Next week, I’ll be on vacation; and plan not to write. That said, don’t be surprised if I do, as I have a nasty habit of waking up long before anyone else, with a craving to express myself; particularly, with so many PiMBEEB headlines to consider. Either way, I invite you to visit the Miles Franklin Blog to check out the vast archive of everything I’ve ever published, going back to when I joined the firm in 2011. Not to mention, to see what Miles Franklin is all about. No bullion dealer provides better personal accessibility, which is probably why we’ve been in business for 28 years without a single registered complaint. Essentially all of our staff have worked together for decades, with the average broker having more than 25 years of industry experience. And in our view, our Canadian storage programs are unparalleled; particularly, the Private Safe Deposit Box program launched last year – which you can learn about in this article, or this interview with Miles Franklin’s President and Co-Founder, Andy Schectman. Not to mention, our principals – myself included – all put our money where our mouth is, being proud Precious Metals owners, and users of our Brink’s Canada storage programs.
As for today’s financial landscape, it all comes down to what eventually, and inevitably, causes the powers that be to lose control over “last to go” markets like paper gold and silver and the “Dow Jones Propaganda Average.” To various degrees, they have lost control of countless global markets – including the vast majority of currencies and commodities. However, stock and bond markets have yet to give up the ghost, given the gargantuan amount of “support,” both overt and covert, given by relentlessly hyper-inflating Central banks and their minions. And by “minions,” I mean the partners-in-crime known as “too big to fail” banks; which themselves are decidedly losing their unwinnable war with “Economic Mother Nature,” if this week’s “surprise” capital raises by Deutsche Bank and Credit Suisse are any indication. As a whole, the only reason they are not bankrupt are the fraudulent accounting governments have sanctioned since the 2008 crisis; the “free money” supplied by Central bank printing presses – again, both overtly and covertly; and the inside information Central bank “trading desks” provide them, enabling profitable “trading” operations every day – like JP Morgan, which has only lost money on two days of the past 1,000.
The amounts earned by such operations are infinitesimal compared to the potential losses they are on the hook for, once the “most overdue financial crisis in history” inevitably arrives. I mean, Deutsche Bank alone has nearly €30 billion of illiquid “Level 3” assets that, care of said accounting lenience, are “marked” to essentially whatever price its criminal management decides. Throw in the its nearly €50 trillion derivatives book – which is far more opaque than even Level 3 assets – and you can see why piddling €8 billion capital raises could dissolve in a matter of days; particularly when Deutsche Bank, for example, is heavily invested in quite worthless assets like the sovereign debt of PIIGS like Greece.
In other words, it won’t take much to topple it, particularly when its principal counter parties – like the entire Italian banking system – are hopelessly insolvent. To the contrary, all it will take will be a mild crisis to get the ball rolling downhill; and this time, I can’t see how Central banks will have enough “ammunition” to save them. Unless, of course, “nuclear option” of hyper-inflation is attempted; which aside from Precious Metals, will destroy everything. To varying degrees, this is already being attempted by numerous Central banks – including “leading” ones like the ECB and Bank of Japan; with the only thing separating today’s historic monetary recklessness from said worst-case scenario, being the loss of confidence that inevitably jump starts monetary velocity – out of historically overvalued “mainstream” assets like bonds, and into time-tested wealth preservers like physical gold and silver.
The powers that be may have finally backed themselves into a corner they can’t escape from. With so much going against them – politically, economically, and financially – they have been forced to work harder than ever to pretend all’s well, when it is decidedly not; particularly since the “BrExit times ten” Trump election, which so thoroughly surprised them, they were forced to take their already unprecedented amount of money printing, market manipulation, and propaganda to new levels of lunacy. Most notably, by fabricating the “fraud meme” of “Trump-Flation,” to explain why out-of-the-blue, what they had spent all of 2017 fearing – i.e., a Trump election – was suddenly, just as “stock bullish and gold bearish” as the Hillary Clinton election they were so sure they had in the bag.
As vehemently espoused in my first post-election Audioblog, NONE of “Trump-flation’s” tenets were reality-based; as massive fiscal stimulus and tax cuts would not be economically viable – particularly, with the mother of all debt ceiling crises approaching. Moreover, a “repeal and replace” of Obamacare would be politically impossible – as once that “socialist genie” was let out of its bottle, it can NEVER be put back. Irrespective, for two months Precious Metal holders had to deal with the ignominy of the ensuing manipulation blitzkrieg – watching gold and silver be smashed, whilst stocks were goosed to dotcom valuations despite rising interest rates destroying what was left of the real economy. This, whilst oil was goosed by an “oil PPT” hell-bent on overcoming history’s largest oil glut; as base metals surged, despite the level of stimulus proposed being mere fractions of what China has spent over the past decade, for naught. And of course, “the dollar index”; which rose as much due to the pending collapse of Europe – which is decidedly “PM bullish”; as the fraudulent meme of a resurgent U.S. economy, which was being undermined in real-time by the dollar’s rise, as much as rising interest rates. Not to mention, as the President himself complained that the “too strong” dollar was “killing” America.
However, slowly but surely, the legs under the “Trump-flation” fraud started to be kicked out – aided “inadvertently” by the initial surge in interest rates, commodities, and the dollar, which cumulatively put a significant drag on an already collapsing economy. Interest rates peaked shortly after the election, with the benchmark 10-year yield topping at 2.62% on December 15th – prompting my “2.5%, ‘nuff said” article of January 11th; in which, I adamantly espoused that the global economy simply could not handle rates any higher. The 10-year yield subsequently plunged to 2.31% on February 27th – when “coincidentally,” gold and silver finally re-captured their 200 week moving averages (then, at $1,264/oz and $18.59/oz, respectively); which were the levels they equally “coincidentally” breached to the upside on Election Night, just before the aforementioned, unprecedented market rigging efforts commenced.
At that point, the Cartel’s “200 week moving average war” was taken nuclear – as mere minutes after the close, three Fed Presidents suggested a March 15th rate hike was imminent, despite the fact that hard economic data continued to deteriorate; which is probably why, at that time, NO ONE was expecting a March rate hike. Just two trading days later, an infamous $2.7 billion paper silver sell order – representing 20% of global annual production, that doesn’t exit – hit the COMEX open, pushing prices of both metals back down, enabling the fraudulent meme that rate hikes are “bad” for gold to be perpetuated, despite the fact that PM prices bottomed directly after the December 2015 and December 2016 hikes. Subsequently, the rate hike occurred – LOL, the very same day the Fed’s own economists lowered their 1Q GDP growth estimate to just 0.9%; and since then, interest rates, the dollar, and crude oil prices have tanked – to the point that I haven’t heard the term “Trump-flation” in weeks. Simultaneously, Precious Metals rebounded – and as I write, gold is amidst a tooth-and-nail Cartel battle for its 200 week moving average, which has since declined to $1,252/oz. The economic data continues to weaken – as evidenced by yesterday’s ugly Ford earnings outlook, and today’s “unexpected” decline in core durable goods orders; whilst the increasingly fragile political supports under the fallacious “Trump-flation” meme are rapidly being kicked out; let alone, now that the debt ceiling has returned, setting up the government to literally run out of cash by Memorial Day.
By now, it is widely known that the “best-case scenario” regarding the potential timing of any tax cut or fiscal stimulus packages – which in my view, are not politically viable under any circumstances – is next year. Moreover, both Trump and Congressional leaders alike have made it crystal clear that neither is even debatable until a “repeal and replace” of Obamacare is passed. Which puts the powers that be in the rapidly closing box they are in now; as after yesterday’s fiasco, in which the House didn’t hold vote on the Trump-Care bill because Republicans knew it wouldn’t pass, they have exactly one day to pull off a miracle; and thus, give the manipulators a few more can-kicking inches to work with. As if they can’t, and the bill in fact doesn’t survive the vote that will be held today, all hope of America’s economy being “great again” anytime soon will die. To wit, while I had initially thought March 23rd would mark the “end of Trump-flation,” its “Minsky Moment” now appears likely to be today, March 24th. And by the way, please ignore the fact that either way, America’s healthcare system will be the world’s most expensive – with nowhere to go but up, as its horrifying demographics and escalating socialistic structure ensure dramatic cost escalations for decades to come.
Irrespective, the Tweetmaster General himself, just one day removed from returning to the White House with his tail between his legs, has issued his second “ultimatum” to his “peers” in Congress in three days. The first, on Wednesday, that they would not be re-elected if they didn’t vote for Trump-Care – was loudly ignored. Thus, this morning’s “ultimate” ultimatum – that if they don’t vote for Trump-Care at today’s vote, which will not be delayed a day longer, the issue will be forever dropped. In other words, just two weeks into his Presidency, the promise to “repeal and replace” Obamacare, which from day one I said was impossible, will be dead. And with it, one of the last remaining pillars of the “fraud meme” of Trump-flation, which the powers that be have solely relied on to support history’s most overvalued financial markets, and undervalued Precious Metal markets.