“Anti-Austerity” Mania

February 16, 2015

It’s midday Sunday; likely, within 24 hours of Greece either making an historic stand for its rights, or giving in to a handful of financial sociopaths – and in doing so, forsaking last month’s mandate by the majority of Greek citizens.  True, the outcome may not necessarily be “black versus white”; as no doubt, if an agreement is made between Greece and the Euro Group, it will be carefully couched in language proclaiming “success.”  In other words, pure propaganda; in a desperate, last ditch effort to prevent history’s largest Ponzi scheme from imploding NOW.  Unquestionably, the global fiat currency regime is in its final death throes – with the only question being, can it survive the current Greek crisis?  And if so, for how much longer?

After all, global economic activity is in all-out freefall; as evidenced by Friday’s all-time low of the Baltic Dry Index, which could plunge dramatically if this weekend’s West Coast dockworkers strike continues; the North American rig count, plunging at its most rapid rate in 20 years; and the U.S. Consumer Confidence Index, which last week had its largest “miss” versus expectations ever.  Meanwhile, physical Precious Metal demand is going parabolic – particularly in China, per January’s record gold imports –  making it more and more likely that the Cartel’s 15-year reign of terror is nearing its end; and with it, Central banks’ long-standing control of financial markets.  To wit, this weekend’s comment by leading Cartel whistleblower Andrew Maguire, on just how intense the “gold wars” have become…

“Never before in the history of the market have I seen such strong physical buyers willing to sit and take on all the sell orders hitting the tape.” 

Yes, today’s theme is unquestionably the financial mania created by unprecedented money printing, market manipulation and propaganda since the monetary system broke in 2008; but particularly, since Obama’s “closed door meeting” with the top “TBTF” bank CEOs on April 11th, 2013.  Since then, the “Dow Jones Propaganda Average” has been goosed by the PPT’s “dead ringer” algorithm nearly every day; whilst paper gold and silver have relentlessly attacked every second the PM markets are open.  Conversely, TPTB have clearly lost control of nearly all other markets – from commodities to currencies – whilst global economic activity has collapsed.  Thus, it’s just a matter of time before these “last to go” markets, too, are swamped by “Economic Mother Nature.”

Everywhere one looks – politically, economically, and socially – madness reigns.  As in Ukraine, where vicious, lethal fighting continues as if Thursday’s “cease fire” never occurred.  Or Iraq, where U.S. “boots on the ground” are actively engaging “ISIS,” threatening to blow wide open the already gaping wound that is America’s international reputation – or whatever remains of it.  Let alone, as blood-thirsty U.S. politicians spew reprehensible lies to push us toward World War III – such as this incredible story of Senator Inhofe presenting Congress with falsified photos of Russian troops in the Ukraine.  Then again, in difficult times, particularly when dealing with a dramatically “dumbed-down” population, propaganda tends to work like a charm; as Adolf Hitler knew well, per this quote from his autobiography, Mein Kampf, which I am currently reading.

Propaganda’s chief function is to convince the masses, whose slowness of understanding needs to be given time so they may absorb information; as only constant repetition will finally succeed in imprinting an idea on the memory of the crowd.”

Yes, madness; which even my relentless discussions of money printing, market manipulation, and propaganda fail to capture, in terms of just how far from reality they have pushed asset values.  To wit, the utterly astonishing disparities between stock prices and economic trends in essentially all markets backed by major Central banks – as depicted in MUST SEE charts like this and this and this.  Which in turn, generate “renewed optimism” each week; as amazingly, U.S. economic data expectations continue to be positive despite the U.S. macroeconomic picture sitting at a multi-year low.  Last week alone, all six major economic reports declined – in all cases, by “more than expected”; including retail sales, mortgage purchase applications, wholesale sales, jobless claims, small business confidence, and consumer confidence – not to mention, the unexpected surge in petroleum inventories.  And yet, as always, essentially all Wall Street estimates for this week’s reports assume growth!

Yes, “par for the course” for a manipulated world gone mad; in which the few remaining market participants – other than government and “TBTF” bank algorithms – have been brainwashed into believing that manipulated stock, bond, currency, and precious metal prices, among others, actually suggest “consensus views” – contrary not only to centuries worth of data and conventional wisdom, but common sense itself.

And nowhere is such lunacy in full force – per this Michael Pento article – a growing confidence that because “austerity” has failed, the re-emergence of “anti-austerity” policies – by some form of perverted “logic” – must “succeed.”  In layman’s terms, like trying to “cure” a drug addict’s withdrawal symptoms with larger doses of drugs.  Yes, because TPTB have managed to goose the Dow, DAX, and Nikkei – among others – via money printing and market manipulation; whilst suppressing Precious Metals and watching the entire world front run Central bank monetization of sovereign bonds, the latest meme is that “markets” anticipate new, wildly irresponsible deficit spending schemes will somehow work where austerity didn’t.  And not just in Greece, but other PIIGS, too – and essentially everywhere else.  Including the U.S., which just two years after its pathetic “fiscal cliff”, “debt ceiling,” and “sequester” battles – and three years after losing its triple-AAA rating (when its debt hit $14.1 trillion, vs. $18.1 trillion today) – is proposing its largest deficit spending plan yet.

No matter that economic activity – both in the U.S. and abroad – is much lower than when “austerity” started in 2010-12; that debt, on all levels, is much higher; or that the average currency has lost nearly 40%, yielding a vicious, economy-destroying combination of inflationary and deflationary forces.  No, so long as manipulated markets paint a fraudulent picture, why not believe current policy is “working” – and capitalize on it politically?

Thus, the outcome of this week’s Greek “decision” – which theoretically, could be delayed until the true bailout deadline of February 28th – is so vitally important.  If Greece defies the Euro Group completely – exiting the Euro and defaulting on its debt, all bets are off, as the “end game” will have commenced.  However, if Alexis Tsipras caves in to Brussels beaurocrats – yielding increased and extended bailouts – it could signal a new, unprecedented phase of European debt expansion; yielding still larger wealth disparity, and welfare dependence.  Actual economic activity will not improve a whit; and in fact, will weaken further as nothing whatsoever will have changed, other than parabolic debt accumulation.  Which will only fuel further QE schemes and market manipulations, as the forces of reality push still harder on artificial asset prices; i.e., the all-time House of Cards.  In a nutshell, as described by Hans-Werner Sinn, head of Germany’s IFO economic institute, “Grexit would be best, because if Greece doesn’t exit the euro, it will keep adding new debt it will be unable to repay.”                                                                                                                                                                                                                                              

That said, the rest of Europe is waiting to see how the “Greek Tragedy” resolves itself – at least, in the near term; as countless other nations have “Syriza-like” movements on the verge of taking power – starting with much larger Spain, where the newly formed Podemos party’s charismatic leader, Pablo Iglesias Turrión , appears a shoo-in to become Prime Minister in December’s elections.  As well as Italy, France, and others, as the “revenge of the people” I forecast last year comes to fruition.

Essentially, said “anti-austerity mania” will dramatically worsen the current, historically bad social, economic, and political conditions engulfing Europe; much less, anywhere that such wild deficit spending is practiced – from China, to Japan, America, and anywhere that local currencies haven’t yet been destroyed.  “Anti-austerity” is what got us into this mess in the first place – starting with abandonment of the gold standard in 1971; and now that global debt sits at record levels, the effect will be no different than pouring gasoline on a fire.

Remember, the only way “anti-austerity” can be deemed “successful” is if TPTB can maintain – and expand – record high paper asset valuations in the face of plunging fundamentals; whilst maintaining record low Precious Metal valuations in the face of explosively positive fundamentals.  To that end, what makes more sense, buying stocks and bonds at all-time highs, or gold and silver at all-time lows?


Courtesy of http://blog.milesfranklin.com

Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.

Gold prices fall by Rs 50 on low demand