These past two weeks rival any I’ve seen in my 14½ years of
minute-to-minute PM watching – during which, the Cartel has relentlessly
suppressed prices amidst an unrelenting blizzard of “PM bullish,
everything-else-bearish” news flow. Using cover of the two slowest
trading weeks of the year, they have aggressively pushed prices away from the
indisputable “breakout levels” of $1,370/oz for gold – representing the
“downtrend line” created by September 2011’s “Operation PM Annihilation I,”
December 2011’s “Operation PM Annihilation II,” February 2012’s “Leap Day
Violation,” and April 2013” Alternative Currencies Destruction” raids; and
$20.45/oz silver, representing its 50-month moving average.
Yesterday was particularly egregious; as with interest rates barely higher,
and for much of the day, flat or lower, paper gold and silver were bombed;
after having barely been allowed to rise Monday, when interest rates
– “hawkish” Yellen and Fischer comments notwithstanding – plummeted.
To that end, the benchmark 10-year yield, closed yesterday – and remains
today, after an “in line” ADP jobs report – at exactly the 1.58% yield it was
at the moment before Janet Yellen’s speech Friday, just 25 basis points
above the lowest yield in the nation’s 240-year history. In other
words, for all the propaganda of how Yellen’s speech, and Stanley Fischer’s
follow-up comments, portended “imminent rate hikes” – as if rate hikes are
“PM negative,” given that PM bottomed the day the Fed raised rates last year
– it was, in actuality, a non-event.
Not to mention, when considering the massively hyperinflationary
speeches at Jackson Hole’s Saturday
sessions; and oh yeah, the unending torrent of “PM bullish,
everything-else-bearish” news flow since. In the big picture, this
entire, late August “summer doldrums” period – when the entire world is
trying to “rest,” amidst an horrific year of political, economic, and social
instability that promises to go parabolic this Fall – was about the
powers that be using a low volume environment to “paint” perceptions, ahead
of what promise to be a series of violently volatile, potentially historic,
events.
Before I get to today’s very important topic, I thought I’d highlight a
handful of news items and articles of the past 24 hours – which cumulatively,
help one to realize just how dire the global financial situation has become;
and just how reckless and destructive the powers that be’s’ responses will
be – starting with this Jackson Hole parody from Tim Price;
possibly, the most humorous anti-Central banking piece I’ve ever read.
Next up, the one and only David Stockman – who is on the record
anticipating a major stock market crash, and gold surge, centered around the
first Presidential debate in late September. In this dead-on article, he describes how egregious
the current, Central bank (and PPT) fostered equity bubble has become – using
none other than Facebook as his focal point. Or, as he aptly describes
this societal blight, “a sinkhole of lost productivity and low grade,
self-indulgent entertainment.”
Next, this gem from the great Graham Summers of
Phoenix Capital – of how, in simple, understandable terms, he describes the
economic catastrophe created by Alan Greenspan, Ben Bernanke, and Janet
Yellen. And this, from the brilliant Jeffrey Snider,
highlighting the lunacy of Jackson Hole speaker Olivier Blanchard – like
Larry Summers and Ken Rogoff, holding a Frankenstein-like resume of high
level government and academic positions – who actually blames “gloom” for
inexorably falling interest rates, and an imminently inverting yield curve; rather than the
truth of Central bank monetary policy he helped create, plus
unprecedented official and “unofficial” intervention. To that end, on
the topic of out-of-touch, sociopathic, Central bank crony capitalists, these amazingly arrogant, thoughtless, and
comments from Fed Vice Chair Fischer himself – in claiming that the
historically low interest rates created by his policies are
justified by higher stock prices, even if the net effect has been to destroy
the global economy; the purchasing power of dozens of fiat currencies; and
the savings of hundreds of millions – if not billions – of
“ordinary” citizens.
Then there’s this article – in advance of Friday’s
“all-important,” likely massively rigged, NFP jobs report – explaining how,
like the U.S., Japan’s official “unemployment rate” is at a two-plus decade
low, whilst the “Land of the Setting Sun” literally sinks into an economic
morass it will never recover from. To wit, not only is Japan’s
economic data blatantly rigged, too – but its “demographic hell”
serves as a blaring signal of the economic misery the entire Western world is
about to experience. At the expense, I might at, of “hated” Middle
Eastern cultures which have the best imaginable demographic trends.
Hence, the “migrancy crisis” which is likely to be one of the most
devastating geopolitical trends of the 21st century – even here, in the “Exceptional” States of America.
Which, I might add, will be compounded “a hundredfold” by crashing oil
prices. Which, per last night’s latest API inventory bombshell, are
facing the weakest supply/demand fundamentals since oil was first
commercially used a century ago. As just like April’s propagandized,
and miserably failed, attempt to prop prices with rumors of the “production
freeze” that never happened, the September 26th oil producer meeting in
Algiers will “produce” absolutely nothing; and frankly, be “over before it
starts.”
Sadly, care of the “Great Deformation” I highlighted in my must
read article from January 2015, the “direst
prediction of all,” nearly all commodity markets are hopelessly
oversupplied – and will be, for years to come. Including, for those who
believe “farmland” will be a safe place to invest, most agricultural
commodities. Which, like oil, copper, and most industrial commodities,
have been massively overproduced due to a combination of cheap Central bank
money, predatory financing, and “weapons of mass destruction” financial
engineering. Long time readers know I have discussed the
developing agricultural glut for some time now – and this article describes it in spades.
Since I’ve already written two pages, I’m not even going to discuss the
acceleration of gold withdrawals from the world’s most fraudulent “custodian”
– the New York Federal Reserve; record low COMEX registered silver
inventories; or even the Finnish government’s announcement that it will
shortly embark on a “helicopter money” drop on economically challenged
citizens. No, it’s about time I revisited the giant pink elephant in
the room, of the rapidly approaching “cataclysmic financial big bang to end
all big bangs.” Which is, the upcoming, massive devaluation of the
Chinese Yuan.
In April 2015’s “ugliest
economic data I’ve ever seen,” I espoused that China’s March 2015
import/export data was so horrible, it would likely foster a near-term Yuan
devaluation. That said, after viewing China’s July 2015 data,
I “upgraded” the urgency of my Yuan devaluation call with my ominously titled
August 10th, 2015 article, “the
upcoming, cataclysmic, financial big bang to end all big bangs.” As
it turns out, it took just 24 hours for this to occur – as on August 11th,
the PBOC launched a 6% devaluation, which was undertaken over roughly two
weeks’ time. Financial markets crashed, Precious Metal prices surged,
and only the most maniacal Central bank intervention since early 2009 enabled
markets to recover. That is, until such intervention was stepped up
dramatically in February, when a second round of Yuan devaluation – in
response to a surging dollar, caused by the Fed’s late December rate hike,
nearly took down financial markets, and the Gold Cartel, yet again.
Well, six more months have passed, and the global economy has sunk further
into said morass. Led by the implosion of China’s historic,
government-fostered financial and economic bubbles – which shortly, the
entire world will be fearful of, when it realizes China cannot possibly be
“growing” by 7% per annum, when its actual, real-world economic activity is declining
by at least that much. To that end, it’s been barely a
week since I published “the
ugliest data I’ve ever seen, Part II” – after viewing Japan’s hideous July
2016 trade data, depicting a 15% plunge in exports, and an
otherworldly 25% free fall in imports; in the former’s case, principally due
to plummeting Chinese demand.
In other words, the “Red Ponzi,” as David Stockman mockingly calls it, is
at the end of its rope. Thus, making said “upcoming, cataclysmic,
financial big bang to end all big bangs” more imminent than ever – particularly
if the Fed were dumb enough to continue jawboning the dollar higher by
lying about economic recovery and the prospect of imminent rate hikes, in an
attempt to “prove” the Obama Administration should be continued four more
years, through the election of Hillary Clinton. Let alone, if they were
actually crazy enough to try it – as unquestionably, markets would crash far
more violently that last December, with far less Central bank “cushion.”
To that end, if such a suicidal, economically unjustified, and
aggressively confrontational act were actually undertaken, I might actually
be pushed to agree with “conspiracy theorists” claiming the system is being
purposefully taken down from within. As, per what I discussed in
Monday’s must listen
podcast with Elijah Johnson of Finance and Liberty, if the Fed
actually undertook such a blatantly disruptive, and destructive, act, the
dollar would unquestionably explode against all other fiat currencies –
whilst commodity prices would plummet; and ironically, rates would plunge in
anticipation of NIRP and QE “to infinity”; and – following the initial,
Cartel-aided paper plunge – Precious Metal demand surged.
To that end, if the dollar surges, guess what fiat currency would surge
with it? Yep, the dollar-pegged Yuan – which would, with in my view
100% certainty, drive the PBOC to take the “final currency
war” thermonuclear, with a far more aggressive Yuan devaluation than last
summer’s 6%. Which, in turn, would serve up a second, far more dramatic
deflationary shock than a mere 25 point Fed rate hike. Which, for the
record, I don’t believe will occur, unless “the powers that be” actually seek
to destroy the global economy – right in front of the Presidential election,
no less!
Which is exactly what financial markets are starting to anticipate – per this article, published this morning, after I
considered today’s article topic – of how the PBOC has uncharacteristically
started to walk the Yuan down ahead of this weekend’s potentially
historic G-20 meeting in Hangzhou, China. Historic, in that – according
to Jim Rickards – it will be China’s “coming out party,” in advance of the
Yuan’s October 1st inclusion in the IMF’s SDR currency basket. To that
end, Rickards believes this event – while not guaranteeing immediate
financial market turmoil – spells the beginning of the end of seven decades
of U.S. dollar hegemony. That said, if pushed by a kamikaze Fed to
devalue the Yuan – which it will inevitably do anyway, to protect its
collapsing economy (at least, according to flawed Keynesian theory); or, if
it decides to use said “coming out party” to “establish” its new found
dominance with draconian announcements – such as, for instance, the true
amount of its massive gold reserves; September may literally begin with a
“bang.” Which ironically, will be significantly more likely if the BLS
follows through with its most likely course of action on Friday – which is,
to report a blatantly fraudulent, Hillary Clinton campaign-boosting, jobs
number.
If not, the hideous “summer doldrums PM raids” will reverse on a dime,
igniting a massive gold and silver rally that will likely not look back for
the rest of 2016, and beyond. However, if the BLS does in fact report a
“much better than expected” number, it may well set off a chain of
economically devastating monetary and geopolitical dominoes – of which, the
aforementioned “cataclysmic financial big bang” will ultimately be the focal
point. Which, if it is indeed the case – via a fraudulently strong NFP
report, dramatic G-20 proceedings, or otherwise – would be quite ironic,
given that the current Precious Metals “bear market phase,” too, commenced on
a Labor Day weekend. In that case, in 2011; when, after dollar-priced
gold hit an all-time high of $1,920/oz, a terrified Cartel went into “point of no
return” suppression mode – ironically, mere hours after one of
the most violently PM-bullish events of our lifetimes. I.e., the Swiss
National Bank’s pegging of the Franc to the dying Euro, destroying the
credibility of the world’s last remaining fiat currency “safe haven.”
I.e., the biggest oxymoron ever uttered.
Either way, history’s largest, most destructive fiat Ponzi scheme is
rapidly approaching its hideous end. Which, when it finally “blows,”
you will either have protected yourself from beforehand, or never get another
chance. As when the dust settles; likely, many years from now, the
greatest wealth transfer in human history – from worthless “paper assets” to real
items of value, like physical gold and silver, will have taken place.
