Six weeks ago, I wrote of how Janet Yellen represented the culmination of four-plus decades of reckless global monetary policy. Like Ben Bernanke, her background is entirely in the ivory tower (Harvard and Yale, to be specific) and government; and like the Helicopter Man himself, she is entirely devoted to the belief that money printing cures all ills. Worse yet, she has been wrong about every major decision she has made in her two decades at the Fed – as Peter Schiff pointed out in this fantastic video. Yellen has made it crystal clear that “full employment” is far more important than inflation control; and thus, will do “whatever it takes” to make that happen – even if the lower “unemployment rate” she targets falls solely due to plunging Labor Participation.
As I have said all year, the Fed can never “taper” QE; and in fact, is more likely to increase it in the coming months. Fiat currency, by definition, is a Ponzi scheme that must grow larger to survive; and given this is the world’s largest-ever fiat regime, the coming printing press output will likely be the most aggressive in history. TPTB have been trying all year to convince the masses of economic “recovery” via epic levels of money printing, market manipulation, and propaganda – but it’s decidedly not working. Last night alone, bellwether tech stock Cisco Systems – amidst a raging NASDAQ rally – reported the most abysmal forward guidance imaginable; which can only be done justice by the below picture. And oh yeah, Walmart, the nation’s largest company and employer, just missed earnings expectations and reduced its forward guidance as well. But don’t worry, the economy’s “recovering.”
Next, Japan reported a paltry 0.4% of 3Q GDP, half the fourth quarter rate and barely positive despite nearly a year of “quantitative qualitative” easing. Don’t worry, the banks receiving such free money reported record profits; but as greed as no bottom, they are demanding “moar” stimulus!
And on to Europe, where despite the continually propagandized “recovery,” it was reported that third quarter GDP “grew” at a measly 0.1% rate, down from 0.3% in the second quarter. France and Italy were negative, while Spain was reported to be – LOL – up 0.1%. Yeah, Spain was positive – with its 30% unemployment rate.
Just last week, the ECB lowered its base financing rate (for insolvent banks) to a pitiful 0.25% – just above the Fed’s “range” of 0.00% to 0.25%. But it’s clearly not enough; which is why yesterday, ECB governors spoke of the necessity to consider their own version of QE – that is, outside the covert Fed “swap agreements” that secretly funnel cash into European banks – and even the incomprehensible “NIRP,” or Negative Interest Rate Policy, I wrote of last year.
On to the main event which actually happened yesterday evening, in advance of the aforementioned news; and today’s Senate confirmation hearing for Yellen’s Fed Chairmanship, which would commence in February. Her official comments were published beforehand; and lo and behold they vehemently extoll the virtues of the current money printing scheme, in which a whopping 70% of Treasury issuance is being monetized; of which, she claims, there is “more work to do” to support the current recovery. In other words, yet again the liars and “gurus” have it wrong; as “tapering” is decidedly not going to occur at the December FOMC meeting; and likely, won’t even be considered until after Yellen takes office. Heck, with the upcoming, massive “mortgage resets” coming – sound familiar? – Raising rates any time in the future would be pure “government suicide.”
Showing just how psychotic the degree of market intervention and moral hazard has become, global stock and bond markets are all higher based on this cornucopia of bad news (what else is new?), as the path to hyperinflation draws still closer. Even though it’s been proven that diminishing returns are now causing money printing to contract global GDP, the aforementioned Ponzi scheme nature of fiat money necessitates it – lest the global economy will immediately collapse.
PAPER PMs are higher; but of course, were stopped immediately after Yellen’s comments by the Cartel Herald algorithm after rising by exactly 1%; followed by the 2:15 AM algorithms when gold attempted to rise further – in the latter case, for an incredible 115th time in the past 127 days. Such blatant manipulation is now on display for the entire world to see – causing it to step up physical buying at record rates. Just this week, U.S. Mint Silver Eagle sales surpassed the record year of 2011’s total; whilst through September; Chinese gold imports surpassed 2012’s record levels, for example.
How long can this gaping dislocation be maintained – in the face of surging physical demand and plunging supply? And how long can the global financial system hold up in the face of collapsing economies and surging money printing? Only time will tell; but my guess is not a lot!
It will stop when someone buys the whole silver market like the Hunt Brothers did, but then demand delivery, then do it again the next month. That’s when it will end.