Friday was a rare “quadruple witching” day – in which stock options, stock index options, stock index futures, and individual stock futures all expired simultaneously. Consequently, trading volumes were elevated – and as usual, market movements sharp. Given the omnipresent PPT, which maniacally prevents equities from gaining material downside momentum, it was nearly guaranteed it would be a significant “up day”; yielding dramatic “short-covering” in stocks, bonds, oil, copper, the Euro – and even gold and silver. However, with the obvious exception of Precious Metals – which according to Andrew Maguire, are now “permanently backwardated” – Friday’s surges were completely unrelated to fundamentals.
Obviously, the various “manipulation operatives” won’t stop trying to move markets. However, they clearly have lost control of most commodities and currencies – and for the most part, sovereign bond yields (which continue to plunge, providing the “most damning proof yet of QE failure“). In other words, all that stands between 100% global recognition of the expanding, irreversible economic collapse are the manipulation of “last to go” markets like the “Dow Jones Propaganda Average” and paper gold and silver. Heck, even Ed Yardeni, a career Wall Street “strategist” – with as much incentive to pretend markets are freely traded as anyone – admitted Friday “This is not investing. It’s all about central bankers, as these markets are all rigged. I just say that factually…I love these central bankers, as they’ve been very good to the stock market.”
Now that such “noise” has been addressed, let’s discuss what’s going on in the real, actual world; which, whether you believe markets are freely traded or not, is clearly “whistling past the graveyard.” Frankly, it’s utterly incomprehensible that anyone of sound mind could believe financial “markets” could be “trading” where they are given the terrifying, rapidly expanding political, economic, and monetary developments dominating the headlines, both here and overseas.
For instance, “that other Achilles Heel” of plunging crude oil prices, which is relentlessly destroying jobs, capital expenditures, earnings, balance sheets, and sovereign budgets – not to mention, expanding geopolitical tensions and collapsing currencies. Here in North America, rig counts have plummeted at their most rapid rate in 30 years; yet, production remains at all-time highs, and rig counts (and jobs) have far more to decline before reaching long-term, pre-shale bubble averages. To that end, when one considers that close to 20% of all new U.S. office building construction is in Houston, it becomes painfully obvious just how much damage the U.S. economy – at best, flat-lining as we speak – is about to endure; let alone, when North Dakotan tax incentives (to increase production) kick in this June, just as U.S. crude oil storage is projected to reach full capacity. Worse yet, the Middle East rig count is surging to new highs – as the aforementioned budgetary deficits are desperately being countered with increased oil production, at increasingly lower prices. Just Thursday, the Kuwaiti oil minister confirmed what I have been practically shouting for months – i.e, OPEC production cuts are not an option – in claiming “we don’t have any other choice than maintaining production, as we don’t want to lose market share.”
Consistent with the tripartite horrors addressed in last week’s “oil, Greece, and the Fed,” the “Greek Tragedy” is going downhill more rapidly than an ice cube on a Vermont ski slope. In true MSM form, Friday’s meetings between Alexis Tsipras and the most important politicians in Europe – including Angela Merkel of Germany and Francois Hollande of France – were hailed as “successful”; when in fact, not a shred of “progress” was made. In fact, all that was actually “agreed” upon was that Greece would submit more details of the comically vague – and completely untenable – “reforms” the Euro Group wrote for them to stave off the inevitable “Grexit” four weeks ago. Worse yet, both sides continued to viciously snipe at each other – including Tsipras saying no new reform proposals would incorporate “austerity.” However, as Greece needed €2 billion by Friday night to avoid default, the Euro Group published a pathetic press release claiming “progress” was made, as an excuse to give Greece the €2 billion – with printed money that Greece simply used to pay them back. I mean, how much better can Ponzi scheme be defined?
To that end, the Fed’s embarrassingly childish handling of the removal of “patient” from Wednesday’s policy statement was actually “up-staged” by the infantile transparency of Friday’s Greek “agreements.” And again, what’s most horrifying about these issues is that the fate of billions of people – financially and otherwise – rests in the hands of these morons. Like Angela Merkel, for example, who the MSM spins as “conservative,” when her fiscal policies have been as suicidally dangerous as the ECB’s monetary policy – which, what do you know, is largely guided by Germans. She was dead right when three months ago – with the Euro/dollar exchange rate at 1.23 versus 1.08 today – she said “if the Euro falls, Europe falls. However, what she clearly didn’t – and never will – understand is that Europe would have done just fine without the Frankenstein experiment the Euro has been; when, at the global economy’s peak in the late 1990s, a handful of misguided, financially motivated politicians decided to merge the finances of nearly two dozen diametrically opposed cultures. And worse yet, said “union” was completed despite nearly all nations out of compliance with the strict financial requirements imposed by the Maastricht Treaty (including Germany) – just months before the U.S. “tech wreck” commenced a 15-year plunge into global economic hell.
Just before Friday’s pathetically choreographed meeting, Merkel reiterated her fears of Euro collapse – and expectation that “no quick solution” was likely. And yet, just as on the February 20th “four month extension” deadline date, “progress” was magically reported less than 24 hours later, even though the average ten year old can probably see through this ruse. Frankly, such patronization of the masses isn’t a heck of a lot different than the U.S. BLS publishing a “5.5% unemployment rate,” and expecting the world to believe it – despite their own data being so blatantly flawed, the same ten year old could see through it. Oh well, I guess we’ll just have to wait and see when said “four month extension” expires this summer – or perhaps, a lot sooner; when inevitably, Greece runs out of money; and either its politicians, citizens, or both run out of “patience.” To which we say to anyone holding their wealth in Euros, “good luck with that.” Which, sadly, will be remembered as a so-called “gold standard” compared to the currency conflagration waiting next in line, when numerous European nations to their former, potentially hyper-inflating currencies.
And then there’s the Federal Reserve, which surely will be consumed by the collapsing global economy before Janet Yellen is afforded the chance to retire into obscurity like Helicopter Ben Bernanke; or, like “Maestro” Greenspan, to viciously attack her successors in a vain, pathetic attempt to distance herself from the carnage she fomented.
According to CNBC’s Friday morning headline – again, I kid you not – the “Fed removed ‘patient,’ but is in no hurry to raise rates.” Which, frankly, is the logical equivalent of saying one is no longer hungry, but desperate for food. Not to mention, as the current FOMC voting committee is a veritable “all-star team” of monetary doves – led by Whirlybird Janet, of course, but supplemented by hyperinflation hopefuls like Charles Evans of the Chicago Fed, who on Friday said “the central bank should adopt a looser policy when there is uncertainty – and in the current context, a delayed liftoff is optimal.”
Yes, the “current context” of data point after data point – including the Fed’s own economic model, currently signaling ZERO first quarter GDP growth – depicting an economic environment on a par with the 2008-09 mega-crisis; such as, to quote a few of Friday’s headlines, the “biggest global earnings plunge since Lehman”; “Philly Fed Index signals worse margin compression since Lehman”; “Zillow says underwater homeowners here to stay”; and “Global Cooling Alert: Iron Ore keeps plunging, to $57/Ton, while supply surges and demand withers.” Throw in the economic decimation – to both the U.S. and China – of the surging U.S. dollar, and it doesn’t take a rocket scientist to realize “QE to Infinity” is not only guaranteed, but likely, about to re-take center stage in the so-called “recovering” States of America – as the so-called “tapering” Federal Reserve is forced to unveil QE4. And speaking of rocket science, if I hear the propaganda gem “lift-off” to discuss the mythical possibility of a quarter-point rate hike one more time, my head is going to explode.
Meanwhile, as such political, economic, and monetary madness continues, global Precious Metals demand continues to rise, and supply to fall; or better put, plunge. That said, here in the States, a combination of unprecedented price suppression and relentless propaganda has slowed gold and silver demand to a crawl, a trend that has been significantly exacerbated by the global flight to the dollar – NOT, by the way, due to its superiority as a currency, but the superior liquidity it affords as history’s most terrifying, world-destroying economic and monetary meltdown unfolds. Which, of course, includes dollar-destroying policies like ZIRP to infinity – and inevitably, QE4.
In time, TPTB will lose control of “last to go” markets like paper gold and silver. Perhaps, a very short time, given the aforementioned global demand and supply trends; let alone, as the London gold Fix is usurped by Eastern entities. And when they do, people will be kicking themselves for not having protected themselves with the only money the world has ever known – which they could have bought today, at prices well below the industry’s cost of production; let alone, its long-term sustainability.
For those that see the writing on the wall now – i.e, while it’s not too late, as product is still available at historically inexpensive prices – we urge you to call Miles Franklin at 800-822-8080, and give us a chance to earn your business. Remember, the Miles Franklin Blog, which in my (admittedly biased) view is the best economic blog in the industry, is not only published at great expense, free of charge to the public, but puts out as much quantity as it does quality. And thus, we only ask you to consider this when choosing who to do business with. Well, this, and the fact that we have been in business for 26 years, holding an A+ Better Business Bureau rating, with not a single registered complaint since opening our doors in 1989. Our brokers have more than two decades of industry experience – in most cases, three – and care as much about your financial well-being as blog authors David Schectman and Bill Holter; and of course, myself.
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