Why The Fed Would Be Absolutely Insane To Raise Rates On June 15th

After a month of unadulterated, unabashed, brazen, blatant, shameless, market manipulation; of everything from stocks, to bonds, currencies – and of course, crude oil – I had a “Popeye moment” last night.  As in, “that’s all I can stands, I can’t stands no more.”  Have no fear, I’m not going anywhere – as given my desire to “beat” a Cartel that has done everything in its power to ruin my life for the past 14 years, no force – plant, animal, or mineral – will stop me from following my life’s work through.  So despite my moment of weakness, rest assured I’ll do “whatever it takes” to get my message of truth across.

To that end, my desire to help others through what will unquestionably be the most catastrophic currency crisis in history is equally powerful – starting with my own family, and including everyone reached by the Miles Franklin Blog.  Frankly, given the charmed life I’ve been blessed with, it’s borderline pathetic for me to complain so much.  However, for someone whose values are so rooted in honesty, it’s mentally difficult to watch the world taken apart by handful of sociopaths, utilizing every imaginable means of deception and criminality for personal gain, at the expense of the “99%,” and their unborn descendants.

Fortunately, such lies are by nature self-destructive, as never in history has a fiat currency regime survived.  And given the epic pyramid of debt, overcapacity, and financial instability created by this, the world’s first global fiat Ponzi, the odds of anything other than unprecedented calamity are not just “slim to none,” but ZERO.  Which, by the way, is what the majority of the world’s 7.4 billion people are already experiencing – including the “Exceptional States of America,” with its $19.3 trillion of debt (plus $5+ billion “off balance sheet, and $200+ trillion of “unfunded liabilities); exploding welfare requirements; gutted manufacturing base; and rapidly expanding, terminally cancerous political and financial market corruption.  I mean geez, here’s just a smattering of U.S. headlines from the past 24 hours alone…

• Corporations have borrowed trillions to fund financial engineering, not growth
• Bloomberg finally notices crazy corporate debt growth, issues stark warning
• Largest U.S. health insurer exits California, Illinois Obamacare markets
• The “Hillbamacare Cliff” – A marginal tax rate of 741% at $64,000/year
• Wikileaks asks if smoking gun email will bring down Hillary
• Huffington Post removes article claiming Hillary will be indicted for racketeering
• Price-to-book ratio now the highest ever
• Peak insanity – trophy apartment in Manhattan going for a cool $250 million
• U.S. State Department issues European travel alert, warns of terrorist attacks
• Alan Greenspan – “We’re heading towards a state of disaster”

And that’s just here, in the supposedly “best nation on Earth.”  I mean, these are some of the “Precious Metals (and Bitcoin) bullish, everything-else-bearish” headlines overseas; again, in just the past 24 hours…

• Hong Kong retail sales plunge for 14^th consecutive month, 7.5% year-over-year
• Abenomics death cross, as Japan PMI plunges to 40-month lows
• Yuan devalued to five year low following miserable manufacturing PMI, featuring crashing steel industry orders
• Cash starved Saudi Arabia to issue first ever bond offering, of $15 billion
• Investors are fleeing, attention returns to Brazil’s depression
• Pound plunges, as polls show BrExit sentiment overtaking BrEmain

As for today’s title, it couldn’t be more self-explanatory.  In my view, the only reasons the Fed pretended it was considering raising rates June 15^th – which, per last week’s epic Audioblog, was just a poorly-conceived, comically-executed ruse – were 1) to help extricate COMEX “commercials” from their all-time high naked gold and silver short positions (not that raising rates would be in any way “gold-bearish); and 2) in light of the ZERO percent chance of a rate hike in the money markets, demonstrate that it’s “still in charge,” and needs to be both heeded and feared.

That said, this hastily-conceived, pathetically executed “plan” has already backfired – as not only have stock markets (PPT-support notwithstanding) largely ignored Whirlybird Janet’s “warning,” but “commercial” short covering has likely caused the PM markets to bottom without any serious technical damage.  Moreover, interest rates haven’t budged from the nearly all-time low levels prevailing before the May 18^th FOMC minutes publication, whilst commodity prices and currencies have plunged anew.  Even “oil PPT” supported crude has been powerfully blocked at the key resistance level of $50/bbl; and with tomorrow’s bi-annual OPEC meeting looming – in which nothing “bullish” has a chance in hell of occurring – the odds of oil’s historically horrific fundamentals re-asserting themselves have never been stronger.  Moreoever, per above, the PBOC has “responded” to the Fed’s stupidity by renewing the cataclysmic process of devaluing the Yuan; with the Bank of Japan, a “top ten” holder of more than 90% of Japanese stocks, right behind it, per last week’s decision to indefinitely delay the sales tax hike that was supposed to “pay” for Abenomics – as Shinzo Abe himself warned G7 attendees, in his home town of Tokyo, of an upcoming “Lehman moment.”

Here in the United States of, LOL, “recovery,” yesterday’s economic data was a perfect microcosm of the stagflationary hell enveloping us; which, if the Fed were stupid enough to raise rates, by even a measly quarter point, would be like throwing kerosene on a raging fire.  I mean, who are we kidding, in pretending GDP is “growing?”

To wit, the Chicago PMI “unexpectedly” plunged to a recessionary 49.3; whilst the Dallas Manufacturing survey plummeted from -13.9 to -20.8; as the Consumer Confidence survey – goosed stock markets and all – declined from 94.2 to 92.6; and the State Street Confidence Index, from 109.1 to 106.6.  In fact, the only indices that “rose” yesterday were 1) the Case Shiller Home price index – which continues to surge, care of the echo housing bubble that zero interest rates have fostered, yielding record high rents and record low home ownership; and 2) personal spending, which was nearly triple actual personal income, due to a credit-fueled spending frenzy, from debt-engorged, underemployed Americans that desperately needed 20%-yielding credit card debt to purchase…gasoline, which accounted for, by far, the largest component of incremental spending.

Way to go, oil PPT!  Too bad $50/bbl isn’t even close to high enough to save the equally debt-engorged global energy industry from implosion – let alone, with fundamentals screaming for levels closer to $30/bbl.  In other words, America is amidst an historic stagflationary nightmare – and I haven’t even mentioned 2017 Obamacare premium increases.  Let alone, as zero interest rates rapidly push thousands of insurance and pension plans towards certain bankruptcy, the prospect of a dramatic decline in “entitlements” as the baby boomer enters its retirement years.

As for “other” reasons for the Fed to hold off – let alone, after June 15^th – here’s a list of just a few of the events coinciding with the FOMC’s upcoming meeting; all of which, could potentially unleash massive political, economic, and social turmoil.  And this is just a handful of examples, with countless other “black swans” swimming around as well.

1. Further Yuan devaluations?
2. June 2^nd OPEC meeting
3. June 3^rd NFP employment report – of which, “whisper numbers” suggest will be a disaster
4. June 5^th Swiss “Unconditional Basic Income” referendum
5. June 23^rd BrExit referendum

Frankly, I could go on for another three pages describing just how “cornered” the trapped rats at the Fed are, by their own catastrophically stupid actions.  Amidst all the aforementioned, zero-interest-rate-requiring-goings-on, the only reason the Fed could even dream of raising rates is if it literally had a death wish.  To wit, the historic fiat Ponzi scheme it created must grow larger; meaning, rates can at most be zero for it to even survive.  Moreover, during an election year – let alone, one with the potential to permanently transform America (and not for the better) – the last thing the Fed wants is to catalyze an economic and financial markets cataclysm.

Not that such an action would be “Precious Metal bearish,” mind you; as aside from there being absolutely zero historical evidence suggesting as much (let alone, from such trivially small hikes, from historically low levels), the current PM bull market commenced in mid-December, the very week the Fed first (and last) raised rates!  That is, the “dollar-priced” PM bull market; as in essentially all other currencies, gold has been in a bull market for close to two years.

As Jim Grant put it yesterday, “gold isn’t a hedge against monetary disorder, it’s an investment in it.”  And “monetary disorder” is t the best euphemism imaginable for what is on the cusp of enveloping the entire world – in the best case scenario, a la Russia; and in the worst, “Venezuelan-style.”

Which is why now, more than ever, the time to act to protect yourself is so urgent – both financially, and otherwise.  And if such action includes the purchase and/or storage of Precious Metals, please call Miles Franklin at 800-822-8080, and give us a chance to earn your business.  And as always, I can be reached via email, at ahoffman@milesfranklin.com.