As John Steinbeck famously wrote, the “best laid plans o’ mice and men often go awry.” Which is exactly the situation the world’s most evil organization, the U.S. Federal Reserve, faces at tomorrow’s FOMC meeting.
Currently chaired by a career banker puppet, the Fed has been so lulled by the “success” of six years of market manipulation, it actually believes it can “guide” the economy to prosperity if it “paints by numbers” the scheme it cooked up, most likely, at an April 11th “closed-door” meeting between President Obama and the top “TBTF” bank CEOs. The day before that meeting – at which Goldman Sachs’ CEO attended, Goldman issued a gold “short sell” recommendation. And lo and behold, on Friday, April 12th and Monday, April 15th, the “alternative currencies destruction” attacks commenced – at the COMEX open, of course, after the day’s top tick occurred at “2:15 AM EST”; taking gold and silver down by 15% and 20%, respectively. The benchmark 10-year Treasury bond yield was trading at 1.7% at the time, bottomed two weeks later at 1.65%; and three weeks later, Ben Bernanke first used the word “taper.”
Since then, a highly choreographed, historically heavy-handed scheme of money printing, market manipulation and propaganda has been utilized to “create” the perception of recovery. Essentially, TPTB have attempted to “engineer” the desired result of stronger economic activity through unrelenting support of “favored” markets like equities and real estate – whilst viciously attacking “unfavored” ones like precious metals. In doing so, they hoped to gradually wean the stock market (and their $4+ trillion balance sheet) off record low interest rates – via the eternal “hope strategy” of praying the economy “grows” into its debt.
Unfortunately, the global economy is far too complex to control; particularly when the very act of trying to do so causes horrific unintended consequences – such as, for instance, the explosive currency volatility we four months ago deemed “the single most precious metals factor imaginable.” Moreover, as the global economy reached debt saturation long ago, no amount of new credit can positively impact economic activity; and worse yet, five years of massive, unfettered credit creation has created such massive economic dislocations – like shale oil, for instance – that the resultant bubbles could only be deflated via dramatic price declines.
Frankly, it didn’t take long for this “scheme” to go awry; as not only has global economic activity dramatically contracted, but by the end of 2013, U.S. interest rates had already peaked – commencing a year-long plunge that has the benchmark 10-year on the verge of having a “one-handle” this morning; as indisputably, the entire world is becoming aware of the “most damning proof yet of QE failure”; i.e., plunging interest rates despite the Fed-purported, economic data-cooked assertion of “recovery.” And sadly, as ugly as the U.S. economy has gotten, the “non-reserve currency” nations of the world – i.e., all others – are in far worse shape as the “flight to safety” resulting from fears of a “2008 redux” has caused the dollar to explode higher; and consequently, global economic activity to collapse. Thus, this Fall’s historic oil price collapse – to $54/bbl. as I write Tuesday morning – is but a symptom of all the aforementioned issues. And thus, to believe it will resolve any time soon – that is, before an economic cataclysm equivalent to 2008’s mortgage crisis – is just wishful thinking, we’re afraid. And sadly, it seems, the Fed has “used up” all its wishes.
This past week has been perhaps my busiest since joining Miles Franklin in October 2011. Demand for podcasts is growing exponentially – I’m taping six this week alone – and just trying to keep up with the unrelenting explosion of global “horrible headlines” has been a 24/7 job. Plus, even I have never seen such relentless, merciless Cartel, PPT, Fed and ESF market manipulations; as clearly, TPTB are well aware their aforementioned “scheme” is collapsing. Tomorrow alone, they must “counter” the potentially scheme-destroying impact of the FOMC meeting and Greek snap elections; let alone, a host of other “black swan” candidates – from the inexorable oil price plunge; to the collapse of the Russian Ruble; to the aforementioned historic currency volatility that is destroying lives at a rate not seen since World War II.
As for PMs themselves, I thought I had “seen it all” when witnessing the epic paper raids heading into last month’s Swiss referendum; which not only caused historic physical uptake, but turned both gold and silver forward rates “upside down.” The “pinnacle” of such raids took place in the ultra-thinly traded half-day following Thanksgiving – gee, what a “coincidence” that the referendum was scheduled that weekend – when gold, silver and mining shares were mercilessly “bombed into the stone age.” However, when I saw yesterday afternoon’s “repeat performance,” it couldn’t be clearer how desperate the Fed was to prevent the “Yellen Reversal” we predicted three months ago from being necessary at Wednesday’s FOMC meeting.
In fact, per last week’s “desperation tutorial” and “supplemental Cartel manipulation proof” articles, the past four days’ attempts to prevent PMs from re-asserting their historic “safe-haven” status have been as “2008-like” as we can recall. However, yesterday’s farce literally “took the cake” – as the morning’s strong PM out performance suddenly became a PM bloodbath at EXACTLY the 12:00 PM EST “cap of last resort time”; despite, as was the case Wednesday, Thursday and Friday, oil and equities closing at the days’ lows. And speaking of “unintended consequences,” to watch mining stocks collapse like Fannie Mae, Lehman Brothers and AIG is truly breathtaking. This is why I started screaming to avoid them like the plague nearly four years ago, and why the PM production collapse we have long forecast is as “set in stone” as “QE to Infinity.” And talk about a “perfect storm” hitting the Federal Reserve like a ton of bricks – of record physical demand, and collapsing supply!
Anyhow, as I write at 9:00 AM EST Tuesday morning, the 10-year Treasury yield has collapsed to 2.04%, after having touched 2.02% earlier. Stock futures are down sharply, although of course the PPT has brought them back from the lows despite, as I write, WTI oil sitting at its low print of the day, at $53.68/bbl. Gold and silver have been “Cartel Heralded” multiple times already, but both are up sharply. Would it surprise you that gold’s high trade thus far was at exactly Friday’s closing level of $1,221/oz.; achieved at exactly the COMEX open; via the aforementioned Cartel Herald algorithm, – which, thus, also doubled as a prototypical DLITG or “don’t let it turn green” algorithm?
And by the way, not only are currencies the world round crashing – particularly the Russian Ruble and other “commodity currencies,” in epic fashion – but so are industrial commodities, from crude oil to iron ore to base metals. As you can see below, the CRB commodity index is down an astounding 25% this Fall alone, within “earshot” of the 2008 lows that nearly destroyed the entire world. And we assure you, outside of hyper-inflation, there’s not a thing Central banks will be able to do this time around. Fortunately, gold and silver are decidedly not “commodities”; and thus, when the “New York Gold Pool” is inevitably destroyed, the entire world will understand what we wrote of in yesterday’s “re-emergence of real money.”
As Zero Hedge noted yesterday, “you can only fool reality for so long.” And now that the historic manipulation scheme cooked up by TPTB in April 2013 is imploding, it’s just a matter of time before the aforementioned “Yellen Reversal” not only ushers in universal realization of global Federal Reserve led “QE to Infinity,” but permanently ends the Cartel orchestrated, maddening three-year precious metals “bear market.”
And thus, we ask, how can anyone not consider protecting their financial assets with physical precious metals – given an historic supply/demand imbalance on the verge of going nuclear? In our view, once “gold fever” takes hold – as undoubtedly, is occurring in Russia, Japan and other hyper-inflating nations as we speak – Miles Franklin will no longer be able to supply any metal to hopeful buyers.