Before I get to last night’s “surprise” news of a third straight Yuan devaluation, let’s get the “freely-traded markets” pink elephant out of the way. As, if yesterday didn’t convince you how blatant government-led efforts to mask their hideous, catastrophic failures with relentless, in-your-face market manipulation have become, nothing will. Then again, we’re only in the “first inning” of what will likely be an endless extra inning “game” of global economic collapse. And trust me, when the entire world shortly realizes that “QE” – not to mention, ZIRP, NIRP, and every money printing euphemism imaginable – are not just a “temporary fixes,” but inexorably expanding, infinitely irreversible policies, even the most financially ignorant will realize that what have been masquerading as “markets” for the past decade have been nothing more than cluelessly administered “policy tools.” And whilst the odds of said “policy” maintaining nominal targets in paper markets are reasonably high, in real terms the losses will be devastating. Let alone, physical markets like gold and silver – where such draconian, society-destroying efforts’ “Achilles Heels” will be completely, and mercilessly, exposed.
To wit, yesterday’s “perfect storm” of horrifying political, economic, and financial news – stirred to a boil by the second Yuan devaluation in two days. To start, the CRB Commodity Index ominously remained below its 2008 spike bottom low – led by relentless weakness in crude oil, whose rapidly expanding glut is approaching that of 1998, when WTI crude plunged to $10/bbl (I remember that horror too well, as a budding oilfield service analyst living in New Orleans at the time). Additionally, global stock markets plunged yesterday, on well-founded fears that the “final currency war” had gone nuclear – with European indices down 3%-4%; Asian markets (including China) 1%-3%; and even the “Dow Jones Propaganda Average” down 1.5% at the open, with the NASDAQ plunging below the psychologically important 5,000 level.
Worse yet, news that German financial leaders believe the proposed $95 billion Greek “bailout” proposal is woefully too low (which I vehemently stated last week) caused PIIGS bonds to crash at their close, nearly taking National Bank of Greece’s stock to a new all-time low. Worse yet, U.S. “high-yield” – i.e., junk – bonds crashed to their lowest level since 2011’s Global Meltdown II, creating their widest disparity versus (government-support) stock markets since just before the 2008 crash. Even Precious Metals, capped as they were (can you say 12:00 PM EST “cap of last resort?”) were holding up well, having avoided the Cartel’s prototypical “2:15 AM” paper raids for the first consecutive days in the two-and-a-half years I have been formally tracking the phenomenon. In a nutshell, not a shred of positive – or even hopeful – news or trading activity was to be found.
Which is why it was so “miraculous” that the same “dead ringer” algorithm I have discussed for three-and-a-half years – i.e, equities bottoming right after the Fed’s 10:00 AM EST “open market operations,” and steadily rising for the remainder of the day – “magically” arrived to save the day. Heck, the manipulation was so hot and heavy yesterday, across-the-board, that even the PBOC was forced to overtly “stabilize” the “offshore” (non-deliverable) Yuan’s fall – which care of smart, soon-to-be proven correct traders speculating on further devaluations, was falling “too fast” for its liking. I mean, how dare anyone bet on additional devaluations – when after Monday night’s “surprise” devaluation (to everyone but me), the PBOC deemed it a “one-off adjustment”; and after Tuesday’s second devaluation, claimed it would not be a “continuous devaluation process.”
Better yet, on Wednesday evening, offshore Yuan futures were again intimating an imminent devaluation – just as they had the prior two nights – with Precious Metals solidly holding onto their day’s gains. And then, when the inevitable third devaluation was announced – of an additional 1.5%, taking the three-day total to nearly 5% – Precious Metals were attacked in the identical fashion as on Monday and Tuesday nights!
In other words, despite being perhaps the most violently gold and silver bullish development imaginable; and both metals reversing the prior two evenings’ Cartel raids “losses” to end the New York trading day solidly higher, we’re supposed to believe that this time around, “traders” were still perceiving such developments as “PM bearish.” I mean, at some time, one just has to simply say, you’ve got to be kidding me! Not to mention, when for the third time in 48 hours, the PBOC accompanied such actions proclaiming they were “finished” – in this case, claiming the Yuan’s “adjustment” was “almost completed”; the Yuan will remain a strong currency in the “long-term”; and reports suggesting the PBOC desires a 10%+ devaluation are “groundless.”
That said, all such actions are “accomplishing” are the acceleration of China’s economic implosion. And, of course, the global currency wars that will inevitably destroy history’s largest, broadest, most destructive fiat Ponzi scheme. That is, for the handful of remaining – for the most part, “first world” – nations whose currencies haven’t already been destroyed, as global, trade-weighted currency indices are already at historic lows. In other words, the handful of Central banks whose “bigger, badder” printing presses have thus far exported the majority of the inflation they create to the world’s “weaker links.” Which, now that they have been destroyed, will be able to more effectively export said inflation back. And now that China has plunged the currency wars into the thermonuclear phase – prompting what will likely be an immediate, draconian, global money printing response – it shouldn’t be long before the financial “hell on Earth” we have long anticipated arrives full force.
To wit, not only is the dollar surging anew this morning – as the “liquidity vacuum” I warned of nearly two years ago morphs into a gaping, economy-destroying “black hole” – but commodities are in full-fledged free fall; led by WTI crude, which just plunged below March’s low of $42.35/bbl, putting the 2008 spike bottom lows in the mid-$30s (and the end of what remains of the U.S. energy industry) into the cross hairs. Not to mention, QE4 – as comically, even Zero Hedge is still drinking the propaganda Kool-Aid, in actually suggesting today’s “in line” retail sales number suggests a September “rate hike” remains on the table. I mean, ENOUGH ALREADY with the “tapering”; “recovery”; and “imminent rate hikes”; as not only did the former two never occur, but the latter could not be more “off the table” if it tried – as if it ever was “on the table” in the first place!
To the contrary, I have never been more confident that the “big one” has commenced. And now that stocks, commodities, currencies, and economic indicators are simultaneously plunging – in an environment of record high debt, record low interest rates, and rampant currency devaluations – it boggles the mind how anyone can believe the inevitable “Yellen Reversal,” in which QE4 and/or NIRP are announced, isn’t on the verge of violently arriving on the scene. And by the way, someone should send Zero Hedge this morning’s reports of exploding business inventory and collapsing import and export prices, if “Tyler Durden” really wants to continue playing this silly “will they or won’t they” game regarding the FOMC’s upcoming September 17th meeting. Frankly, the only remaining question in my mind is whether they will use the occasion to make their first intimations of soon-to-come “easing” measures, or be forced by plunging markets to launch QE4 then and there!
I mean, geez, this morning alone, the Japanese Finance ministry flat out stated “If [the Chinese move to devalue to yuan] suppresses Japanese external demand too much (my comment, it WILL), the BOJ may further relax monetary policy.” Meanwhile, the ECB hinted at just as much, when the “minutes” of its last meeting espoused “Chinese financial developments could have a larger than expected adverse impact (on European economic activity and inflation), given China’s prominent role in global trade.” In other words, two of the largest Central banks suggested they are watching the PBOC’s actions intently, with the Japanese explicitly threatening to retaliate. And as the U.S. government has already labeled China, ironically, a “currency manipulator” – whilst the White House itself, equally explicitly, complains of the adverse economic impact of the strong dollar – it’s difficult to believe the Fed will act any differently, particularly when the aforementioned “headwind” of collapsing commodity prices rapidly destroys what’s left of the morbid U.S. economy.
I guess we’ll have to wait until tonight to see if four times will be the “charm” that reverses said collapsing commodities and exploding currency wars. Which, of course I say facetiously, as those horses are long, long out of the barn. In other words, the “Big One” has decisively commenced – with all that remains to be seen being the how and when the transformation from market manipulated “stability” morphs into the all-out fear “Economic Mother Nature” wreaks when her forces of reality overcome those of the world’s rapidly weakening Central bankers. And equally importantly, when real money regains its global leadership role of the global “monetary mindset”; which, based on what I wrote in last night’s SPECIAL SUPPLEMENT, “silver supply a “1.5 or 2.0 of ten” – and one of the potentially last great silver investment opportunities; not to mention, Steve St. Angelo’s equally well-timed “the coming market crash will wipe out global silver supply”; may well be arriving as we speak.
To that end, we cannot be more emphatic that the time is NOW to protect yourself from what’s coming; to which, we humbly ask that if you are interested in buying, selling, and/or storing Precious Metals, you simply give us a call at 800-822-8080, and “give us a chance” to earn your business.