This weekend’s “vaunted” G-20 meeting in Shanghai came and went – as I expected, with no concerted action. You see, governments are no different than Central banks – in that all they care about is perception, and considering every imaginable way to manipulate and distort it. Thus, given that “manipulative operatives” like the stock and oil PPTs; and gold Cartel; were able to recoup some lost ground last week, there was no reason to issue a “communique” featuring anything but vacuous platitudes.
That said, clearly all’s not well, as the Chinese stock market plunged again this morning – to nearly its lowest level of the year; which is probably why the PBOC not only resumed devaluing the Yuan the second global economic leaders hopped on their flights, but reduced bank reserve requirement ratio for the fifth time in the past 12 months. In other words, China’s economy – and as a proxy, the entire world’s – continues to collapse, “manipulative operative” actions notwithstanding. Thus, it responded in the same manner as it, and all Central banks always do; print money, and lower the world’s already loosest credit standards.
To that end, the reason things are coming apart so rapidly – politically, economically, and socially – is because the world is finally realizing this; and subsequently, taking action to protect itself. Which is probably why some of this morning’s top media headlines are as follows…
– “After €670 billion in QE, European inflation plunges to -0.2%, the lowest since it started”
– “The global run on physical cash has begun – why it pays to panic first”
– “Another crisis is certain, warns former Bank of England chief”
– “Kuroda’s NIRP backlash – Japanese interbank lending crashes, as Japanese banks have almost entirely stopped lending to each other”
Not to mention, those regarding the rapidly imploding fraud that is Wall Street…
– “Second tech bubble has burst, and here come the mass layoffs”
– “About that $1 trillion of distressed credit…”
– “Mind the Non-GAAP: Real S&P earnings are lowest since 2010”
…as emphasized by the hideous Chicago PMI activity index – validating last week’s equally recessionary PMI Service Index – just reported as I was editing…
That said, as ominously as such headlines portend for the world’s short- and intermediate-term political, economic, and financial outlooks, they don’t hold a candle to the devastating long-term issue portended by the weekend’s most important – and as usual, largely unreported – headline, that…
– “Japan hits demographic tipping point, reports first official population decline in history”
Most “analysts” – particularly in the short-sighted Western world – pay absolutely no attention to such matters; which frankly, are as, or more, impactful than nearly all other economic inputs. I do, however – which is why I first wrote of Japan’s “demographic hell” four years ago; and for that matter, America’s “deadly dollar demographics” two years ago. In fact, the first wave of baby boomers is turning 70 this year, commencing an economically crippling process of “Japan-ification” that will wash over the U.S., Western Europe, and many other regions in the coming decades.
That said, for all the (well-deserved) criticism I give him for his unfathomably ridiculous views on gold, Harry Dent is unquestionably the top demographic analyst around. I acknowledged as much last month; and am doing so again this morning, when his “affluent market is finally fading – and fast” article coincidentally published just as the Japanese population headline hit the tape.
In a nutshell, the most cyclone-like economic headwind the world has ever encountered – from the ongoing collapse of history’s largest, most destructive fiat Ponzi scheme – is being joined by an equally devastating tsunami of global spending reductions, for decades to come. As the world’s oldest country – with a median age of 47, 17 years above the global average – Japan is clearly the furthest down the road to demography-driven collapse. Which is why, for years, I have predicted it will be the first “first world” nation to experience 21st century hyperinflation.
However, many others are right behind it; most notably Germany, with much of Western Europe not far behind. Which is why the accelerating “migrant crisis” – in large part, the result of said fiat Ponzi scheme; is such a serious, and imminent, threat to the soon-to-collapse European Union and Euro currency. In other words, no matter what governments, Central banks, and anyone else attempts, the sweeping, all-powerful forces of demographics will sweep them aside like feathers in the wind. Throw in the historic pile of imploding worldwide debt – again, the direct result of said fiat Ponzi – and you can see how the global economic outlook has never been worse; nor the political and social outlook more terrifying.
Big picture trends are what the world’s smartest analysts focus on; and in our lifetimes, never have we seen such ominous big picture trends as the collapse of an unprecedented, global fiat Ponzi scheme; and the most perilous “demographic cliff” in recorded history. Not to mention, the twin “perfect storm” of exploding physical gold and silver demand; collapsing inventories; and declining supply – likely, for years to come. My friends, most of the world cannot source metal of any kind, at any price. And boy would they do anything to do so! Meanwhile, most of you still have access to gold and silver at historically “subsidized” levels. Which, based on the experience of 2008, will likely dissipate like a “fart in the wind” the second the next crisis emerges unfolds – which I firmly expect to occur this year.
To that end, let me just conclude by saying that WOW, has Bo Polny put his (self-proclaimed) reputation on the line! According to him, gold and silver are going to explode RIGHT NOW – with gold doubling in short order; and silver tripling, en route to triple digit levels by year’s-end. Let’s just say that I agree entirely with the fundamentals reasons why such moves might occur. However, I haven’t a clue whether the multi-century cycles he emphasizes have any validity. Which I guess we’ll know soon enough, won’t we? That said, if he’s not correct RIGHT NOW, I have little doubt he will be in the “not too distant” future.