1-800-822-8080 Contact Us

I don’t think I have seen so many “horrible headlines” in one day since 2008; which is probably why TPTB are desperately trying to stabilize markets.  Global equity markets were in freefall this morning; led by the collapsing Nikkei, which fell 4.2% as the “Yen Carry Trade” – i.e., the single most destructive construct in Wall Street history – continued to unwind.  Whilst all other markets plunged, the PPT made sure “Dow Jones Propaganda Average” futures didn’t turn negative overnight; and as you can see, they have been equally vigilant this morning – particularly when their nearly daily “POMO” liquidity injection was administered at 10:00 AM EST.

Dow Jones Charts

However, as I write at 11:00 AM EST, the Dow is in danger of turning negative anew; whilst yet another attempt to push gold below the key round number of $1,250/oz. decidedly failed – despite the 22nd “2:15 AM” attack in this year’s 23 trading days, and yet another 8:20 AM COMEX-opening waterfall decline.  Frankly, today’s action looks eerily like yesterday’s blatantly manipulated early goings on; in which eventually, reality took the helm.  Who knows what will happen as the day progresses?  Not me, that’s for sure.  However, if the record list of “horrible headlines” has anything to do with it, it’s going to be awfully difficult for the powers of manipulation to win the day; let alone, the coming weeks and months.

24hr Gold Silver Charts 2-4

However, of all such “headlines,” the one that piqued my interest the most relates to Japan; which as you know, we have been violently negative on for years; going back to our July 2012 article, “Demographic Hell”; as well as May 2013’s “The Real Yen Bomb Starts Now”; and last month’s Japanese Hyperinflation, Coming Right Up!

As most readers know, Japanese’s “kamikaze” government recently passed a massive sales tax increase, which is about to torpedo its already dying, hyper-inflating economy.  Starting in April, the national sales tax will be raised from 5% to 8%; and next year, all the way to 10%.  In a nation with the world’s oldest population and highest consumer inflation, such fiscal lunacy will likely yield an utter collapse in retail spending; which, in turn, will no doubt catalyze a material increase in the Bank of Japan’s current, suicidal policy of doubling the money supply in two-years.

However, after reading this article – regarding Japanese economic history – I am even more terrified of what might occur in the “Land of the Setting Sun.”  In it, a similar sales tax increase – in 1996, when the global economy was booming – was described…

In 1996, after the consumption tax hike from 3% to 5% was passed and scheduled to take effect on April 1, 1997, consumers and businesses went on a buying binge of big-ticket items to dodge the extra 2% in taxes. The economy boomed.

TestosteronePit.com, February 3, 2014

However, here’s what happened afterwards…

But it ended in an enormous hangover. In the spring 1997, as the tax hike took effect, business and consumer spending ground to a halt, and the economy skittered into a nasty recession that lasted a year and a half!

TestosteronePit.com, February 3, 2014

And here’s what we are already seeing in Japan today, two months before the aforementioned, dramatically larger sales tax is enacted – into an exponentially more indebted, inflation-ravaged, demographically-challenged population…

First indications of a repeat performance are already visible. The Japan Automobile Manufacturers Association (JAMA) forecast last week that sales of automobiles, after an already lousy 2013, would plunge 9.8% this year to 4.85 million units, the lowest since 2011 when the earthquake and tsunami laid waste to car purchases.

TestosteronePit.com, February 3, 2014

Consequently, the odds of Japan – i.e., the world’s third largest economy – actually being the “black swan” that catalyzes “the Big One” have just increased dramatically.  To ignore the economic and monetary HELL going on there is to whistle past the grave, so to speak, in our view.  It’s no surprise Japan just became a net gold importer for the first time in four years; as likely, demand will explode in the coming months; to the point that, as in Brazil, India and a rapidly growing list of MAJOR nations, it may become nearly impossible to acquire it in the coming months; and possibly, weeks.