For the time being, we’re amidst the thousandth version of Cartel “wash, rinse, and repeat” – in which a Precious Metals rally is forced to first, endure the ignominy of blatant capping the entire way up, as it has since gold first breached the latest “line in the sand” at $1,250/oz on the “$50 up day” of February…
…and for silver, $16.00/oz…
And second, the inevitable plunge amidst wildly PM-bullish news flow; in which the vast majority of said “declines” occur in a handful of seconds, at “key attack times” like the 2:15 AM open of the London paper market, the 8:20 AM open of the New York paper market, and the 10:00 close of global physical trading. You can blame it on “the COTs” – which as you know, I don’t put any credence into; or Monday’s (today’s) COMEX options expiration – which undoubtedly is a contributing factor; or anything you’d like. However, the big picture “reason” is the same as always. Which is, the Cartel’s desperation to prevent Precious Metals from commencing the inevitable mega-rally that destroys them. As it has already, I might add, in the vast majority of global currencies.
Based on my personal feelings, on this three-day holiday weekend, the Cartel unquestionably succeeded in temporarily quashing burgeoning PM sentiment in the Western world with Thursday’s violent, pre-meditated “Post-Brussels Bash” paper raids – starting from the second trading closed on Wednesday, until the last half-hour of Thursday’s trading; when, for the third time in the past two weeks, it deployed an “icing on the cake” algorithm to turn gold and silver gains into losses.
Meanwhile, the PPT was doing its thing, in generating the “Dow Jones Propaganda Average’s” seventh “dead ringer” algorithm of the past eight sessions – turning losses into gains with a patented “hail mary” in the day’s final minutes. This, amidst a slew of horrific economic data, including a 2.8% plunge in durable goods orders; a -6 reading of the Kansas City Fed Manufacturing Index; and an ugly, “worse than expected” PMI services report, in which its publisher, Markit, opined “the U.S. economy is going through its worst growth spell in three-and-a-half years…and the worst may be to come, as the greatest concern is the near-stalling of new business growth.” Not to mention, one day after one of the worst Western terrorist attacks of the 21st century. To that end, it’s quite amazing how many global stock plunges “end” with the PPT, huh?
That said, in a world where the increasing momentum of reality is unquestionably winning the day, said “battles” are turning out to be, in the big picture, anomalistic blips within an increasingly losing war. To that end, as fundamentals have continued to weaken with each passing day, the greatest bubbles of all have been inflated, as evidenced by psychotic charts like this one, of the hyperbolic explosion of energy company P/E’s, to levels bordering on “dot-com like.”
As they say, what comes up, must come down, and the bigger they come, the harder they fall. And right now, what’s “up” has never been higher, or been based on flimsier premises. Whilst conversely, what’s “down” – i.e, Precious Metals – have never been suppressed more, amidst the most powerful fundamentals of, perhaps, all time. To that end, Ted Butler’s “five years that changed silver forever” article couldn’t be more apt – on this, the fifth anniversary of silver hitting $50/oz – in noting that since then, the Cartel’s maniacal “point of no return” suppressions – starting with May 1st, 2011’s “Sunday Night Paper Silver Massacre,” have, amidst the most explosive – and expanding – money printing episode of all time, catalyzed record PM 0demand, plunging inventories, and declining production.
That said, what catalyzed me to write today’s “most transparent lie of all time, part II” just five days after penning “part I” was to highlight just how flimsy the assumptions behind said stock “rally” and PM trashing are, from no better source than the horse’s ass mouth itself, the Federal Reserve.
To wit, in Wednesday’s “Part I,” I wrote the following, of the “powers that be’s” pathetic attempts to maintain their high-wire balancing act of propaganda and market manipulation, to an increasingly incredulous and disbelieving audience…
“With each failure to raise rates – despite unrelenting propaganda of “recovery”; without fail, it has taken no more than 24 hours for propaganda of rates being raised at the next FOMC meeting to emerge. And this time was no different, with not one, but two Fed governors claiming that “rising inflation” and “falling unemployment” suggest a rate hike is possible as soon as next month. Both of whom, I might add – Dennis Lockhardt of the Atlanta Fed, and John Williams of the San Francisco Fed – voted to keep rates at 0.25% last week!
In Lockhardt’s case, his inane ramblings of being “confident in a 1Q GDP bounce” – when the quarter is already over, featuring the ugliest economic data yet, sound like the words of a delirious lunatic, who will literally say anything he is told. As for Williams, who smugly predicted four rates hikes in 2016 in December, whilst the Fed’s first “rate hike” in a decade nearly destroyed the world, there may not be a more two-faced politician on the planet, which is saying quite a lot.”
Yes, that was Monday, just five days after the Fed voted 11-1 to maintain rates, and reduced it’s “dot plot” expectation from four rate hikes in 2016 to just two. Which inevitably will fall to zero, per Peter Schiff’s subsequent article, “two down, two to go.”
And how about that? Said “governors” are also complaining about too much emphasis being placed on said “dot plot,” despite them knowing full well it has been one of their most obvious, and accurate, expectation-setting tools. But better yet, the notion behind Lockhardt’s contention of why rates should be raised in April has already been disproved, mere days after he voted to maintain them at 0.25%. Which as noted above, was his “confidence in a 1Q GDP bounce,” despite ALL evidence suggesting otherwise. And keep in mind, it is the Atlanta Fed, which he is the President of, that issues the Fed’s official GDP guidance.
To wit, despite every imaginable economic report since the first 4Q GDP growth estimate of +0.4% was released suggesting downward revisions, the BLS reported Friday that the “final” estimate was not +0.4%, but +1.4%. In other words, fabricating the data – and doing quite the poor job of it, given just how bad +1.4% is amidst an economy in its supposedly sixth year of “recovery,” sporting, LOL, “full employment.” Let alone, the fact that data fabrication notwithstanding, by far the largest contributors to said “growth” were non-productive healthcare spending (i.e, Obamacare), and misguided inventory building, creating the highest inventory-to-sales ratio since the height of the 2008-09 recession.
Whilst this data cooking monstrosity of a 4Q GDP lie was being disseminated, the Atlanta Fed’s very own “GDP now” estimate for 1Q GDP “growth” plunged from +2.7% a month ago, to +1.9% on – yep, March 16th, the day the Fed maintained rates – to…drum roll please…+1.4%. In other words, Lockhardt’s rationale on Monday for an April rate hike – i.e., “confidence in a 1Q GDP bounce,” was already eliminated by Thursday, when his own Atlanta Fed lowered its 1Q GDP growth estimate to just +1.4%; with the “icing on the cake” coming Friday, when the BLS, LOL, “raised” its estimate of final 4Q GDP growth (which may be revised further in the years to come) to that same +1.4%. In other words, the most transparent lie of all time” not only became more transparent, but in just four days’ time!
In other words, the lies, fabrications, and manipulations behind “market movements” like this weeks’ are becoming more transparent than ever; and in the process, creating the most egregious “mis-pricings” in financial market history. To that end, when it comes to financial assets, if you believe the most epic bubbles in history can be sustained by Pinocchio-like lies, you’re welcome to invest your hard-earned savings in them. As for fire sale priced Precious Metals, if you believe they can continue to be held down amidst record demand and money printing, as well as plunging inventories and production, go right ahead and ignore them.