Fifteen
months ago, I wrote of the “cataclysmic” dangers of a budding, historic
commodity crash. And no, Precious Metals are decidedly not
“commodities” – which is why, unprecedented Cartel price suppression
notwithstanding, physical gold
and silver
demand have surged to all-time highs. Just as there is nothing inherently
“Precious Metals’ negative” about “rising
rates”; again, unprecedented Cartel price suppression notwithstanding.
Let alone, with prices already at multi-year lows; demand at record
highs; supply rapidly vanishing; the global economy collapsing; and nearly
every Central bank hyper-inflating
their currencies
Fourteen
months ago, I warned that crashing oil prices ($81/bbl at the time) –
and generally speaking, commodity prices – would foster “unspeakable”
political, economic, and social horrors.
And eleven
months ago, issued my “direst prediction of all.” Which was, utilizing
David Stockman’s “Great Deformation” research as the basis if my views, that
said commodity crash may last not just years, but decades.
Eight
months ago, upon witnessing the “ugliest economic data I’d ever seen”
– i.e., 12% and 15% year-over-year plunges, respectively, in China’s March
imports and exports, I upgraded my long-standing call for a significant Yuan
devaluation from inevitable to imminent. Not to mention, my incredulity
regarding the continued, parabolic, margin-fueled explosion of Chinese stock
prices.
“Whilst the Chinese, Japanese, and Hong Kong stock exchanges rise
parabolically, Chinese imports are plunging, and exports utterly imploding.
Frankly, it is difficult to find a better measure of global trade activity
than Chinese exports; and when combined with ugly Chinese import data, the
picture is one of worldwide recession, if not depression. This is why global
ZIRP, NIRP, and QE programs are all but guaranteed to accelerate; likely,
right now. Moreover, the expanding economic carnage is why the Miles Franklin
Blog has loudly predicted a dramatic – perhaps imminent – Yuan devaluation;
i.e., the political, economic, and social “big bang to end all big bangs.” To
a man, it is difficult to conceive how the most blatant currency manipulators
on the planet are not actively planning to de-peg the Yuan from the “helium
balloon” the dollar has become; as not only is China’s manufacturing market
share being stolen by Japan and other currency immolating nations, but
competition is becoming fiercer due to inexorably weakening economic
conditions.”
Six months ago, the Chinese stock market peaked – crashing 45% in
the ensuing two months, before the Chinese PPT (comically named the “national
team”) adopted U.S.-PPT-like
tactics, like “dead
ringer” and “hail mary” algorithms, to stabilize it. That said,
it’s still down 33% – and acting “heavy” anew, having been decidedly rejected
by national team-orchestrated attempts to push it above its 200 day moving
average.
And four
months ago, after Chinese trade data depicted dramatically
deteriorating economic activity, I espoused that the “imminent” Yuan
devaluation predicted in April had just become “hyper-imminent.” And Voila!,
that very evening it occurred, with the Yuan/dollar peg devalued, over
a two-day period, by 6%, to a new 4½ year low. Which not only immediately
catalyzed the final leg of the Shanghai stock market’s collapse; but the
CRB Index’s first touch of its 40-year low of 185; and the dollar
index’s surge to a new 12-year high.
The latter of which, I might add, I predicted in my “2014 predictions” twenty months earlier
– under the assumption that fearful global capital would flee illiquid
“commodity currencies” for the “safety” of the world’s most hyper-inflated
“reserve currency.” Gold and silver prices surged upon the Yuan
devaluation – as they should – causing the Cartel to go berserk capping
them at their respective 200 day moving averages of roughly $1,175/oz and
$16.00/oz – before viciously attacking them, in unprecedented fashion, when
the Fed’s “December rate hike or bust” campaign commenced with the October 28th
FOMC statement; in pretending the imploding global economy was
“recovering,” via a pathetic propaganda campaign which likely, once and for
all, will destroy its remaining “credibility.”
Three
months ago, upon witnessing the PBOC’s unfathomably Keystone Kop-like
support of the Yuan, whilst simultaneously attempting to devalue it,
I deemed China’s government the “most dangerous, destabilizing force on
Earth”; first, for fostering history’s largest financial and economic
bubbles; and secondly, for its inept efforts at “containing” and
“stabilizing” it. Thankfully for the long-term outlook of the Chinese
economy, a millennium of fiat currency failures have ingrained the value of accumulating
gold, under all scenarios, by both the Chinese government and citizenry alike.
But that’s another story altogether, to be told over the coming decades.
Simultaneously,
I warned that if the Fed were stupid, and suicidal
enough to actually raise rates – even by a “token” quarter point – it would
be the “only financial event as potentially cataclysmic as a significant Yuan
devaluation.” And Voila! Three months later, the CRB
commodity index has crashed to 176, free falling as I speak; as
Friday’s historic OPEC decision to maintain production – which I vehemently
predicted all year – has, in the words of yesterday’s
article, “sealed the global economy’s terrifying fate.” Not to mention,
severely jeopardized the Fed’s moronic rate-increasing propaganda
scheme – as collapsing stocks, interest rates, high yield bonds, commodities,
and currencies, if not reversed by miraculously manipulated rallies –
will make it all but impossible to pretend the economy is “recovering”
at next week’s FOMC meeting. Particularly as the Fed’s own
datasays otherwise; and this, before the latest
currency/commodity/equity/junk bond/Treasury yield implosion!
Just yesterday, we learned that China’s foreign exchange reserves
had their third-largest monthly plunge ever – mirroring what all “emerging
market” currencies, most of which are already at all-time lows, are
experiencing – as said “liquidity vacuum” is causing global capital to flee
to the dollar; and in the process, annihilating the economies, and finances,
of hundreds of nations. Not to mention, decidedly validating previous
data suggesting the Chinese government is massively selling U.S.
Treasuries to protect its collapsing financial markets – making it more
likely than ever that not only is a Fed rate hike off the table, but that, as
I have noted countless times before – like hereand
here –
the Fed not only never “ended” QE, but has been doing it, covertly,
more aggressively than ever!
Subsequently, China’s horrific, and “worse than expected” November trade
data – was released last night – depicting further implosion of both exports
and imports. Which, combined with the deleterious, lingering impact of
Friday’s historically deflationary OPEC decision, has caused commodity prices
to accelerate to the downside – such as WTI crude, which as I write Tuesday
morning, is at a new six-year low of$36.85/bbl, compared to $41.50/bbl before
the OPEC announcement Friday afternoon.
Far ominously, in yet another cataclysmic development completely
unreported by the Mainstream Media, last night’s Yuan peg was below the
low level set just after the initial August devaluation, as the PBOC
continues to “gradually” walk it down. Which, now that it has been
“accepted” into the IMF’s pathetic, useless “strategic currency basket”
(which in effect, simply served the Chinese as a publicity statement), the
PBOC has free reign to destroy the Yuan “at will.” Which
I assure you, it most certainly will – although more likely, via the small,
daily “Chinese water torture” steps they have been using lately; rather than
the shocking, destabilizing “bazooka” type unleashed August 10th and
11th.
Which brings us to next week’s potentially historic FOMC meeting – at
which the Fed is desperate to raise rates, in a pathetically
misguided, hopelessly inept attempt to “save face” – after having promised
tighter policy for nearly three years. They – and you – know
full well that the only way they can do this is in an environment of
surging stock prices and stable bonds, commodities, and currencies.
Which, for the umpteenth time, is all they care about; and all their
manipulative efforts are channeled at.
However, now that the “perfect cataclysmic storm” of plunging commodities,
currencies, high yield bonds, Treasury yields, and economic
activity is upon them (including, just one day after their
blatantly manipulated NFP employment report, a plunge in the Fed’s very
own “Labor Market Conditions Index”) – not to mention, dangerous political
and geopolitical
trends – it’s looking more and more likely that said “rate hike” may in fact
be substituted by some variation of the inevitable “Yellen Reversal.”
Which is, when Whirlybird Janet is forced by collapsing financial
markets to admit the economy is not only collapsing, but in need of
further, immediate monetary stimulus. And trust me, if when it
becomes apparent to the entire world that the PBOC does in fact intend to
unleash the “financial big bang to end all big bangs” – which, I might add,
the Chinese government’s own reports already
assume – the “final currency
war” I predicted three years ago will officially go
“thermonuclear.” Which I assure you, will decidedly NOT engender Fed
“rate hikes”; but, to the contrary, negative interest rate and “QE to
Infinity!”
To that end, in light of already record-highglobal gold and silver
demand; collapsing inventories and production; and the time-honored “safe
haven” roles Precious Metals play amidst fiat currency devaluations; not to
mention, the chart featured in yesterday’sarticle;
do you believe you are prepared to weather the “perfect cataclysmic
storm?”
And by the way, as I edit, the metals’ supply implosion I have been
warning of for the past year just became a REALITY – when Anglo-American, the
world’s fifth largest miner, announced
it will sell 60% of its assets, suspend its dividend, take up to $4.7 billion
of write-offs, and lay off an astounding 85,000 employees, or 65% of its
global work force! My friends, this is what I have been all but
screaming about; as a combination of Central bank/Wall Street-induced
base metal/industrial commodity oversupply; plunging economy-related demand;
and in the case of primary Precious Metals mines, Cartel suppression; have
set up the mining industry to violently collapse in 2016 – which is why I recently
predicted 2016 will be an “unmitigated disaster,” on all levels other
than physical gold and silver demand, and prices!