When I made my first trip to Miles Franklin’s Montreal vault in December 2011, I received a neat gift from our partners at Brink’s Canada; a small, metal-framed notebook with the company’s logo – “Votre Partenaire de Choix.” Since then, I have brought it to the gym with me every morning, where I log notes on the day’s “horrible headlines” as I run on the Stair Climber – FYI, at the machine’s top speed for 50 minutes. The book encompasses essentially all I have witnessed during my time at Miles Franklin – written during the New York “pre-market” session when I am typically working out; i.e., just after 5:00 AM MST.
Under the Miles Franklin Newsletters new format, I typically write of just one or two topics daily; and thus, don’t feel as much pressure to “fill the book” as in the past. However, what I have seen in the past few weeks has been beyond ludicrous – demonstrating EXACTLY why I am so passionate about protecting my future with PHYSICAL gold and silver; and thus, I’ve found myself furiously writing throughout my workouts. Obviously, the financial aspect is the most important when considering how to allocate one’s assets. However, like anything else in life, such decisions are borne of the sum total of one’s experiences; including trends in the economic, political, and social arenas. They are obviously interrelated; and in sum total, if I had to give a comprehensive reason why I own PHYSICAL PMs, it’s because the once-great nation I live in is rapidly deteriorating; i.e., an “emperor with no clothes” becoming as much a political embarrassment as an economic leper.
Bill Holter wrote of the foreign credibility lost in America’s moronic handling of the ongoing “Syria crisis”; particularly following the pathetic political smack-down we received – at the G-20 meeting, no less – from our oldest rival, the Russians. However, how about the domestic credibility lost in the equally stupid decision by Boston’s Logan Airport to run a “9/11 drill” on 9/11, at the same time of day the WTC collapsed; featuring a burning plane on the tarmac of the airport where not one, but both planes that took down the towers took off from. The Boston Airport subsequently “apologized” for its insensitivity – and; recklessness; but that won’t erase the disrespect to families of the thousands that died on 9/11 – including hundreds of former colleagues of mine at Cantor Fitzgerald, where I worked on the 104th and 105th floors of the South Tower from 1993-1996.
I’ll get to today’s topic in a moment, but given today’s ridiculous events, I believe readers will appreciate a bit of real-time commentary as well; which, by the way, relates directly – from a financial perspective – to what I will be writing about the fraudulent GLD ETF.
Overnight, the only “newsworthy” items were Greece announcing yet another record high unemployment rate – having surged a whopping 0.3% in June alone. Meanwhile, Mario Draghi stated that given ongoing economic weakness, the ECB’s ultra-easy monetary policy will continue indefinitely. The result – higher Greek stock prices.
Simultaneously, South African President Jacob Zuma blamed the FAILURE of the chaotic nation’s labor market to recover on a weak global economy; without, of course, mentioning the crippling labor strikes that currently have more than half of South Africa’s gold mining idled. Worse yet, the South African Rand has plunged as much as the other “FRAGILE FIVE” nations of Brazil, India, Indonesia, and Turkey; i.e., by roughly 33% in the past two years – stoking the very inflation causing surging mining costs, and miner’s pay demands. The result – record high South African stock prices.
Meanwhile, the new Egyptian government extended the current “State of Emergency” (i.e., Martial Law) for another two months, due to the ongoing political, economic, and social chaos directly resulting from Federal Reserve inflation exportation. The result – higher Egyptian stock prices.
And finally, Japan’s Shinzo Abe stated that while he continues to support next year’s planned implementation of a nationwide 3% sales tax increase – to 8% – he wants to accompany it with a fresh $50 billion stimulus package; as always, funded by PRINTED MONEY, to be added to the dying nation’s QUADRILLION-plus Yen debt. For the record, this “consumption tax” was initially implemented in 1989 – i.e., the year of the great Japanese stock and real estate crash – to “boost” the post-crash economy. However, in the 24 years since, the nation’s economy has progressively worsened – to the point it has become the poster child of financial idiocy. The result – flat Japanese stock prices for the day, but up 70% since Abe unveiled his plan to double the money supply last winter.
In other words – just as I wrote yesterday regarding the experience of the Venezuelan stock market; the seeds of HYPERINFLATION are starting to be sown worldwide. It’s just a matter of time before this cancer rises all the way up the totem pole to suppose “first world” nations – and ultimately, the one possessing the world’s “reserve currency.”
Anyhow, the REAL economic weakness spoken of by South Africa’s Jacob Zuma the ECB’s Mario Draghi, and the Greek unemployment figures themselves manifested themselves in MSM lackey Yahoo! Finance’s “Top Story” this morning, “Shifting Fed view slows share rise, dollar dips.” The gist was that the weakening global economic outlook is “tempering” expectations of the amount of potential Fed “tapering” next week; you know the type of headline that would make freely-traded PM markets rocket higher.
And then you have today’s U.S. economic “data” farce, including two sets reported just after the 8:20 AM EST COMEX open. If you were watching CNBC – which I’m forced to do, as it plays on one of the gym’s TV’s – you’d see endless headlines of “FLAT IMPORT PRICES”; i.e., seeking to convince CNBC’s handful of remaining viewers that inflation is not a threat. Of course, what they didn’t report was that export prices declined by 0.5%, compared to a 0.1% decline last month and expectations of a 0.1% increase. In other words, U.S. companies are losing ground at a MUCH faster rate than international competitors – in large part due to “THE FINAL CURRENCY WAR” I wrote of earlier this year; and the accelerating global currency collapse I spoke of in three articles last week.
Worse yet, in a PR move nearly as offensive as yesterday’s Logan Airport “9/11 drill,” the BLS reported a 10% plunge in “weekly jobless claims.” However, aside from the fact that such claims no longer have ANY correlation to actual job creation – let alone, the quality of jobs reported – the BLS immediately caveated the report by disclosing that several States failed to report. In other words, instead of simply postponing the flawed – and as always, understated – data, they published it. The BLS official actually admitted the data did not reflect a material change in the Labor markets; but no matter, PAPER PM prices were slammed – while stock, bond, and oil prices didn’t budge.
Since gold and silver prices recovered in August to $1,430/oz. and $25.20/oz., respectively, they have been under RELENTLESS naked shorting pressure to “calm them down”; explaining ENTIRELY why they have since declined by the ridiculous percentages of 7% and 12%, respectively. In fact, the only reason they became technically “overbought” in the first place is because it takes such incredible “buying power” to move them up; which is typically the case when billions of naked shorts are constantly put in their path. And thus, the “specs” that – as always – take leveraged long positions against the deep-pocketed Cartel, have been forced to liquidate PAPER PM positions that never have – and never will be – backed by ANYTHING. The MSM tells us gold is down due to “easing Syrian tensions”; when in fact, said tensions have not subsided much at all – and may well catalyze a second “Cold War.” And oh yeah, despite the IEA today speculating on falling oil demand due to the ongoing “Emerging Market Currency Crash,” oil prices – at $108.70/bbl. as I write – are higher than they were on August 19th; i.e., the day of the alleged Syrian chemical attack.
As I will discuss momentarily, the Cartel’s attacks have reached spiritual levels in the past three weeks – taking only last Friday off following the horrible NFP “employment” report. That is, if “taking off” includes smashing gold and silver prices until the minute the report was published, and blatantly capping their subsequent rise. Anyhow, last night’s PM manipulation “takes the cake” – as even now, as I write at 12:00 PM EST – worldwide stock prices are essentially unchanged from yesterday’s closing levels, oil prices are at the same +1% level as when I awoke this morning, and Treasury bonds are higher despite the supposedly “great” jobless claims number. In fact, Treasuries were flat until the jobless claims data was reported – at which point they starting rising!
Anyhow, at exactly 2:54 AM EST this morning – right in the middle of the 2:15 AM EST – 4:00 AM EST London “pre-market” PAPER session that has hosted so many Cartel attacks over the past decade, including an astounding 74 in the past 83 trading days, “someone” decided to enter a market sell order for 2,000 contracts, worth $266 million, into the thinnest of thinly-traded market conditions. This is no different than what occurred in the May 2011 “SUNDAY NIGHT PAPER SILVER MASSACRE,” September 2011’s “OPERATION PM ANNIHILATION I,” December 2011’s “OPERATION PM ANNIHILATION II,” February 2012’s “LEAP DAY VIOLATION,” and April 2013’s “ALTERNATIVE CURRENCIES DESTRUCTION.” Their sole goal was to push PAPER prices down; as clearly, “someone” is desperate to prevent the recent PM recovery from gaining momentum. In fact – as documented by this morning’s fabulous Zero Hedge article Vicious Gold Slamdown breaks Gold Market for 20 Seconds, last night’s $15/oz. attack over a ten-second span was so vicious, it actually “NASDarked” the gold market for 20 seconds – i.e., shut it down. By the way, some of the images in this article are so dramatic, they will likely turn even the most jaded MSM follower into a believer that PAPER PM markets are in fact illegally, covertly suppressed. And this all occurred before the 8:20 AM COMEX open; after which, silver was hit (at 8:50 AM EST) for $0.35/oz., or nearly 2%, in a one-minute span, whilst not a single other market budged. Which brings me to today’s topic; i.e., yet another glaring, potentially game-changing disconnect between the FRAUDULENT paper and REAL physical markets…
As I have written ad nauseum for years, the COMEX is the world’s most corrupt financial market; that is, unless you consider its “partner in crime,” the London LBMA. Last week, I discussed how registered COMEX gold inventories have plunged by an astounding 75% in the past five months, leaving barely $1 billion of metal in deliverable form; and thus, threatening its very existence as a price discovery mechanism. Conversely, the GLD gold ETF – and its’ own “partner in crime,” the SLV silver ETF – are the world’s most fraudulent “tracking securities.” By now, it should be sufficiently clear they were created solely to divert retail investment away from real, PHYSICAL PMs into fractionally reserved, naked shorted PAPER PMs.
This week, the “up and up” Sprott Physical Gold Trust experienced – per its contractual terms – a $17 million redemption of PHYS shares for the underlying PHYSICAL gold. However, the same cannot be said for GLD, which apparently is “discouraging” – or in some cases outright refusing shareholders the physical redemptions they are entitled to.
Per the GLD prospectus, holders of at least 100,000 shares (worth $13.5 million at today’s prices) have the right to redeem them for the underlying physical bullion. However, given GLD’s close ties to the “banking Cartel,” such rules don’t appear to apply to the general public. Only a handful of individuals – and institutions – can accumulate that much stock; and those that did so with the intention of taking PHYSICAL delivery, they are finding that GLD is no more a “bullion fund” than a un backed COMEX gold contract. Grant Williams reported yesterday that colleagues are being refused delivery of PHYSICAL gold from GLD’s custodians at State Street and HSBC; and if that doesn’t scream physical shortage, I don’t know what does. All one needs to see is the below chart of surging “paper claims” on plunging registered gold inventories to realize just how close we are to the END GAME of paper market default. And once you have, I’m guessing you, too, will realize the time is now to protect yourself from the HYPERINFLATION that’s coming – with the little remaining PHYSICAL gold and silver still available for sale…