First off, the Republicans took back the Senate. Big deal, it will have absolutely ZERO impact on the economy, financial markets, or the ongoing decline of the once great American society.
Democratic victories in the 2006-2012 elections were clearly due to voter disillusion with America’s rapid decline during more than a decade of predominantly Republican rule; as the GOP held the House Majority from 1994-2006, and the Senate majority in ten of those 12 years. Throw in George W. Bush’s horrific legacy – as well as charismatic lies during Obama’s re-election campaign, and you can see why Americans gave Democrats the benefit of the doubt in 2012, irrespective of little or no “hope” or “change” during Obama’s first term.
But no more; as by 2014, the average American’s disillusionment with its despicably corrupt, hopelessly inept Congress yielded an all-time low approval rating of just 9%. True, there are still far more Republicans than Democrats in Congress; but clearly, a “change” was in the cards regarding the Democrats’ narrow Senate majority. However, now that Presidential powers border on dictatorial; and Congress’ will to even debate long lost; why does anyone believe anything would – or could – possibly change? Just hours after becoming Senate Majority leader, Mitch McConnell already claimed he has no intention of overturning Obamacare. After all, Republicans will need Obamacare recipients’ votes in 2016, if (insert name here) is to defeat Bill Hillary Clinton.
Next up, a word on the precious metals newsletter writer community – of which essentially all have called “the bottom” at some point this year and all have been wrong. The fact that anyone still relies on technical analysis in a rigged market, or that anyone believes a handful of “special” people have “proprietary” analysis worth is beyond me; but hey, to each his own. I follow a handful of “the best” of this lot’s views; and without fail, each one utilizes the same strategy I was taught too well in my seven years of Wall Street sell-side research, principally at Salomon Smith Barney. Which is to couch all statements in such a manner as to claim one was “right” when in fact they could not have been more wrong. Irrespective of such semantics, right or wrong, those who listened to such advice lost significant amounts of money – particularly when investing in the “paper PM investments” like mining stocks, typically pitched.
Speaking of mining stocks, the HUI this morning traded as low as 149.3 – i.e., below the September 2008 low of 150.3; whilst the TSX-Venture at 748 is just above the September 2008 low of 697 (down 80% from its May 2007 high) – but only because so many miners have already gone bankrupt, and the fact the Venture exchange has a significant non-miner component. In other words, the large cap miners are back to early 2003 levels – when gold and silver traded at $300/oz. and $4.50/oz., respectively; whilst nearly all junior miners are at all-time lows. And don’t forget the closed-end bullion funds CEF (Central Fund of Canada) and GTU (Central Gold Trust). We loudly warned of their risks in February 2013, when they were trading at net asset value – and as of this morning, they are trading at discounts of 11%-13%. Interestingly, the Sprott physical silver fund (PSLV) continues to trade at a 2% premium to net asset value and the Sprott physical gold fund (PHYS) a modest 1.5% discount; attesting to just how strong demand for physical demand is, given that the Sprott funds – unlike the aforementioned “Spicer funds” – are convertible to actual metal. We simply speak the TRUTH about the economy and financial markets hoping you will utilize it to protect yourself from the inevitable collapse of the terminally cancerous fiat currency regime. All of Miles Franklin’s principals put their money where our mouth is, in holding significant portions of their savings in physical gold and silver; and anyone who has read or listened to the views of David Schectman, Andy Schectman, Bill Holter or myself knows full well our business goals not only do not conflict with our analysis, but are no more important than our life’s mission of financial education. This is why we receive essentially no negative feedback on days like today and do not feel compelled to apologize, rationalize or justify our views. In other words, we tell the TRUTH – which inevitably “sets you free.”
Speaking of truth, what part of someone selling $1.5 billion of gold futures at 12:30 AM EST rings of a freely-traded market – particularly when it’s now occurred on five straight days since the “end of QE (LOL),” and all four mornings since the Bank of Japan’s nuclear money printing announcement? Not to mention, ahead of yesterday’s mid-term elections, tomorrow’s potentially momentous ECB meeting, Friday’s NFP report, Sunday’s (“non-binding”) Catalonian secession vote – and oh yeah, the potentially Cartel-ending November 30th Swiss gold referendum. For the record, 12:30 AM EST represents the uniquely illiquid period between the Japanese morning and afternoon trading sessions – which apparently, has been added to the Cartel’s expanding list of “key attack times.” Clearly, the Cartel aims to prevent, by all means, the $1,183 “triple bottom” level from being recaptured – so as to cause the aforementioned “technical analysts” to warn of further declines, and “black box” naked shorters to pile on with additional unbacked “sell” orders.
Fortunately, this dark moment in financial history cannot last – as not only is the global economy rapidly worsening, but the supply/demand balance in physical PM markets is getting decidedly tighter. In the silver market, premiums and delivery times have started to creep higher; whilst in the gold market, forward rates continue to move deeper into backwardation, as withdrawals from both the COMEX and GLD accelerate. All measures of global demand are surging; and with the mining industry on the verge of collapse – and capital availability essentially ZERO – the prospect of unfathomable production collapses have never been more acute. The fact that even Goldcorp reported a loss last quarter – before the current price smash – should tell you just how dire the industry’s condition is. And mark our words, if 2014 ends with prices anywhere near the current historically suppressed levels, the inevitable reserve write-downs, production shut-ins, and industry-paralyzing mergers may well dwarf the relative impact of the late 1990s to early 2000s oil industry consolidation, following oil’s brief gambit below $10/bbl.
Worldwide, the economy is in all-out collapse – as demonstrated by the fact commodities are falling at their most rapid rate since the September 2008 “Lehman moment.” Here in the States, our economic book-cookers work harder than anywhere else. Thus, we are treated to “higher than expected” GDP due to government defense spending to bomb ISIS; multi-year lows in “unemployment” when the Labor Participation Rate – along with Presidential and Congressional approval ratings – are at all-time lows. Let alone, this morning’s equally-cooked ADP employment gain of 230,000 jobs released simultaneous with Gallup’s job creation index plunging by a whopping 10%. Not to mention, the lowest ISM and PMI service index readings since April and June, respectively (much worse than reported, when this ridiculous “adjustment” is excluded), and a 3% decline in the MBA mortgage purchase/refinancing index. Throw in the horrifying trend depicted by this ugly chart of more than half of all S&P 500 companies reducing earnings expectations, and the gaping chasm between government-manipulated markets and economic reality – much like that of the paper and physical PM markets – has clearly never been wider. To wit, we have now experienced a “Dow Jones Propaganda Average” “dead ringer” algorithm every day since QE supposedly ended, and a “new Hail Mary” algorithm every time the 10-year Treasury yield sought to follow global rates lower below the Fed’s current “line in the sand” at 2.3%. And like precious metals, such actions nearly always occur at the “key attack time” of 10:00 AM EST, when global physical gold and silver markets close and the Fed’s “open market operations” are executed. In TPTB’s desperation to prolong its world-destroying game, they have resorted to manipulating markets every minute of every day – which is probably why “2:15 AM” EST PM raids now occur on 90% of all trading days; “Sunday night Sentiment” attacks essentially every week; “Sixth Sigma” aftermarket attacks and intraday “silver waterfalls” essentially every day; whilst the stock market sports a ratio of up months to down months higher than at any time since 1929.
On this historic day of market manipulation, I have limited space to speak of today’s principal topic. But suffice to say, it’s an extension of what we have written all along of, regarding the currency volatility (and destruction) catalyzed by Western hyper-monetary inflation; i.e., the “single most precious metal bullish factor imaginable.” Whilst the clueless, disingenuine MSM publishes headlines like “Republican election gains send dollar to seven-year high versus yen” – as opposed to the Bank of Japan’s overt hyperinflationary policies – the entire world is suffering from Western money printing madness. Below is an update of the damning chart I have published since the Federal Reserve went “all-in” with Operation Twist/QE3/QE4 following the 2011 global sovereign crisis – depicting the massive inflation the West has exported more than offsetting the recent crude oil price decline.
As we wrote in yesterday’s “three death trends,” such inflation has accelerated a “final currency war” that can only end with, as WHOPPER from War Games would have put it, mutually-assured destruction. We may well see the next “move” played tomorrow by the ECB, in response to its post-BOJ surge against the Yen; ironically, simultaneous with its post-FOMC plunge against the dollar, after which the U.S. warned the ECB not to push the Euro’s devaluation “too far.” To that end, I read an article yesterday of the “zugzwand” situation all Central banks currently face. That is referring to a precarious chess position – or the War Games simulation above – a situation in which all potential moves are harmful. To that end, rest assured, the world’s bankers – and politicians, be they Democrat or Republican – will make this historically horrific economic situation worse. And thus, on this fifth of November with gold and silver prices battered to unconscionable levels amidst the most PM-bullish fundamentals of our lifetimes, will you be “brave” enough to insure yourself from what must occur?
Thanks for what you do each and every day. I’m wondering, is this the “Crack Up Boom” phase we are approaching. It’s clear to me we are in rapid collapse, but almost everyone I talk to they don’t have a clue what is going on around the world. I’m afraid, as Americans we are going to learn a very hard lesson once the denial wears off. It’s also clear the Status Quo boys are going to hold on until everything blows sky high!
Agreed on all counts, assuming by crack up boom you mean the financial markets. Of course, they are not “booming” but being goosed higher by the same people suppressing PMs.
Speaking of PM price suppression, I just heard that the US Mint has suspended Silver Eagle sales due to record demand over the past few weeks. Can you confirm this?
Yes, writing about it tomorrow.
Funny how you shit all over the miners and that is where I have made money the last year.
Ah John, I thought your kind were finally extinct. For 3 1/2 years, I have been warning people of mining stocks – which have continued to plunge. All along, people would say “How can you say this? My miners have done well.” Yes, the stock-picking geniuses that have found an increasingly small group of stocks that rose.
Well, yesterday afternoon, the HUI closed BELOW its 2008 low, and the TSX, on an apples-to-apples basis, is probably well below that low. Thus, I find it IMPOSSIBLE that you – or anyone, made money on them in the past year. I’d venture to say 99.9% of all miners are down this year, so you truly are a genius.
Excellent article Andy! It’s frustrating to watch the manipulation. Even more frustrating trying to explain to my friends why they should buy physical and not the S&P 500. I usually get the RCA Puppy Dog head tilt look and they tell me I’m insane. I’ll just keep stacking my Silver and patiently wait for the day that all this Central banking madness ends… Hoser
P.s. I do like these crazy prices though. YIPEE
Running out of silver at the Mint is certainly a start.
Andy: good post. My fear is not the end game; rather it is what the psychos will do to distract the plebes, so that the reason for the implosion cannot be blamed on the FED cabal.
I couldn’t agree more.
I have been enjoying your posts and am learning from you. I certainly am not a financial guru. This is something I had read, quite some time back.
They were called, resource robber barons and the wealthy, sit on all of the money. This stops the cash flow around the globe. This in turn causes a recession and the resource barons are, grabbing more and more control. That, all of this is about global governance. Is this true?
A bit ambiguous, but not far from the truth.
Keith Weiner is a PM newsletter writer and he’s been right all the way down.
If you say so. Good for him.
Thanks for the non-partisan reality based analysis of the political landscape which is characterized, in my mind, by nothing short of an absolute tsunami of grifters who have appropriated our political/financial system with a confidence game that as a population, in general terms, we have been all too willing to fall victim to. I think it’s always been the case since politics have existed but it seems the scale is unprecedented in this nation’s history. It seems as long as I believe ANY partisan assertions I am on the wrong road. These people are almost all fundamentally sociopaths from what I can tell. Party affiliation seems to have no bearing.
I do have my PM insurance in place albeit at significantly higher “prices”. I may add another chunk of silver but need to keep enough powder dry for a transition which I ironically fear and look forward to.
Your work is very helpful, cuts to the chase.
You’re very welcome!
I lost my shirt on miners from January 2013 to November 2013 when I finally sold out. I wish I wouldn’t have touched them. Since then I’ve been 100% physical. Wish I would have listened to you guys earlier. You were and are right. I’m hoping to recover my losses with the physical!