It’s 1:00 AM Saturday morning, and I’m writing this article with limited lighting and just a few hours of sleep. Unfortunately, Giselle’s inability to settle down amidst lightning and thunderstorms has caused me to wake up – and consequently, I figured I’d pen a few thoughts about this week’s historic events – particularly in the Precious Metal markets. And doggone it, “take a bow” for having been so dead on about this year’s events!
To wit, back on May 18th, when the Cartel launched the “Fed Minutes Attack” – by doubling up their historically high gold and silver shorts, under the guise of an awkwardly telegraphed potential June rate hike, I emphatically predicted it would miserably fail, in the longest, most emphatic Audioblog I’ve ever published. Which couldn’t have been more accurate; as following the issuance of the Fed’s most dovish policy statement since the 2008 crisis a mere five weeks later, both gold and silver had surged back to their pre-Fed Minutes Attack levels, whilst the COMEX “Commercials”’ short positions hadn’t been reduced one iota. And thus, when two weeks later – a week before Brexit – said short positions were larger still, I theorized that the Cartel’s inevitable, London-Gold-Pool-like demise was rapidly approaching. Which is why, on June 20th – three days before Brexit – I penned “finally, the long-awaited ‘Commercial Signal Failure’ is nigh.”
Switching topics, it was May 16th when I first characterized the Brexit referendum as the “most important – and Precious Metal bullish – election in history”, due to my staunch belief that a “leave” result, as “unexpected” as it was at the time – would catalyze a chain reaction of populist movements yielding the end of the ill-begotten, ill-fated European Union and Euro currency. Meanwhile, on June 13th, after watching Deutsche Bank’s stock dramatically under perform the (itself rapidly deteriorating European bank stock index) for several days, I penned “The Lehman of Europe – Deutsche Bank- is on the verge of collapse.” Followed by June 18th “upcoming, historic silver shortage” – catalyzed by the aforementioned explosion of naked “Commercial” shorts, and an unprecedented plunge in COMEX registered inventories, to an all-time low of less than $400 million worth. Frankly, my belief in an imminent Precious Metal surge – recall, I’ve spent the past four months saying “it is not possible the world can escape 2016 without a catastrophic financial event” – did not even assume a “leave” vote; which as it turns out, catalyzed the realization of the aforementioned predictions.
And lo and behold, when the British shocked the world – delivering a death blow to the powers that be, from the world’s Central banks; to Barack Obama and Hillary Clinton; David Cameron; Shinzo Abe; Francois Holland; Matteo Renzi; and Angela Merkel, among countless others – Precious Metal prices surged like a bat out of hell. To that end, when the initial “leave” victory became evident last Thursday night, gold surged from its pre-election level of $1,255/oz all the way to $1,350, before being pushed down to Friday’s closing level of $1,315/oz. Meanwhile silver surged from $17.50 to $18.35/oz, before the Cartel “controlled” it back to $17.80 by day’s end.
That is, until we saw the COMEX COT report last Friday afternoon, revealing said “Commercials” had blown up their already record-high naked short gold and silver positions further, before Brexit even arrived. Which I discussed at length in Saturday’s “Brexit Nightmare – What’s Next?; followed by Tuesday’s full-blown forecast of imminent Cartel demise, titled “spread the word – the Gold Cartel is in deep, deep trouble!”; catalyzed by silver’s surge beyond the aforementioned post-Brexit high, even as the Cartel continued to successfully suppress gold.
Well, what happened in the ensuing three trading days took even me by surprise – as indisputably, the forces of “Economic Mother Nature” are swamping the powers that be’s best laid plans to control sentiment via relentless, unfathomably vicious propaganda and market manipulation.
Certainly, the post-Brexit surge in anti-EU sentiment should come as no surprise – as no less than eight other EU members, including major players like France and Italy, appear likely to hold similar referendums in the coming years; or in some cases, months. As again, I cannot be more vehement in my belief that the UK’s “leave” result delivered a fatal blow to the European Union and Euro currency. Not to mention, establishment politics the world round; as evidenced by Donald Trump’s post-Brexit polling surge, irrespective of initial propagandist attempts to show otherwise.
However, the chain reaction of related, horrifying events has certainly been far larger, and broader, than the powers that be could control – from Puerto Rico’s bond default today; to the Italian banking system’s immediate bailout requirement – which I wrote of on Wednesday; to yesterday’s Austrian court decision to “re-run” last month’s Presidential election, under the auspices that the surprise loss by anti-EU Freedom Party candidate Norbert Hofer was due to vote rigging; to the Mexican Central bank being forced to “unexpectedly” raise rates to stave off runaway inflation; to plunging oil prices; and of course, the catastrophic collapse in bank stock – led by none other than Deutsche Bank. In fact, amidst the past three days’ comically blatant PPT stock market goosing – occurring as U.S. mutual funds fled the market for the 16th straight week – the single worst performing stock I see anywhere is good old, soon-to-be-bankrupt DB. Which shouldn’t be surprising, given that on Wednesday night, after Deutsche Bank was one of just two banks to fail the Fed’s unfailable “stress test,” the IMF deemed it the “world’s most systematically dangerous bank.”
And oh yeah, did I mention that an additional $1.5 trillion of global sovereign bonds have seen their yields turn negative since Brexit – taking the total above $12 trillion? I mean, just yesterday, U.S. Treasury yields closed at their lowest-ever yield, whilst the stock market completed a four-day, 800+ point, PPT-orchestrated rally! And not just U.S. stocks and bonds, but European as well (aside from barely breathing bank stocks), as the entire world is starting to discount the “imminent arrival of QE to Infinity and hyperinflation.” Which would be difficult NOT to do, given that on Thursday, not only did Bank of England President Mark Carney (formerly of Goldman Sachs) say that further monetary easing would be launched as early as this month, but ECB President Mario Draghi himself (also, formerly of Goldman Sachs) hinted that the ECB’s already historic QE program, of €80 billion/month, might be expanded further. This, after Shinzo Abe “instructed” the Bank of Japan to do the equivalent of “whatever it takes” to calm markets, whilst the Fed said it would provide lines of credit to essentially anyone that wanted them. I mean, think about it! The Bank of England’s official interest rate has been 0.5% for roughly eight years, resulting in the UK having one of the world’s highest costs of living. And yet, after the Pound plunged by an incredible 12% in a mere week’s time, the BOE thinks that lowering rates further – and likely, initiating a new round of QE – will help? Or better put, that it won’t make things worse?
However, indisputably, the place the “imminent arrival of hyperinflation” is being discounted most is Precious Metals, which rocketed higher in the week’s final two days. Led by, you guessed it, SILVER, which rose roughly $0.50/oz Thursday and $1.00/oz Friday, to a two-year high of $19.75/oz. Gold, too, surged back to $1,342/oz, but still hasn’t breached the post-Brexit spike high of $1,345/oz (trust me, it shortly will!). However, the dramatic, Spring-2011-like silver surge – which has taken the gold/silver ratio down to 68 (breaking two-year support at the key round number of 70) – is where the epicenter of Cartel destruction is occurring. And if Miles Franklin’s massive business surge this week – led, of course, by silver – is any indication, said “upcoming, historic silver shortage” could be upcoming far sooner than most can imagine. And oh yeah, did I mention that this week’s COT report, published yesterday just before the NYSE close, showed that the Cartel – er, “Commercials” – initiated another 14,000 gold naked shorts through Tuesday’s trading, and a whopping 7,000 silver short positions; to defend a dying status quo that is stampeding over it like Keven Bacons’ “all is well” character in Animal House? Which I assure you, will be reflected in additional speculative, Cartel-challenging longs early next week, as the end game of the most egregious PM suppression scheme in history unfolds.
Again, I cannot understate my belief that the Brexit referendum was the most important – and Precious Metal bullish – election in history. And that unquestionably, it has catalyzed a chain reaction of terrifying financial events that will reverberate for generations to come. Including not only the break-up of the modern gold Cartel – what I years ago deemed the “New York Gold Pool” – but the spectacular, historic collapse of history’s largest, most destructive fiat Ponzi scheme.
To which, I can only beg and plead for you to protect yourself ASAP. At least, in the handful of nations where not only have prices not yet reached new all-time highs, but supply is still readily available, like the U.S.. And hopefully, that if you do, you give Miles Franklin the chance to earn your business – particularly in today’s extremely volatile market conditions; as trust me, Precious Metal dealers are decidedly NOT “commodities.”