Today, I’m going to demonstrate, in spades, why the Miles Franklin
Blog is such a valuable, FREE resource – and consequently, why “all
bullion dealers are not commodities.” I try to do this every day, and
this October, will mark my five-year anniversary at Miles Franklin. However,
it’s in “times of need” like today – when “the powers that be” are doing
their best to prevent you from protecting themselves from the death of the
historically destructive monetary paradigm they themselves created – when
truth tellers like us are of maximum value. Not to mention, that when
purchasing, selling, or storing bullion – as with anything in life – “you
get what you pay for.”
Unfortunately, the Cartel “won” the current battle for short-term price
control – in finally, with the aid of a lie as egregious as the “we killed
bin Laden” card utilized to quell the 2011 silver price spike (i.e., June
“rate hike” propaganda) – getting perpetually stupid COMEX “specs” to pitch
their positions, causing the Precious Metal bull market to “correct.” This,
amidst the most “PM bullish, everything-else-bearish” news flow to date. To
that end, someone I have great respect for just wrote an extremely cynical
article of the past week’s proceedings, titled the “end of the Precious Metal
fake rally” – opining that we have returned to the PM “hostage market” of the
past five years.
In my view, he is failing to see the forest through the trees – as the
unequivocally modest price declines were achieved at great intermediate-term
cost. For one, the prices of both gold and silver are now far closer to
“oversold” than “overbought” – and this, with neither having come close to
their 200 day moving averages of $1,162/oz and $15.18/oz, respectively. Heck,
even after this week’s monstrous Cartel raid, they are barely below their 50
day moving averages of $1,251/oz and $16.25/oz, respectively.
More importantly, in the bigger picture, such blatant machinations have
exposed their desperation to the entire world – in taking their
unquestionably “naked” shorts to all-time high levels, despite dollar-priced
gold and silver prices having barely risen off their bear market lows. And
the reason I say “dollar-priced” gold and silver – per the title of a 2012 article of
the same name – is that just no more than 10% of the global population
utilizes dollars as their primary currency; as opposed to the “other 90%,”
who use currencies that have devalued far more dramatically since the system broke
in 2008. To that end, my friend Paul Brodsky wrote today of how the monetary
system, care of ZIRP, NIRP, and QE, has been diluted by an incredible 47%
since then – which is probably why gold has been the world’s best
investment of the past decade; and why institutionalPM
demand has finally returned.
More importantly, what has been the physical cost of this
reckless paper gambit – in igniting record gold and silver demand, atop
levels that were already at all-time highs? Which is no more
obviously witnessed than in the historically tight physical silver market;
starting with the U.S. Mint itself – which, despite unprecedented rationing,
is on a pace to sell 22% more Silver Eagles than last year’s record amount…
…and the Royal Canadian Mint, whose data is published with a one quarter
lag, but purports a projected 2016 sales level (of Silver Maple Leafs) 24%
above 2015’s record level; including 11% above the third quarter of 2015,
during which, the retail bullion industry experienced its most acute silver
shortage since the 2008 financial crisis…
Of course, gold and silver are just the “sideshow” to the “main event” of
the collapse of history’s largest, most destructive fiat Ponzi scheme – as
starkly evidenced by the renewed plunge of most global currencies. Which, I
might add, accelerated significantly when the Fed was stupid enough to pretend
it might raise interest rates in June. But nowhere more so than in the center
of the historic economic bubble – CHINA – where last night, the PBOC, as I
predicted, took the Yuan/dollar exchange rate below the August 2015
lows; i.e., the initial stage of the cataclysmic
devaluation that is just getting started.
The Yuan/dollar – and now that the PBOC is targeting other currencies as
well, the Yuan relative to the IMF’s “strategic currency basket” – is the
epicenter of the final, thermonuclear battle of the “final currency
war.” For those who haven’t been watching, the PBOC has been quietly
devaluing the Yuan for several weeks now, in response to its collapsing
export market. However, since the Fed was dumb enough to unleash last week’s
anti-gold propaganda offensive, the PBOC has “stepped up” the devaluation, as
highlighted by pushing the Yuan/dollar exchange rate below the August lows
last night. To that end, the more the Fed plays this “losing card” – which
will undoubtedly “come to a head” at the June 15th FOMC meeting –
the more it risks a market de-stabilizing, and Precious Metal-bullish,
currency shock. Which will come anyway, likely sooner rather than later,
irrespective of what the Fed does next month.
Of course, the bigger issue is not the short-term movement of financial
markets – unless of course, they significantly “de-stabilize” – but the
longer-term destruction of global economic activity, living standards, and
social stability. When reading thisarticle,
for instance, describing just how much of a failure 25 years of Japanese
monetary policy easing has been; and seeing the below chart of the horrific
economic fate of American millennials; it’s difficult to ignore the
terrifying political and economic changes that are coming. Exponentially
rising money printing – not to mention, historically ominous demographics –
are causing a parabolic, worldwide surge
in the cost of living, which will only worsen as the fiat currency
paradigm completes its terminal stage.
Thus, for those worried that the Cartel will be able to drive Precious
Metal prices back down to their lows – and “kick the can” several more years
– I would advise you to sit back, take a deep breath, and look around you, no
matter where you live. Nothing’s “easy” about the death of a global paradigm
– particularly when said paradigm will result in the greatest political,
economic, and social changes in generations, none for the better. Not to
mention, the greatest “wealth transfer” – from unbacked paper, to real
physical assets – in history.
