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For the past decade, we have described why TPTB are so desperate to suppress gold and silver prices – while at the same time, no doubt, acquiring them for themselves.  Plain and simple, PMs are the only known substances to have retained their monetary properties throughout history; as opposed to the fiat currencies they attempt to control the world with, which have a 100% failure rate.  It simply cannot be understated how catastrophic the ramifications of global fiat regime failure will be – which is exactly what we face today; as for the first time ever, ALL nations have abandoned real money following the disastrous, self-serving decisions of a handful of “elite” bankers and politicians.  Historically, the average lifespan of fiat currencies is roughly 40 years, and as we enter the 43rd year of the global “dollar standard” – with global unemployment, debt and inflation at a cumulative all-time high – the writing is clearly on the wall.

When the global financial system broke under the strain of 38 years of unfettered money printing in 2008, TPTB unleashed a monetary tsunami unparalleled in human history; that is, until the “second wave” of such printing in 2011-12 – when the Fed’s QE3, the ECB’s LTRO, and Japan’s “Abenomics” were launched.  The initial impact on nations with “stronger” currencies was to inflate financial assets to unprecedented levels – enriching “the 1%” that received said “money,” while further impoverishing the growing “99%.”  In the U.S., for example, the stock market’s P/E ratio – amidst a 35-year low in Labor Participation, and a 40 year low in real wages – has been pushed to levels seen only before the 1929, 2000, and 2008 market crashes…

Schiller Price Chart

…whilst Treasury yields, amidst record real inflation and debt levels, have been pushed to all-time lows.  Moreover, the “quest for yield” in today’s permanent “ZIRP” world has pushed investors into increasingly risky securities, essentially guaranteeing catastrophic losses irrespective of broad rate movements.  To wit, the fact that Spanish Treasury yields have been “QE’d” down to the same level as U.S. Treasury yields – amidst 26% unemployment and 50+% youth unemployment – speaks of such lunacy loud and clear.

10 Year Treasury Graph

To give such a radical deception a “fighting chance” of succeeding for even a few years, an accompanying “misdirection initiative” of epic proportions had to be simultaneously launched.  To wit, we’ve dealt with an historic combination of money printing, market manipulation and propaganda since the dollar peaked – and gold bottomed – at the turn of the century.  However, nothing we had previously seen compares to what has been perpetrated since the system broke in 2008, and the aforementioned money printing party commenced in 2011, coincident with gold and silver achieving all-time highs.  “The Cartel,” as we call them, is more fearful of rising PM sentiment than anything else, which is why they have created so many “key attack events” to utilize as “cover” for their attacks, whilst increasing the daily usage of “key attack times” like 2:15 AM EST, 7:00 AM EST, 8:20 AM EST, 10:00 AM EST, 12:00 PM EST, 2:00 PM EST, and 6:00 PM EST, and clockwork “Sunday night Sentiment” attacks to get each week started.  Moreover, they have always utilized major geo-political disturbances as “tools” to attack PMs further, never failing to cap initial politically motivated increases and viciously attack them thereafter, in order to “prove” PMs are not safe haven assets.

Utilizing every illegal naked shorting tactic imaginable – such as HFT algorithms, for example – the past two-and-a-half years have been characterized by the abject desperation of a Cartel terrified of 2011 repeating itself.  Thus, when gold sentiment surged above 50% last month – amidst collapsing global economic data, imploding fiat currencies, and the Ukrainian crisis they went into action yet again.  Since then, said economic data has not improved one whit; “emerging market” currencies remain within spitting distance of their lows; and the ramifications of the Ukrainian crisis – such as Russian non-dollar trade deals with major nations like India, China, and Iran have only made PM fundamentals that much stronger.  Moreover, a raft of horrific mining earnings – demonstrating, loud and clear, that PM prices are well below the cost of production; and literally exploding physical demand, as demonstrated by record Chinese gold imports and U.S. Mint Silver Eagle sales, only strengthens the case for surging PM sentiment, on a worldwide basis.

Hulbert Gold Newsletter

Thus, with the potential for the end game of currency collapse – and PM explosion – appearing imminent, they attacked with all their paper might.  As shown below, gold forward leasing rates (GOFOs) have been pushed negative for only the third time in the past 15 years; the only other times being the very end of the gold bear market signaled by 1999’s blatant “Brown Bottom” attack; the desperate, short-lived effort to “prove” gold was not a safe haven asset during the 2008 financial crisis and today.  In other words, at a time when COMEX, LBMA, GLD, and Shanghai Exchange physical gold inventories are at multi-decade – if not all-time – lows, supply is as tight as at any time this generation, while physical demand has never been higher.

Amidst such circumstances, gold and silver were mercilessly taken down over a three-week period, from $1,397/oz. and $21.60/oz., respectively, to lows of $1,279/oz. and $19.70/oz.; and as you can see above, sentiment was taken from the +50% level to -10%, suggesting the average “portfolio manager” is now recommending a 10% short position in gold.  Clueless newsletter writers, as always, are touting the “upcoming plunge” due to their “proprietary technical analysis,” and the MSM is gleefully piling on anti-gold propaganda, in their misguided hope that somehow, the laws of “Economic Mother Nature” will be repealed.  The fever pitch culminated with hype about today’s NFP report – historically, “key attack event #1” for a BLS armed with every “fudge factor” imaginable to create whatever economic perception it desires.  As we noted earlier this week, no such tool is more transparent than its “birth/death model,” used to arbitrarily manipulate the final NFP number at will.  Despite being a theoretical “zero sum” model, it somehow manages to “create” far more jobs than it deletes.  However, it can just as easily be used to weaken MSM economic sentiment when required (with a “weak” headline NFP number) when per what we wrote Wednesday.

With the benchmark 10-year Treasury yield having crept back up to 2.80%, and “Whirlybird Janet” on the record worrying about labor market “slack,” don’t be surprised if what we wrote in “3.0%, Nuff Said” about the government publishing NFP numbers conducive to “QEing” rates back down doesn’t hold true, as it always has.

Miles Franklin, April 2, 2014

Sure enough, the jobs number “missed” expectations, printing at +192,000 versus the expected +206,000 and “whisper numbers” of up to +275,000.  As usual, the underlying data could not be more abysmal – and likely, heavily overstated to start with.  The MSM still hyped it with all their might – such as the below Yahoo! Finance top story – but that hasn’t prevented Treasuries from surging higher, with the benchmark 10-year yield plunging from 2.80% last night to 2.74% as I write at 11:00 AM EST.  Ironic that Yahoo chose a picture of college students to represent the new jobs “renaissance” – as these massively indebted patsies will be entering a work force with record low real wages, labor participation, and real jobs.

To wit, average wages fell yet again, with the number of “high wage” jobs created – again, assuming such data wasn’t purposefully overstated – at a whopping 2,000 out of the 192,000 total.  To that end, below are tables demonstrating the “strong jobs growth” purported by the BLS, in which just 25,000 of the total 192,000 jobs “created” were in goods producing sectors at all.  Of course, per the bottom table, all 25,000 such jobs were part of the 75,000 “birth/death” jobs magically conjured up, as essentially all other jobs were either low paying (and/or minimum wage) jobs in the retail/hospitality category (read, waiters and bartenders), part-time temporary help or the 100% non-productive healthcare industry.  In other words, propaganda or not, another utterly abysmal NFP report, indicative of not only a nation in catastrophic decline, but unable to even disguise such misery with fraudulent numbers.  And oh yeah, said “Labor Participation Rate” was reported to have actually risen – by a measly 0.2% – as the BLS remains terrified of omitting the 1.3 million people that lost their long-term unemployment benefits in December, and some portion of the additional 3.4 million scheduled to lose theirs in 2014, which is already one-quarter over.  Again, the last thing they want to do is report an “unemployment rate” below 6.5% (it was published as 6.7%), which would only make the Fed look that much dumber for last year having proclaimed that 6.5% would signify ‘economic victory.’


As noted above, the past three weeks have been spent mercilessly attacking Paper PM prices – and incidentally, causing dramatically tighter physical conditions, weaker sentiment, and technically oversold conditions.  Moreover, unending “weather hype” – plus a smattering of manipulated “diffusion indices” – had caused interest rates to rise to the aforementioned “do not pass go” level of 3.0% on the benchmark 10-year rate.  Thus, TPTB knew they must publish a “weak” NFP number, just as we predicted despite Wednesday’s “strong” ADP report (remember, last month the ADP report was abysmal, but lo and behold the NFP report was “strong).

Consequently, the Cartel started covering their paper shorts last night, and took PMs higher right after the NFP report publication.  Sure, they have stopped gold at exactly +1.0%, at exactly the key round number of $1,300/oz. (you can’t make this stuff up); and silver at just above its own “line in the sand” at the very, very key round number of $20/oz. that has served as a veritable “financial battlefield” for the past six years (whilst production costs have risen to well above $25/oz.) – utilizing the same “Cartel Herald” capping algorithms as always.  However, given the aforementioned, myriad factors – not to mention, recent “commercial” short covering on the COMEX – and the odds that this latest Paper PM attack has run its course are sky high…

24hr Gold Silver Chart

…yet again, inadvertently solidifying what appear to be massive “double bottoms” – at levels well below the aforementioned gold and silver costs of production – with gold having completed its “golden cross” (50 DMA crossing above the 200 DMA) for the first time in a year…

GLD Chart

…and silver on the verge of doing so shortly…


In the “financial holy grail revisited,” we discussed how those investing in “paper PM investments” are inevitably “scared out” during paper attacks as we just witnessed, while those saving with physical gold and silver sleep the “sleep of the just,” knowing they are protected against the inevitable hyperinflation that ends ALL fiat currency regimes.  Hopefully, the Miles Franklin Blog has helped you to understand just how dire the global economic situation has become, how inevitable the PM explosion is and how imminent it just may be.  And if you have, we hope you’ll call us at 800-822-8080, and “give us a chance” to earn your business!