It’s Friday afternoon, and MAN OH MAN! As a life-long financial analyst – having spent 15 years on Wall Street, including three as a bond trader; two as a buy-side analyst, and seven as a sell-side equity analyst, there aren’t words to describe how it feels to watch the financial world I “grew up in” completely and utterly destroyed. Not to mention, the global economy; the “currencies” used to purchase things; the commodities so vital to our lives; and worst of all, the Central banks and sovereign governments whose mandate is to protect the well-being of their constituents.
Plain and simple, what we are witnessing today is the apex – or better put, the “blow off top” of history’s most maniacal, suicidal “game” of money printing, market manipulation, and propaganda. Although frankly, the “propaganda leg” of said “evil tripod” broke long ago; as at this point, trying to get anyone to believe the economy – any nation’s economy – is going anywhere but straight down is a fool’s game. Which is probably why the “final currency war” I warned of three years ago has gone nuclear – as evidenced by first, yesterday’s insane ECB announcement that, for the third time since initiating its historic, open-ended QE program seven months ago, it plans to “up the ante” at its upcoming December meeting. And next, this morning, the PBOC lowered its benchmark interest rates and reserve requirements to “one-up” the Europeans – incredibly, not during Sunday afternoon, as the Chinese usually do, but during the New York pre-market trading session!
Per the “final currency war,” there is nothing surprising about Central banks aggressively competing to debauch their currencies in the proverbial “race to the bottom” – even if, as Japan’s hideously failed Abenomics scheme depicts in spades, the net result of currency devaluations are not only reduced purchasing power for millions of citizens; and imploding government credibility; but increased trade deficits! However, the fact that such draconian, hyper-inflationary actions are being taken amidst no visible financial crisis is beyond shocking, given that 1) Central bankers worry principally about stock and bond markets – and secondarily, little else; and 2), by taking such actions whilst (blatantly government supported) markets are rising, they are depleting whatever monetary “ammunition” they might have such stimulus is needed most; i.e, when markets are falling anew. Which should tell you all you need to know about what’s really going on in China’s and Europe’s “Main Streets”; i.e., the “worst global economy of our lifetimes.”
Each day, this terrifying truth is becoming more and more obvious to more and more people, in more and more countries, as the “horrible headlines” are only getting worse, regarding both quantity and quality. And just as the Cubs getting swept from playoff contention on “Back to the Future Day” – due, no less, to a player named Murphy – suggests some sort of vengeful “karma” in the universe, the fact that today’s “all-out” affront to “Economic Mother Nature” coincides with her “sister,” Mother Nature herself, unleashing the most powerful hurricane – Patricia – in recorded history is an ironic footnote.
Let’s face it. What’s going on in financial markets is unprecedented, even in the post-2008 world of relentless manipulation of everything from stocks; to bonds; commodities; currencies; economic data; and, of course, Precious Metals. To wit, I long ago deemed the Fall of 2011 to be the “point of no return” for “first world” Central banks like the Fed, ECB, and Bank of Japan – when, amidst collapsing markets and economies following their desperate, chaotic financial crisis stimulus measures, they realized they must not only go “all-in” on such stimulus (QE, ZIRP, Abenomics, etc.), but “step up” said manipulations to a 24/7 basis, including both covert and overt support of stock and bond markets. And following China’s historic stock market crash this summer – during which, I constantly mocked their Keystone Kops “leaders” about their inability to copy the U.S. PPT’s ability to manipulate stock markets – they finally “got the message,” in taking the Eastern world past its own “point of no return.” And thus, the monstrosity we have witnessed this past month; as amidst the worst economic and financial data imaginable, stock markets have gone on an historic, Tulipmania-like surge – with the same algorithms as always, every single day.
And the craziest thing is that there is NOTHING supporting optimism of any type – as frankly, the “low interest rate” thing is getting a bit tired at this point. I mean, after seven years of essentially zero interest rates, the global economy has never been worse; debt loads, never higher; and productive overcapacity, unprecedented. Even Wall Street is suffering, and “horrible headlines” such as the following – from the past 24 hours alone – are becoming ominously commonplace.
- “(Subprime) auto loan market reminds me of what happened right before the (subprime mortgage) crisis (in 2008), top regulators warns”
- “CEO of Europe’s largest zinc producer hints at default, as its bonds hit record lows, and stock plunges most ever”
- “U.S. Treasury warns of a humanitarian crisis in Puerto Rico if Congress does not agree to a bailout”
- “China steel output may collapse 20%, Baosteel Chairman says
- “Slumping crude oil will send Norway to ZIRP, as economy careens toward recession
- “U.S. shale oil drillers running out of options fast”
- “Lew to Congress – Raise the debt ceiling now”
Regarding the impact of further rate cuts – in China, towards their inevitable destiny at zero (or below); and in Europe, further into negative territory – all they will do is “deform” the already dying global economy further; not to mention, the catastrophically compromised corporate world. In just the past 24 hours – since publishing my most recent Audioblog, “a match made in hell – economic collapse and exponential money printing” – I have compiled no less than two dozen articles about the horrifically deleterious short- and long-term effects of the ECB and PBOC announcements. But frankly, if you simply read this one by the great David Stockman, you’ll realize just how much permanent damage has already been done, and how much worse the situation will become now that global money printing activity has gone parabolic.
As for “financial markets,” the fact that the “Dow Jones Propaganda Average” has risen 1,500 points since October 2nd’s horror of a September NFP employment report – making a Fed “rate hike” next week an impossibility, and likely forever as well – should tell you all you need to know about how maniacally the PPT has worked to avert the inevitable, global “realization of reality.” That said, what we have witnessed in the past week is in my mind unprecedented, even for a group of financial sociopaths that will stop at nothing to destroy the world, and pad their own pockets while doing it.
I mean, I actually wrote full articles on Monday, Tuesday, and Wednesday this week – culminating with the MUST READ “Precious Metals manipulation primer” – of how blatant, and relentless, the Cartel’s efforts to prevent gold and silver from taking out their 200 day moving averages of $1,177/oz and $15.97/oz, respectively, have been. I mean, geez, just look at the historic (naked) shorting the so-called “commercials” have been undertaking at the New York CRIMEX since the physical market “awoke” this summer – following the July 19th “Sunday Night Paper Massacre,” when they took paper gold down $52 in one minute. Not that I’m “worried” in any way, as said “COTs” stopped mattering long ago. However, the fact that said “commercials,” if you believe the data, have shorted a whopping 141,000 gold contracts and 56,000 silver contracts, in the last two months alone – amidst a rising price environment – should tell you just how terrified they are of the massive Precious Metal breakout we all know is coming. Heck, even David Schectman devoted the majority of his commentary today to the comically blatant attempts to “defend” gold $1,177 and silver $15.97; whilst Bill Holter wrote of the “crime of the century” going on at the COMEX – where, at this point, essentially no metal is delivered, despite tens of thousands of contracts supposedly standing for delivery. Which I guess is a (temporarily) good thing for the Cartel, given that COMEX “inventories,” for all intents and purposes, have been exhausted.
By day’s end, following a second straight Dow explosion – via the same “dead ringer” algorithm as always – gold and silver were essentially unchanged, having survived the prototypical “Cartel Herald” cap and attack algorithm at both the “2:15 AM” EST open of the London paper “pre-market” session – where the Cartel has now attacked PMs on 535 of the past 611 trading days – and the 8:20 AM EST COMEX open. In both cases, blatantly defending said 200 day moving averages.
That said, the “powers that be’s” comical efforts to usurp “Economic Mother Nature” were dealt ugly blows both yesterday and today – as the “Commodity Crash” that has ZERO chance of reversing was in full force; particularly in the world’s most important commodity, WTI crude oil, which plunged to within 1% of the phony support at $44/bbl created by August’s “oil PPT”-orchestrated “dead cat bounce” from below $38/bbl. Moreover, now that the ECB has escalated said “final currency war” to thermonuclear status, the Euro plunged to a nine-month low – taking the Yen with it, as speculation of “monetary retaliation” at this Friday’s Bank of Japan meeting intensified. And by the way, don’t be surprised if further “dollar strength” – i.e., Euro and Yen weakness – causes Whirlybird Janet to “surprise” the financial world with far more dovish comments than anticipated at Wednesday’s FOMC meeting, enroute to her inevitable destiny with QE4.
Well, that’s enough for now, as it’s time to forget the atrocious financial world for a few days, and enjoy the build-up to my Mets playing in their first World Series in 15 years. That said, the unprecedented monetary lunacy we are experiencing can NEVER take a vacation – and next week’s Fed and BOJ meetings may well escalate this week’s ECB and PBOC monetary horrors by several notches, as the world rapidly hurtles toward hyperinflation. This is the nature of today’s global fiat currency Ponzi scheme, just as it was in all 599 previous attempts to replace real money with worthless paper. In other words, if you think we’ve already reached the “pinnacle of monetary lunacy,” you “ain’t seen nothing yet!”