Where to start, on this penultimate Tuesday of the year? And by the
way, next week I’ll be unveiling my 2015 wrap-up, and 2016 predictions, which
should be great fun.
I could easily write a small novella about Sunday’s historic Spanish
elections – a mere two weeks after equally historic French elections;
in both cases, for the first time in decades, breaking up Europe’s
equivalent of America’s dysfunctional “two-party system” – as angry
socialists, secessionists, anti-Euro, and anti-austerity factions consume the
imploding European continent.
Or how about the Chinese government pulling the double “credibility
whammy” of first, “discontinuing” the Minxin PMI manufacturing index because,
unlike the official version, it didn’t purport the government’s party
line of “recovery?” And next, overtly promising additional
fiscal “stimulus” – as if more debt-financed ghost cities will fix the
terminal problem of too many debt-financed ghost cities.
Or how about the “TED Spread” – a widely-watched money market ratio, with
eerily accurate predictive ability; reaching its highest level in four years,
amidst its largest two-day surge since September 2008, just before Lehman
Brothers collapsed?
Or the imminent default of one of Mexico’s oldest, largest industrial
companies – ICA – under the weight of the full destructive powers of Federal
Reserve exported inflation, and Wall Street financial engineering?
I.e., the artificially low interest rates, and ultra-risky financing schemes,
that enabled it to blow up its balance sheet with Peso-denominated debt,
amidst a rapidly collapsing bubble economy. A “model of failure,” I
might add, that thousands of companies, in dozens of countries, are
experiencing.
Or how about yesterday’s abysmal Chicago Fed National Economic Activity
report – including a waybelow expectations, significantly negativenumber for
November, and a massive downward revision for October? “Surpassed” only
by this morning’s horror of a November existing home sales print – which was
“supposed to” have been flat from October, but instead plunged 11%. For
that matter, how about the “strange” fact that, despite the Fed having
“raised rates” last week, actual money market rates are still below
0.25%? In other words, in reality, they haven’t executed
what they claimed.
Or Azerbaijan joining an extremely active month of global currency
devaluation – following Argentina’s official 29% devaluation; market-based
currency crashes in Brazil, South Africa, and Venezuela, among others;
and the inexorable “water torture” the PBOC is engaging in, in weakening the Yuan’s
dollar peg a tiny bit each day; with an overnight, government-decreed,
50% devaluation?
I won’t even go into the PPT’s desperate effort to reverse the
irreversible with petty, comically transparent “resuscitation operations” –
as at this point, even the most jaded market apologist realizes the average
stock is now in a bear market (down at least 20%); including, say it ain’t so
– APPLE. Or crashing oil prices; Portuguese and Italian bank
“bailouts”; aggressive, expanding war rhetoric; or heck, the hopelessly inept
“hedge fund” community taking its most bearish Precious Metals stance ever,
amidst record physical demand, vanishing inventories, and imploding production.
Incredibly, none of these topics were deemed “worthy enough” for
headline attention today. So again, kudos to the great David
Stockman for unearthing the data that reached the pinnacle of my daily “top
ten” of “horrible headlines.” Which is, providing proof positive – or
should I say, negative – of just how insane it is that
government-appointed bureaucrats are considered the “world’s smartest
people.” Let alone, why anyone listens to a word they say, when 1) they
are always wrong; and 2) like Wall Street, they are incentivized to
lie. Not that there aren’t brilliant people in non-profit jobs of all
sorts, of course. However, when working within big government, the most
valuable “skill” is towing the party line; and the most frowned on, speaking
the truth.
To wit, we are unquestionably amidst the end game of history’s largest;
broadest; and most global fiat currency Ponzi scheme. Amidst the
chaos of exploding debt, collapsing economic activity, and imploding
commodities, currencies, high yield bonds, and even equities, we’ve reached
the point where it’s becoming common knowledge that Central banks not
only have been dead wrong in everything they’ve predicted and promised, but
that the world sits at the precipice of economic ruin as a consequence of
their policies. Led, of course, by the world’s printer-in-chief, the
Federal Reserve.
To that end, the “meme” behind last week’s moronic,
suicidal interest rate hike – even if it has yet to actually occur in the
money markets – is that the Fed is so “confident” in the economy, it felt the
need to be “ahead of the curve” to stave off the nasty inflation that will
eventually arrive if it maintain zero interest rates.
Of course, the “fly in the ointment” of such prognostication is that
incoming data – both here and overseas – is as weak as at any time in our
lifetimes; and objectively speaking, the 2008 bottom as well. Not to
mention, the Fed has been hopelessly wrong in its economic forecasts every
year since said “recovery” commenced; on average, by 50%, and more so if
actual, unadulterated data were used. For that matter, take a gander at
not only the Fed’s last five years’ GDP growth expectations, made in November
and December of the preceding year. And for “good measure,” the equally
bureaucrat-dominated IMF (led, of course, by the U.S. government) – in just six
months ago, forecasting a mean Brent crude oil price of $70/bbl,
and a range of $40/bbl to $105/bbl, compared to this morning’s
seven-year low of $36/bbl.
In other words, not only are “the world’s smartest people” not smart,
but amongst the dimmest economic bulbs the planet has to offer. To that
end, I’d be shocked if 2016 isn’t the year they are completely, irreversibly
recognized as such. Which, if this is the case, will unquestionably
lead to financial market “revaluations” decidedly against their best
manipulative intentions; including, of course, the return of Precious Metal
prices to levels more “commensurate” with exploding political, geopolitical,
economic, financial, and social instability.
