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In the words of the great Kelly Bundy of Married with Children, “the mind wobbles.”  NEVER has America been so dysfunctional, and NEVER has the entire world been so hopelessly tethered to futility.  Historically, “empires” have decayed when populations grow “fat and lazy.”  Today, however, the ENTIRE WORLD is doing so – care of the dollar-anchored fiat currency system that is so comprehensively destroying it.

On the surface, the lethal combination of MONEY PRINTING, MARKET MANIPULATION, and PROPAGANDA has so badly distorted perception, the average person has either “shut themself off” or morphed into a blithering fool.  Speaking to my parents is no different; as call it age if you like, but they have not the slightest interest in current events – or frankly, knowledge of them.  The debt ceiling?  Government shutdown?  Syria?  Obamacare?  Not a clue, although they’ll happily say Obamacare is a “good idea” because everyone should have health insurance.

Yes, everyone should have whatever they want.  However, should doesn’t pay the bills; and in a helplessly BANKRUPT nation – not to mention, world – the absolute WORST idea imaginable is putting the government in charge of the gargantuan, complex healthcare industry.  Despite pathetic pro-Obamacare rhetoric, even the Congressional Budget Office estimates it will directly cost a quarter trillion annually to administer.  Of course, the CBO has woefully underestimated every cost it has ever forecast; and that doesn’t even include the indirect ramifications of this lunacy.  Conversely, to the average person, it matters not.  To them, Obamacare is just one of dozens of wild goose chases attempted by our nation’s “leaders” each day; few – if any – of which draw even a modicum of personal interest.  Higher taxes?  No problem.  Fewer doctors?  No problem.  Soaring insurance premiums?  No problem.  So as long as no money down iPhones are available for non-stop texting, reality television dominates the airwaves, and all-you-can-eat buffets remains cheap, “all’s well.”

Today, as Jack Lew whines to Congress about the dire ramifications of a debt ceiling breach, the Dow is up 200 points on hopes of a deal to again “delay” the debt ceiling – this time, by a whopping six weeks.  In other words, yet another “license to print”; and in the eyes of the ENTIRE WORLD, another complete abdication of fiscal responsibility.  Even though absolutely NOTHING has been formally discussed, we are told the “market” is excited about the prospect of America reducing its credibility further, by “kicking the can” another six weeks.

Such a deal wouldn’t bring furloughed workers back, improve the nation’s financial situation, or bring any reduce financial obligations; and with interest rates again on the rise, the overall economy will be injured further.  However, we’re told the “free market” is juiced about a proposal to delay the debt ceiling breach six weeks; just as we’re told that this is somehow bad for gold – in the EXACT same manner as on 92 of the past 103 trading days at the PAPER markets’ open.  Heck, aside from the daily visit from the 2:15 AM naked shorting algorithm – and the current, relentless silver “line in the sand” at $22/oz. – we were treated to a $16/oz. WATERFALL DECLINE at 8:30 AM; get this, just after it was reported that jobless claims spiked from 308,000 last week to 374,000 this week.  Whether this bastardized data was “glitched” by the ongoing California and Nevada computer system upgrades is immaterial; as in the big picture, what sentient being would believe gold would go “no bid” upon the release of such data?  As I write, the “battles” for $1,300/oz. and $22/oz. are raging; as TPTB desperately attempt to stave off the inevitable STAMPEDE from fraudulent fiat to real physical money…

24hr Gold Silver 10-10-2013 959 951

And by the way, aside from being WELL BELOW the all-in cost of production of EVERY MINING COMPANY ON EARTH, the VERY KEY ROUND NUMBER of $1,300/oz. is proving to be quite the technical support level; or alternatively put, a “REALITY line in the sand.”  Since June’s “taper smash,” gold has recovered from all six Cartel attempts to push it below $1,300; and with essentially ALL fundamental factors favoring higher prices, each day that passes above $1,300 will only strengthen this “floor” further…

$GOLD 10-9-13

Meanwhile, the list of economy bearish – and PM bullish – events continues to multiply, worldwide.  Today, we learned that back to school PC sales have fallen to their lowest level since 2008; following last week’s realization that U.S. “economic confidence” plunged at its “fastest pace since Lehman.”  Sometimes, such headlines suggest “financial karma” is guiding my writings; as I have been pondering a piece titled “The Worst since Lehman” for quite some time.  And thus, today’s article; as you can imagine, comparing today’s economic circumstances to those of the world’s worst economic calamity since the depression.

Let’s just start with monetary policy; which presumably, would become at least slightly more hawkish if indeed the economy were “recovering.”  Yesterday’s FOMC Minutes publication, which I wrote of yesterday afternoon, only validates the Fed is utterly “boxed in”; and despite typical MSM misdirection, there is not a CHANCE that the “ultimate dove,” Janet Yellen, would even dream of commencing her Chairmanship by turning tail on a career-long obsession with money printing.  As for the rest of the world, the printing presses are running full out.  The Bank of Japan last week re-affirmed its commitment to double the Yen money supply in just two years, while the ECB stated it would use “all available tools” to prevent rates from rising.  And today, the Bank of England statement read no differently than in 2009…

The Bank of England offered no surprises, leaving the size of its bond-buying program unchanged and keeping its key lending rate at a record low of 0.5%, where it has stood since March 2009.  The central bank’s Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($598 billion). The central bank has said it aims to keep rates low at least until the U.K. unemployment rate drops below 7%, which it doesn’t expect will happen until 2016.

Market Watch, October 10, 2013

Regarding the housing market, for all the HYPE about “recovery,” the Case-Shiller index remains 25% below its “pre-Lehman” highs; with millions of U.S. homeowners having suffered the detrimental effects of having their mortgages pushed underwater.  The only factors that have pushed it higher have been Fed MONEY PRINTING and Wall Street VULTURE INVESTMENTS; and now that interest rates have barely ticked higher (from RECORD LOW levels), the housing market is again rolling over.  And by the way, most of Europe’s housing markets are below the 2009 lows.

Economically, the fraudulent, politically influenced “unemployment rate” reported by the BLS may have ticked lower, but the Labor Participation Rate – i.e., a much broader, more reliable measure of labor market health – has fallen to a 35-year low, nearly three percentage points below the pre-Lehman level.  As for the rest of the REAL economy, data point after data point says the same thing; i.e., ‘the worst since 2009.’  And not arbitrary “diffusion indices” like the highly volatile, statistically insignificant “PMI” reports; but REAL data like durable goods orders, retail sales expectations, economic confidence, and service employment.

As for the global financial system, it’s magnitudes worse than 2009.  With RECORD unemployment in Europe, multi-decade high REAL unemployment in the U.S. and stagnant economic growth the world round, it is difficult to make the case that ANYWHERE is better off than in 2009; other than in government-supported stock and bond markets, of course.  Currencies the world round have been collapsing; bankruptcies surging; and, of course, debt is off the charts (although in the chart below, it appears to have “leveled off” due to the “extraordinary measures” delaying the realization of $300 billion until the debt ceiling is raised)…

Federal Debt Total Public Debt

Only exponentially growing MONEY PRINTING has kept the entire Ponzi scheme from imploding; which, by definition, it eventually MUST.  And thus, anyone believing QE will be even remotely tapered will likely be disappointed; and more likely, shocked when it not only is not tapered, but actually expanded

St Louis Adjusted Monetary Base

If one simply looks at the data, it becomes clear that the ONLY difference between today and 2009 is stock markets have been lifted by relentless government support.  Worldwide, economic activity is vastly worse than 2009; and in some places, is accelerating downward.  Meanwhile, unfettered MONEY PRINTING has addicted the entire world to ultra-low interest rates, which can NEVER be allowed to rise.  Yet, with fewer and fewer buyers of the sovereign bonds that “set” such rates, the necessity of Central bank monetization has never been higher.

Such circumstances define the bullish case for precious metals, particularly given that maniacal central bank intervention has pushed them WELL BELOW the cost of production.  Again, you must judge which way the world is headed; and subsequently, how to PROTECT your assets.  To me, the choice has been clear for years.  How about you?