drowning in debt of all kinds, with nothing leftover to spend no matter how low rates go – or how high the PPT gooses the “Dow Jones Propaganda Average.” In other words, “pushing on a string” in its purest form; as printing money no longer simply results in “diminishing economic returns,” but destroys everything in its path.
Consider, for instance, the “tectonic market shifts” that have caused interest rates – both here and overseas – to surge in recent weeks, despite across-the-board horrible economic data; such as today’s Euro GDP, U.S. retail sales, U.S. import/export price data, the downgrading of Chicago’s credit rating to junk status – and oh yeah, the lowest Chinese capital spending growth in 15 years. In the big scheme of things, the recent, modest rise in mortgage rates would be inconsequential in a healthy economy. However, in one addicted to record low rates, even a tiny increase like last week’s has major, negative ramifications – as depicted by this morning’s news that mortgage applications plunged by 4% last week alone.
Which brings me to today’s principal topic – i.e., the momentous “heavyweight battle” between the forces of economic evil (i.e., Central bankers and their “partners” on Wall Street and in Washington) and those of “Economic Mother Nature”; the latter of whom is undefeated after not just centuries, but a millennia of drawn out, fight to the death cage matches. Not that I haven’t written – and spoken of – this topic hundreds of times before. However, in light of said “tectonic shifts” – i.e, the dramatic, seemingly un-catalyzed, global interest rate surge in the face of an across-the-board collapse of worldwide economic activity, it occurs to me “the big one” has commenced – to be resolved far sooner than most can imagine. In other words, the 15th round; after which, I have no doubt the supposed “underdog” Economic Mother Nature is deemed by propagandists to be will come out victorious. Unfortunately, the entire world will suffer for years from the ramifications of this war – which is why it’s so imperative to protect yourself before they set in.
For years, I have discussed – and both mathematically and graphically proven – how financial markets are blatantly manipulated. Moreover, that such manipulation has not only become more pervasive – in terms of the amount of markets affected; but intense, in terms of both scope and frequency. To that end, long-time readers are aware that circa 2005, I sat at my desk and muttered my “manipulation mantra” of “each day worse than the last” – which sadly, has never been truer. And care of the powers of compounding, ten years of manipulation acceleration has produced a financial system not only permanently broken; but for the time being, completely devoid of price discovery. Of course, there’s a big difference between “price discovery” in fraudulent paper markets like stocks and bonds – which are just as apt to be destroyed by hyper-inflation as a deflationary crash – as physical market like Precious Metals and crude oil; which in time, must submit to “Economic Mother Nature’s” laws.
The reason I bring this up today – in featuring it as a primary article topic – is the incredulity that even I, one of the world’s leading “manipulation experts,” am experiencing in watching 1) the aforementioned interest rate surge, representing the seemingly all-powerful “powers that be’s” worst imaginable nightmare; and 2) their blatantly obvious attempts to quell it via an all-out “buying assault” of stocks and sovereign bonds – such as yesterday’s prototypical “dead ringer” algorithm on the Dow, and miraculous upside reversal of the Treasury bond market, just as it threatened – for the second time in four trading days – to collapse. In recent weeks, Zero Hedge wrote of the “mysterious seller” that has relentlessly pushed Treasury yields higher for two months – which I have speculated, rightly or wrongly, to be the Chinese, based on recent TIC (Treasury International Capital) reports indicating a reduction in their Treasury holdings. However, there’s no “mystery” in who was buying last Thursday and yesterday; as we assure you, not only did QE never end, but it’s never run hotter than now. In other words, the only difference between QE3 and today’s interventions is that QE3 was done overtly (in actuality, at rates far greater than purported), while today it’s done covertly.
And of course, the relentless capping of gold and silver – which, by the way, took a serious blow this (Wednesday) morning, as both metals just surged past the Cartel’s relentless, multi-month “lines in the sand” at $1,200/oz and $17/oz, respectively, like a “hot knife through butter.”
In my view, last year’s global currency collapse – followed by this year’s commodity meltdowns, economic implosion, and Precious Metals resilience are tell-tale signs that history’s most momentous financial “heavyweight bout” is in its final round; with the so-called “champ” – the “King Dollar” – on the ropes, being relentlessly pounded in the head and body by said “Economic Mother Nature.” Most Miles Franklin Blog readers already know how this will end; and for those still undecided, we salute you for coming to the best source of economic truth around – and implore you to make your decision ASAP. And for those “choosing wisely,” we hope you’ll give Miles Franklin a call at 800-822-8080, and “give us a chance” to earn your business.
I have heard of “backdoor QE” from a couple of different places. Are they doing this through banks?
Maybe we should start a pool/guesstimate on the when the date of the officially announced QE4 will start? LOL
Any Central bank money injected into the system outside “official” QE/ZIRP programs is “backdoor QE.”
They simply print money, and give it to banks (or directly buy stocks, bonds, etc.)
So, we all know there is manipulation going on. If it can’t be stopped why worry about it?
You’re kidding, right? Not even going to answer that one.
Thanks for the warnings and the daily sanity checks. I’m a regular reader and find your analysis of the current financial malaise to be refreshingly honest. Today I’ll take one action for the coming storm and tomorrow another. Again, Thanks
You’re very welcome!
Hey red #1
According to that logic, we all know there are house breakers about, so why bother locking your doors? What a tit!
I think there can be little doubt that things are about to fall apart, and indeed your reporting of these events have been steadfast and truly inspiring. I’m really sorry that you’re loosing Bill Holter, His writting was also a great comfort in as much as I could rely on it as a bit of truth on a mountain of mainstream lies.
I have question: I’m not sure if you can answer it, but I think it’s important.
We know according to Andrew Maguire that the new SGE is meant to have come on line at the end of April, this has not happened. Is there any time frame to your knowledge? And is it possible this has something to do with the drawdown at the COMEX? The reason I ask is because presumably once this new physical exchange goes live we will see massive arbitrage on the COMEX price which will be left in the dust. Any thoughts?
I wouldn’t count too much on “new exchanges changing things overnight.” Moreover, I love Maguire (and know him personally); but the way he speaks, it seems he’s financially incented by their success. So I’d take such comments with a grain of salt.
That said, the general trend of gold trading in the East will not stop – and ultimately, will destroy the Western Cartel’s grip.
Andy… Thanks for your reply, and I respect your view.
But can I just put Maguires argument forward for a moment.
He says that when the new SGE Comes online it is a PHYSICAL bullion exchange, and I believe it is in multiple international locations. This is important to note, because Gold and Silver do not trade at the same price the whole world over as you well know. In some places there are higher premiums than in others. This invites arbitrages to come in and fill that price differential.
This being the case we would see the COMEX and LBMA as being fundermetally cheaper than other locations because of their price manipulation. This would then invite a swarm of arbitrages to come in and demand physical thereby calling the bluff of the cartel, who as you say only have two Picasso’s worth of gold left anyway.
Of course we are so late in the game now it might as well make little to no difference anymore anyway.
Not the first such exchange to go online, or the first to be promised (see “PAGE”).
The Cartel will die, but unlikely from such a transparent source – which frankly, isn’t that transparent.
Yes I do remember PAGE, and how it was sabotaged by the cartel.
Maguire seems confident this will not be the case on this exchange, but we will ave to see.
The mere fact it has now been delayed with no offal date of opening tells me that maybe this one is going the same way.
As you already mentioned, it probably won’t be needed anyway to strike the death blow.
It seems to me the central planners don’t even know what they are doing. Someone paints the picture across all markets using derivatives for paint brushes and paint. As for ‘suffering’ for four years with real money, this latest action has convinced me that we are in the right place. For the longest time I would examine the Swiss physical export and import numbers and could not understand the ignorance of the US public for PMs relative to the rest of the world. It got to the point where its so bad that my trust in ‘real money’ was starting to break. Could the US remain solvent with unbacked US dollars while some assemblance of gold backing occurs in Asia? In the last few weeks I think it can not. The financial markets need collateral and the last vestige of faith in sovereign bonds is cracking and breaking. Once that floor of faith is removed, its wily-e-coyote in mid air with nothing to grab. This will happen almost over night as the financial markets stop the search for liquidity and focus on real collateral, which is the keystone for rebuilding a new system.
Wily E. Coyote, the perfect metaphor.