Yesterday, I wrote of the myriad instances of billowing financial and economic smoke – from which, fire is undoubtedly smoldering out of sight, soon to burst into view. Today, we’ll focus on the lies – or mildly put, propaganda – that pervade our world. Which, if you simply view them objectively – i.e, free from bias, or the misleading perception of rose-colored glasses – are easily seen through. Fortunately, even the best disguised lies are eventually exposed to the blaring light of truth; and clearly, the “unstoppable tsunami of reality” is causing more people to understand them each day.
But before I get started on this ugly topic, I can’t resist discussing something which, frankly, requires little – if any – commentary. To wit, this week’s “G-7” boondoggle – which cumulatively, cost taxpayers of the attending nations around $500 million. At it, the world’s most powerful people are supposed to discuss ways to improve the world’s (rapidly deteriorating) political, economic, and social environment. Well, it just concluded, and to show you just how dysfunctional; useless; and frankly, arrogant and mocking our so-called “leaders” are; here’ the gist of the only communique they offered.
“The top seven industrialized countries (Group of Seven, or G7)-whose carbon dioxide emissions total 25% of the world’s output-decided at a meeting in Germany today to phase out their use of fossil fuels by the end of this century.”
I’m not even going to comment on this stupidity; other than to say that the only way to survive the carnage these incompetents have wrought – and will unquestionably do so at an expanding rate as the global economy implodes – is to say the opposite of what they say, and do they opposite of what they do. And financially speaking, what they are saying is you should be investing in the stock and bond markets they have manipulated to all-time high valuations. Moreover, what they’re doing is printing money, raising taxes, and spending the proceeds to enrich themselves and the “1%,” at your expense.
Back to the aforementioned lies, the two key “propaganda themes” of 2015 unquestionably relate to “imminent Fed rates hikes” and an equally imminent Greek “solution.” To this point, it hasn’t really mattered what has actually happened on these fronts – regarding equity and Precious Metal prices – as these markets have been so thoroughly commandeered, a nuclear war could break out and the PPT would have stocks up and gold and silver down. However, the bigger picture incorporates the experience of all markets. And when it comes to commodities and currencies, “TPTB” are decidedly losing the war – as the economic carnage from the CRB Index plunging toward 2008’s spike bottom lows; and the average currency plunging by more than 40% in just three years; has plunged the global economy into its worst condition of our lifetimes. And as for unprecedentedly high equity prices and low Precious Metals prices, let’s just say that Newton’s law of what goes up must come down – and vice versa – has decidedly NOT been repealed.
And then there’s the bond market – which until two months ago was equally commandeered, taking global interest rates to their lowest rates in a thousand years. And this, despite the largest debt edifice in history – rising parabolically despite record low rates. Well, chalk up another victory for “Economic Mother Nature“; as care of the “tectonic market shifts” we discussed last month, rates are rising across the globe, despite plunging economic activity and, incredibly, some of the most aggressive bond monetization schemes yet (think, the ECB and Bank of Japan). Given said debt edifice, rising rates will destroy everything in their path – from stocks; to bonds; real estate; national economies; and sovereign and Central bank balance sheets. Which is why said QE schemes must continue to expand, per the definition of the Ponzi schemes they represent – which will only be more chaotic due to the explosive currency volatility we are witnessing; i.e., the “single most precious metal bullish factor imaginable.”
Regarding said “propaganda themes,” even I am astounded by how unabashed such lies have been – particularly regarding Greece, which doesn’t have a chance of receiving the €50 billion bailout it requires by month-end. Or ever, for that matter – as it couldn’t be clearer that neither the Greeks nor the European Union have an interest in sacrificing itself for the other. Not that such “sacrifice” would ultimately save anyone – as opposed to modestly kick the can a few more feet. However, in terms of today’s “market manipulation playbook,” if a new money printing deal can be agreed upon, the markets will be “loosened” enough to respond to new equity and fixed income goosing measures. Or so is the plan; which, as history teaches us too well, may not play out as perfectly in reality as on paper. And particularly in the physical gold and silver markets – which, “positive Greek news” notwithstanding, will understand too well that further, explosive money printing and debt accumulation schemes will only strengthen the case to hold one’s savings in the form of real money.
As for “imminent” Fed rate hikes, it’s getting to the point of sheer, abject desperation on the part of Janet Yellen and her merry band of money printers. Who, nearly a year after the so-called “end of QE,” will lose whatever remaining credibility they still have if they can’t figure out a way to translate the so-called “recovery” they’ve propagandized for the past two years into actually raising rates. Unfortunately, the crashing global economy; collapsing commodity prices; and a surging dollar (which Obama quite obviously deemed a “problem” at yesterday’s G-7 meeting) are making this very difficult to achieve. As is the catastrophic rise in market interest rates, that will only be “turbo charged” if the Fed is stupid enough to commence a rate tightening cycle – even if it’s only a “fake” tightening cycle, encompassing a single, trivial quarter point increase.
To that end, for all the hype about last Friday’s (blatant lie of a) “strong” jobs report, the market is not currently assuming a rate hike at next week’s FOMC meeting. Or, for that matter, in September, despite the incredible amount of propaganda attesting to such. No, as it turns out, the market’s “bet” on the first rate hike isn’t until December – which, in today’s wildly volatile political and economic climate, has as much “predictive value” as G-7 attendees predicting they will be fossil fuel free by 2100. In other words, propaganda notwithstanding, no one actually believes the Fed will raise rates this year (they won’t), which is why the accelerating global rate surge – clearly, for reasons other than plans of the supposedly “omniscient, all powerful” Central banks – is so terrifying.
Yes, the economic lies – from corporations, municipalities, Central banks, and sovereign governments alike – are as pervasive as the market manipulations “supporting” them. However, what matters far more is how pervasive the understanding of such lies is becoming; such as yesterday’s article from, of all places, MSM economic cheerleader Associated Press – which calculated that when excluding “non-recurring charges,” the real, GAAP-affirmed earnings of the S&P 500 over the past five years are an astounding $583 billion less than reported. Having worked as a Wall Street buy and sell-side analyst between 1996 and 2005, I’m well aware that such earnings manipulation is nothing new under the sun. However, it’s become far more egregious during today’s historic equity bubble, with the gap between earnings reality and fraud having expanded to a chasm. And with stocks trading at record high multiples excluding said charges, all the ingredients for the “stock crash to end all stock crashes” are in place.
And one final note on the topic of “lies, discovered”; regarding first, the government that invented economic book cooking; and second, the only government that cooks its data more. Regarding the former, by now you are well aware that the U.S. government just commenced its “GDP Plus” accounting scheme, of “double seasonally adjusting” data to make it look stronger. And incredibly, they are actually telling us they are doing so! “Sadly,” this fraud has already taken a mortal credibility blow – as, of all people, the New York Fed just put out a report debunking the San Francisco Fed’s initial claim that such “adjustments” are necessary.
Regarding the latter, China still claims its GDP is growing at a 7% annual clip – albeit, the slowest such rate in 35 years – despite all other indicators suggesting outright recession. Heck, even Wall Street knows it – as even China’s own PMI indicators say as much. More satisfying yet, the fraudulent Chinese “economic miracle” took another mortal blow yesterday – in a new research report claiming that, as is the case essentially everywhere else, the so-called “deflator” used to gauge real Chinese GDP growth has been serially overstated – by as much as two percentage points. Oh well, when it rains it pours. And symbolically, when the Chinese plastic umbrella maker’s stock that has risen 2,700% this year succumbs to the sheer force of such rains on its flimsy veneer, its collapse will serve as the poster child of history’s largest equity bubble collapse – and simultaneous Precious Metals surge.
Which brings me to today’s “happier” topic – of what Miles Franklin can do to not only safeguard your assets, but optimize your existing Precious Metals portfolio. Regarding safeguarding, one simply needs to trade a portion of their dying scrip for the time-honored wealth protection of physical precious metals. Which, care of the rapidly spreading TRUTH realization noted above, will soon be universally understood to be trading below the cost of production solely due to paper naked shorting and the surreptitious Central bank dishoarding of the large majority of purported physical holdings – from the world’s weakest hands, to the strongest.
To that end, Miles Franklin is one of the nation’s largest bullion dealers – competitive on price, unparalleled in customer service, and without peer regarding the free information disseminated in its blog. Take a look at our A+ rating on the Better Business Bureau website, and then look at any of our competitors. There’s a reason we haven’t had a single registered complaint in 26 years of business. And in the largely unregulated bullion business (except, ironically, for our home state of Minnesota), the importance of honesty and integrity cannot be overstated.
As for “what Miles Franklin can do for you”; aside from selling (and buying) Precious Metals, our brokers – on average, with more than 25 years of industry experience – are also experts in Precious Metals portfolio optimization. Thus, not only can we offer what we view to be the safest, most convenient and cost-efficient storage program in the industry – via our unique partnership with Brink’s Canada in Montreal (listen to this podcast with Miles Franklin’s President and co-founder, Andy Schectman, for details); but we can help you to proactively – and cost efficiently – optimize your current Precious Metal assets to take advantage of numismatic arbitrage, tax regulations, and, for example, today’s gaping valuation disparity between silver and gold prices.
All you need to do is tell us what you own, your approximate cost basis, and how and where you hold it. After that, we’ll do all the work; demonstrating how, at a minimum of cost, we can help you optimize your holdings to take advantage of what recent Cartel manipulations price movements have caused, in light of an increasingly bright Precious Metals future. To that end, I taped this podcast seven weeks ago with Andy Schectman – titled “swaps, trades, and repatriations”; in which he discusses, in great detail, how such “win-win” trades can be effected – and how Miles Franklin can make them happen.
I mean, what harm can there be to simply asking? Just give us a call at 800-822-8080, and we’ll be happy to give you a free consultation on all things Precious Metals – from buying and selling; to Precious Metal IRAs; tax, numismatic, and gold/silver arbitrage; and storage, of either new purchases or the “repatriation” of existing PM holdings to our Brink’s vault.
Andy: Had posted this in comments for Bill’s latest article as well, but posting here for intention of more people seeing it.
Did COMEX Just Receive A Physical Gold Bailout From The Feds?
Yes, I wrote of it today.