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Yesterday, we recommended Precious Metal holders – in our view, the true “smart money” – to relax, given the dramatically inferior intellects and conflicted motives of TPTB.  Today, we take such “analysis” further, in demonstrating an even more compelling reason to weather the current “manipulation storm.”  Better yet, we’ll make our point with the minimum of dialogue; once again, proving the time-tested adage that a picture tells a thousand words.

However, before we go there, we feel compelled to summarize the past 24 hours’ “interventions” again; to further comfort PM holders that what the “markets” are saying are nothing more than what TPTB are telling them.  A strategy, we might add, that has failed every time it has been attempted over countless centuries.

To start, just how much more validation do we need for our characterization of a 1.0% decline on the “Dow Jones Propaganda Average” as the “PPT ultimate limit down?”  As usual, that was where yesterday’s decline was halted – just as 99% of all gold rallies are capped at plus 1.0%.  As you can see below, the PPT has become so brazen in recent months – as “recovery” propaganda is stretched to the limits of believability – they have actually bulled stocks to new highs despite a gaping dislocation with the performance of junk (sorry, “high yield”) bonds; i.e., the most economically-sensitive segment imaginable.

Zero Hedge

Next up, those “mysterious surges” we predicted the Fed would “create” when the benchmark 10-year Treasury yield threatened to breach 2.50% to the downside; just as gold and silver’s unrelenting “mysterious plunges” each time they threaten the Cartel’s $1,300/oz. and $20/oz. “lines in the sand,” respectively.  To wit, for the third straight day such “mysterious surges” in the 10-year yield failed until voila, it suddenly spiked again this morning – in the wee hours, with no other markets moving.

Green Graph 5-21And don’t forget our incessant commentary of how the Bank of Japan is desperately defending Nikkei 14,000 for the same reason the Fed is guarding 2.6% 2.5%; i.e., to prevent speculation that Abenomics (and for the Fed, QE) has been a failure.  Commencing today’s “pictures” theme, we simply present Exhibit A.

Nikkei 225

As for PM’s, what part of yesterday’s DLITG or “Don’t Let it Turn Green” algorithms could be more obvious; replete with COMEX opening plunges and “Cartel Herald” caps at exactly the 10:00 AM EST “key attack time #1” and 12:00 PM EST “cap of last resort” – in gold’s case as it again attempted to breach the aforementioned $1,300 “line in the sand.”  As for today, yet another equity futures ramp and gold waterfall decline at exactly the 8:20 AM EST COMEX open; despite absolutely zero news and the only significant market mover being crude oil which is again nearing multi-month highs.

3 Charts

Actually, there was a bit of news overnight but wouldn’t you want to sell gold – and buy stocks – when Russia test fires nuclear missiles and announces a whopping 900,000 ounce gold purchase?  Or German television airs a blockbuster story on gold manipulation?  Or Russia and China sign an historic $400 billion natural gas supply deal which may exclude dollar payments?  Or Portugal’s largest bank is declared to be “in serious financial condition?”  Or U.S. mortgage applications fall another 3% even as mortgage rates declined?

But let’s not trifle about such these details particularly when today is “FOMC Minutes release day” – in which markets must be properly “massaged” to prevent Whirlybird Janet from appearing clueless.  Instead, let’s move right on to “why Precious Metals can’t lose,” no matter how much huffing and puffing TPTB attempt in their inevitably futile attempt to “blow them down.”

Specifically, I refer to the irrefutable economic law of debt which is if it cannot be redeemed; it will default – either via nonpayment or inflation.  Money printing, by definition, creates debt as does a “fractional reserve” banking system yielding scant need for collateral.  Not to mention, the proliferation of a “shadow banking” system in which a rising percentage of loans are made outside the regulatory realm; and, of course, the explosion of “off balance sheet” derivatives that magnify leverage by countless multiples.  As Dmitri Speck succinctly notes in his brilliant new book, bubbles are created by the over-extension of credit – let alone, when markets are propped further by government intervention; and if the following pictures don’t convince you of how this “mega-bubble” – as he deems it – must end, nothing will.

First, we have sovereign debt, in both the U.S. and overseas – which don’t forget, are massively understated

Debt Charts

Next, there’s municipal debt (U.S. state debt excluding local entities is $3 trillion)…

Cali State Debt

…corporate debt, which the aforementioned “dramatically lower inferior intellects” try to propagandize away by citing “record cash” holdings without disclosing far larger “record debt” holdings…

Zero Hedge

…both domestically and abroad particularly in China; i.e., the “world’s growth engine”…

Zero Hedge

…student loans up six-fold in the past decade, whilst the labor participation rate and real wages have plunged.  To wit, 70% of the class of 2014 has student loans averaging about $30,000 in both cases; triple what they were a decade ago…

Zero Hedge

What Young People Make

…and last but not least, consumer debt which contrary to the prevailing, comical propaganda, clearly hasn’t “deleveraged” (and what has, has resulted in 56% of all Americans having subprime credit ratings).  In fact, due to the aforementioned plunge in real wages and employment the U.S. savings rate has collapsed to near record lows, while the average household has just $3,000 in retirement savings

FRED Charts

And thus, a simple pictorial describing why “Precious Metals can’t lose.”  Remember, fiat currency creation – by definition – constitutes debt creation and given that such regimes are – by definition – Ponzi schemes, they must grow exponentially to survive.  Conversely, gold and silver –i.e., real money – are no one’s liability and thus can never default.  You make the choice what are the best assets to save your financial net worth in?