Never have I had more to say – as literally, my pre-article notes contain a record-setting 14 pages of “horrible headlines.” I’d love to devote my daily entirely to the Swiss referendum; and in fact, today’s title refers to this weekend’s abject failure of the 0.1% of the global population Switzerland’s citizens represent. However, upon learning from overseas colleagues that Swiss bankers, politicians and media were as universally “anti-yes” as America’s worst propaganda pushers, it couldn’t be clearer the referendum was doomed from the start. Then again, as we predicted in Wednesday’s “decision of a lifetime,” many Swiss that truly understood the long-term decidedly positive ramifications of a “yes” would likely avoid “rocking the boat,” given current “common knowledge” that Swiss stocks are correlated to SNB money printing.
Even in Switzerland, the “world’s smartest 0.1%” in the topic of monetary discipline didn’t care enough to do what’s best for their future. And given Switzerland has been hovering near recession for three years with inflation so high that a referendum to raise the minimum wage to $25/hour was voted on earlier this year, my guess is there are far fewer “1%-types” there than one might expect. Let’s face it; this was the one and only chance for the people to strike a death blow to TPTB. And instead of doing so, the Swiss not only neglected their own best interests but those of billions of people the world round. In other words, our most likely scenario of the markets ultimately doing TPTB in has now been elevated to the only possible scenario. To that end, the referendum’s failure increases the odds of such an event exponentially now that Western central bankers have been given the “all clear” to hyper-inflate.
Next, I could spend pages writing of this month’s historic pre-referendum PM attacks – in both the markets and media, in which no “weapon” were spared to minimize gold and silver sentiment. Even as the ECB and BOJ dramatically expanded their monetization schemes – as global growth ground to a halt – TPTB expanded their manipulations by taking Western stock markets like the “Dow Jones Propaganda Average” to record nominal levels whilst commodities, currencies and bond yields crashed. Frankly, I’m so disgusted with the blatancy of Friday’s pre-referendum PM raids – on one of the year’s thinnest trading days, no less – I’m going to only write of them briefly.
And no, gold and silver did NOT plunge due to Friday’s crude oil implosion; as not only are PMs decidedly not “commodities,” but in gold’s case, its price barely budged on Thanksgiving, when the vast majority of oil’s losses occurred. No, it wasn’t until the COMEX opened Friday – “conveniently,” on “First Notice Day” for the December contract – that the real carnage was unleashed; as usual, in quick algorithm bursts like the below 2% waterfall decline in paper silver – whilst the PPT wouldn’t allow the Dow to even decline amidst the “all-important” Black Friday shopping spectacle (which was an UNMITIGATED CATASTROPHE); even as bond yields, commodities and currencies crashed like an actual Black Friday market crash. Then again, this is “2008, with one temporary exception”; which, when the PPT inevitably fails, either via deflationary crash or hyperinflationary explosion, will make the 2008 implosion look like a “day in the park.” In fact, it was quite surreal watching Friday’s “trading”; as everything related to borrowing and spending was higher – whilst, across-the-board, industrial stocks sharply declined. And no, I’m not just referring to oil companies!
Back to oil, in anticipation of the inevitable propaganda characterizing this Fall’s – and particularly, Friday’s – gold plunge as “oil related,” we put together these chart of how oil and gold have fared since the Cartel’s September 2011 “point of no return,” when it went “all in” suppressing PM prices. In the ensuing 2½ years as the global economy plunged from bad to worse, oil prices rose 20% whilst gold plunged 35%; in other words, demonstrating a relatively high negative correlation. Heck, even taking the series through this Fall’s horrific oil plunge, you can see gold’s decline was far larger; and still, the correlation was negative.
Frankly, the Swiss vote doesn’t even rank in our top two stories this weekend – as whether “yes” or “no,” PMs will eventually break the Cartel’s shackles. Nor, for that matter, does this week’s ECB meeting make the list – in which QE or NIRP may be expanded; or the Ukrainian President saying he “doesn’t fear World War III.” No, this weekend’s undisputed “horrible headline” champion is the historic oil plunge; which in just the 24 hours following OPEC’s decision (which I predicted) to commence a bloody price war with the high-cost, heavily depleting, massively overleveraged U.S. shale industry – plunged by more than 10%, to close the week at $65.99/bbl. (as I write Sunday night, $64.70/bbl)!
Tomorrow’s article will be devoted entirely to this globally important topic; but frankly, no amount of writing can do justice to its horrific, long-term ramifications. To wit, when we wrote “crashing oil prices unspeakable horrors” six weeks ago – with WTI crude at $81/bbl., no less – we could not have been more serious. Unlike precious metals, which are falling due to manipulation, whilst physical demand surges and supply is on the cusp of collapsing, oil is freefalling due to the deadly combination of imploding demand and exploding supply. A situation, we’re sorry to say, that will dramatically worsen in the coming years, yielding inconsequential “positives” relative to the terrifying political and economic negatives collapsing oil prices portend. When you see the title of tomorrow’s article, you’ll know exactly what I mean; as in our mind, the convulsions the entire world will endure at $65/bbl. oil – let alone, significantly lower levels – will be catastrophic no matter what ridiculous propaganda TPTB generate.
Last, but far from “least,” I want to discuss just how unfathomably wide the chasm between paper and physical PM fundamentals has gotten, following this month’s historic “pre-referendum” Cartel raids. This incredible dichotomy was on full display Friday, prompting thoughts of 2008 – when nearly all the world’s Mints closed as gold demand exploded and silver supply disappeared.
Not only did gold forward rates continue their freefall into negative territory Friday – with even the six-month rate turning negative, and the one-year rate on the verge of such for the first time ever; but the Indian government unexpectedly removed the “80/20” import/export restrictions that have served as a severe impediment to gold demand (at least, the official non-smuggled type) this past year.
Better yet, U.S. Mint Silver Eagle sales ended November with a bang, whilst “paper prices” plunged $1/oz; at 3.4 million ounces, on a pace that would have challenged last month’s record non-January level if the Mint didn’t suspend sales for 12 days when it sold out of silver. Even with the supply suspension, 2014 demand is on pace to exceed last year’s record level; as is the Royal Canadian Mint, which released its third quarter sales figures on Wednesday. Not to mention, the world’s largest silver consumer, India, which is also on pace to exceed 2013’s record silver import levels this year.
As for “inventories,” nearly a third of the COMEX’s measly 67 million of registered silver inventory was stood for on Friday’s “first notice day” – although I think we all know such numbers are bogus, as little or no actual available silver likely exists. That said, the pressure will likely get turned up further at today’s unconscionably low prices well below the cost of production, as global money printing explodes amidst Depression-like global economic conditions, unprecedented debt accumulation, collapsing currencies and sovereign bond yields, and broadening geopolitical tensions.
As for Shanghai silver inventories, last month’s “$50 million of inventory, that’s it?” article is back in play; as in the past two days, an astounding 25.5 tonnes were withdrawn, representing 21% of Shanghai’s total silver inventory – taking total inventory back down to just 93 tonnes, worth less than $50 million. This is nearly the exchange’s all-time low level, down 95% from when the April 2013 “alternative currency destruction” raid was initiated a day after Obama had a “closed-door” meeting with the top ten “TBTF” bank CEOs.
And last but not least, a quote from the great Egon von Greyerz – fittingly, one of the leaders of the “Save our Swiss Gold” campaign. Putting to bed any remaining doubts as to how strong global physical gold demand has been, it appears Swiss gold refiners are again working round the clock to meet insatiable global demand – which we assure you, will NOT stop growing until inevitably it swamps any and all remaining supply.
In the last few weeks Swiss gold refiners have been working around the clock because of extremely strong demand from the Far East, India, and the Middle East. And they have indicated to me that they expect the strong gold buying to continue into next year. So despite the recent weakness in price, 2015 is setting up to be an explosive year for the gold market.
–King World News, November 28, 2014
For those of us that believed and/or hoped the “world’s smartest 0.1%” would make a difference, I guess we’re all a bit disappointed. Fortunately, a “no” vote doesn’t change PM fundamentals in the slightest – and frankly, makes them stronger yet as the entire world realizes the supposedly most “prudent” money managers are fully committed to debauching their currency. At prices well below their respective costs of production, it is difficult to see how anyone would not want to own physical gold and silver today. And for those that don’t, what more do you need to see to realize what direction the world’s 182 fiat currencies are headed?
You cannot stop a speeding runaway train without it destroying itself.
This is what we have here. A yes vote could have slowed down the runaway train but the manipulators pushed the Swiss people trying to stop it out of the way.
So yes the train now can continue increasing its speed down the track but now it has to end with only one outcome…a horrific crash.
all mankind is now aboard the fiat printing express but what they do not realize that the train is doomed to crash.
as usual Andy great piece. I look forward to more from you this week.
Agreed completely. Look forward for today’s article, on SHALE OIL!
I enjoy your work immensely and was very much looking forward to your thoughts on the Swiss vote among the other shenanigans that occurred over the extended holiday weekend. Watching what happened to the metals on Thursday and Friday was truly comical albeit incredibly disappointing. Can there be any doubt at this point that these markets are the most blatantly and criminally manipulated markets of all time? I mean even the most ardent stock market or U.S. Dollar bull would be hard pressed to deny that at this point. It’s gotten to the point where they no longer even hide what they are doing as it could not be more obvious to anyone with even cursory knowledge of how freely traded markets are supposed to work!
It is sickening to see what these guys can get away with but as you have said many times they are simply delaying the inevitable collapse that is mathematically guaranteed. They are also providing folks like myself additional time to “stack” real assets like gold and silver and ridiculously discounted prices.
Keep up the excellent work!
Thanks, your analysis is dead on as well.
It’s very clear that the bad guys have the mentality that “…if I can’t have it, nobody can…”.
We are in a race for the gutter. I hate to see everyone have to go into the gutter, but the 99% refuse to do any thing but ride this dead horse.
It’s disappointing to see you ranting about how Swiss gold referendum is an “earth shattering event” and now you say it’s not even top two stories in PM. Andy, do you realize that you sound just like talking heads in the main stream media you so despise except that you are on the other side of the debate?
Sometimes I don’t know how to respond. You think I sound like the MSM? Really? Geez.
I’ll second that, you do hype up an event by saying things like “its the most terrifying thing that the powers that be have ever come across” and then quickly downplay it by saying “it couldn’t be clearer the referendum was doomed from the start.”
On to the next hype about what’s going to break the camel’s back like the crashing oil price and imploding shale industry.
With that said, I still wouldn’t put you in the same category as MSM…but its clear you are biased towards amplifying stories to sound like “this could be it” with the goal of selling more precious metals.
Give me a break, and read this…
Critical momentum is beginning to take hold.
Russia and Iran today move forward with trade agreement.
Both China and Russia are building up the pace of new currency and trade deals with countries all over the world and not just the BRICS
Just look at the number of deals done since Russian sanctions put in place.
Power is a tool but a tool that requires maintenance and care in order to operate properly.
If you use or should I say abuse power it is bound to loose its effectiveness over time.
That is where we are. The West has pushed its agenda on the countries of the world for just too long.
Allies are only allies if they are not forced into submission.
A submissive relationship usually ends eventually and it usually ends badly..
Arrogance makes for bad relationships.
Thanks so much for your articles. Without people like you and Bill writing on the manipulation that exists, I probably would have chickened out and sold my stack of PM’s some time ago (for a hellacious loss). Please keep up your work as it is something I look forward to reading every day. Oh, and by the way, when the next decent case of mine settles (I do plaintiff’s personal injury work), I plan to buy a couple of boxes of Silver Eagles from you. Hopefully that happens before the price goes up too high!!
That’s why we own PHYSICAL, not “Paper PM Investments” like GLD and SLV (aside from the fact they’re frauds)!
“2015 is setting up to be an explosive year for the gold market.”
Laughable, many contrarian gold bugs including Peter Schiff, Bo Polny and many other “historically legendary financial gurus with 100 years of experience from king world news” predicted $2,000 gold in 2014. My prediction: 2015 is going to be business as usual and gold and silver are going to remain at these levels or go lower.
I didn’t write that, although fundamentals certainly suggest it.
As for your opinion, good for you.
The hype is breathless but I suppose it’s what sells MF product. jay and Walter, if you’re looking to unbiased critical analysis go to Trader Dan site – he’s was bullish gold on the run up and has been bearish on the decline.
LOL, “Trader Dan” who has traded gold for decades – and was once close friends with Sinclair – but vehemently denies gold manipulation, to the point of anger.
Give me a break.
That’s right Andy – “traded” – buying and selling. just not buying (now who could that be?)
I’ve never found his writings to show any anger, it’s very matter of fact and level headed – and he’s not flogging a product.
Though I do enjoy you rants Andy