Wow, what a crazy turn of events! To start, we saw perhaps the biggest one-day manipulative tsunami in financial market history; with the PPT and “oil PPT” turning the horrific results of the Doha oil producers’ meeting – i.e., the “most overhyped, non-event in financial history” – into a cause celebre, by reversing overnight stock and oil losses the second the NYSE opened. And in prototypical, Fed-like fashion, propagandizing of the “next” oil producer meeting in June, as the reason all will be fixed in the historically oversupplied oil market. Not to mention, the BOJ’s own, comically transparent manipulations (given that it already owns more than half of Japanese stock ETFs); when, following one of the worst earthquakes in Japanese history, they reversed the entirety of yesterday’s 3.5% Nikkei loss, this morning.
As for gold and silver, the Cartel used every manipulative tool in its arsenal to “prove” Doha was NOT a “deflationary event,” and NOT a reason to own safe haven assets.
The only problem is, it was a deflationary event, and was a reason to own not just any safe haven asset, but history’s longest-lasting, best safe haven assets. Which is probably why this morning, with no major market moves occurring simultaneously, gold again bounced sharply off its 50 DMA of $1,234/oz (prototypical “Cartel Herald” capping at “2:15 AM” notwithstanding”); platinum regained $1,000/oz; and silver, BAM!, surged more than 4% overnight.
In the process, dramatically shattering Cartel resistance at the “right shoulder” of the massive, nine-month “reverse head and shoulders” I discussed last week. And this, after the Cartel added to its massive “COT” short position last week. Of which, in March 28th’s “about those COTs,” I vehemently refuted the perpetual PM fear mongers, by claiming such shorting will NOT work, as we are now, after four long, Cartel-suppressed years, in a dollar-priced PRECIOUS METALS BULL MARKET!
In silver’s particular case, it shouldn’t surprise anyone one bit; as, per what I suggested was imminent in March 7th’s “Admiral Sprott rides again!,” the physical silver market is so tight, even a modest PSLV stock offering had the potential to wreak Cartel havoc. Which it decidedly did; as since the measly $86 million offering was priced April 8th – i.e. the “major, major blow to the Cartel” – silver has surged from $15.05/oz to this morning’s $16.90/oz, its highest level in nearly a year. And this, as U.S. Mint silver Eagle sales continue to rocketing skyward, despite the Mint’s (unconstitutional) “rationing.” And oh yeah, the entire world learned last week that the PM markets are in fact manipulated – when Deutsche Bank followed UBS’ lead from two years ago by admitting it!
Meanwhile, on a day featuring headlines such as “North American freight shipping down again”; “U.S. business sales still falling”; “China ocean freight index collapses to record low”; “IBM reports lowest revenue in 14 years”; “Goldman earnings crash more than 55%, in worst quarter since 2011”; “Obamacare exodus continues, as United Healthcare exits four states”; “Q1 venture capital financing plunges 25%, valuations tumble”; “housing starts unexpectedly plunge”; and even “Netflix crashes, after slashing international forecast”; I thought I’d revisit an article I wrote last October, titled the “worst global economy of our lifetimes.” And with it, it’s “twin sister” article from December, the “worst global GDP recession in 50 years.”
The former, written when oil and the CRB Index were still $47/bbl and 198 – vs. $40/bbl and 175 today, was more qualitative in nature. Although clearly, the all-time low in the Baltic Dry Index; the lowest Chinese GDP reading in 30 years; and a slew of other related factors supported its conclusion. The latter, however, was purely quantitative, in highlighting that, in dollar-priced terms, global GDP had fallen to levels last seen in the 1960s. Since then, the dollar has had a modest 5% decline, but global GDP has unquestionably fallen by at least that amount, making the article’s title as fresh and relevant as ever. All that, before I saw yesterday’s article from Lance Roberts, “the Great American Economic Myth – Real GDP gains since 1999 even lower than the 1930s.”
Yes, the lowest real gains since the 1930s, with the post-1999 period representing the lowest 17-year growth rate in U.S. history! And this, despite the BEA, or Bureau of Economic Analysis, goosing GDP with non-productive “output” like goodwill, and “double-seasonal adjustments”; whilst the BLS, or Bureau of Labor Statistics, understates the inflation “deflator” like never before. In other words, even the lowest real gains since the 1930s; and the lowest GDP growth rate in U.S. history; are dramatically overstated. And worst of all, the trend is decidedly down, as the entire world is in the same boat; featuring historic industrial overcapacity; unprecedented, parabolically rising debt; and broadly collapsing currencies Which is why history’s largest fiat Ponzi scheme MUST continue to supply exponentially rising amounts of printed money – and not just zero, but negative interest rates. Prompting the “final currency war” to go nuclear, and Central banks to destroy everything in their path. Except, of course, physical gold and silver – which are about to regain their long-standing, unchallenged roles as the “once and future monetary kings.”
P.S. And I forgot all about China establishing the “Shanghai Gold Fix” as of today! Could it have anything to do with today’s price action? Perhaps, only time will tell.