Everything Is Fixed…Not!
It’s early Tuesday – and as I said in my first official Tweet this morning, don’t count on the “summer doldrums” lasting too long. Particularly in the case of Precious Metals, if you believe a blatantly “BS NFP Report,” defying every other piece of economic data, will prevent terrified people, the world round, from PROTECTING themselves from the hyperinflation some currencies are already experiencing, and others shortly will.
To think, just a year ago people were flocking into silver so aggressively, premiums surged and supply dried up, despite no material political or financial crisis. Apparently, the principal reason was fear of the “Shemitah” – which is a great commentary on human nature, in that people are more likely to fear the mystical, than what’s actually occurring in front of their eyes. So far, not a single non-financial theory has panned out – from solar flare occurrences; to biblical prophecies; and the most ridiculous of all – “web bots” – which was so out of leftfield, even I considered it for a second, until it was proven to be a sham like the others. To that end, there are no “good” or “bad” guys planning our fates, nor “guaranteed” correlations between gold and the Yen/dollar exchange rate; or “elites” controlling the world, like the Bildeberg’s, Rothschild’s, or the ghost of JP Morgan.
Sorry if I’m offending anyone, but I call it like I see it – and when it comes to financial market movements, the same factors are in play today as under Wall Street’s buttonwood tree in 1792. Not to mention, when Queen Elizabeth I charted the East India Company in 1600, or when cavemen traded beaver pelts for food. Which are, the eternal battles between free market forces and manipulation. Yes, bankers, politicians, and corporate titans have been the focal points of manipulation for time immemorial – and always will be, given their access to the corruptive forces of money and power. However, they rarely, if ever, have plans “grander” than maintaining a status quo that maintains their wealth and power – which at times, requires collusion with others; but usually, doesn’t.
Once and for all, anyone that tells you they “know” something will happen – let alone, based on conspiratorial, mystical, biblical, or astrological “proof” – should be considered with a boulder-sized grain of salt. As a financial “scientist,” I seek actual proof for my conclusions, which none of these people provide, no matter how confident they sound. More importantly, not a single one has been “right,” as far as I can see. And definitely not due to the actual unfolding of “predicted” mystical, biblical, astrological, or “web bot” events. Or, for that matter, “proprietary analysis” of any kind, be it fundamental, technical, cyclical, demographic, or otherwise. And by the way, those that claim to be “right,” typically hedged their forecasts so they can always claim victory – even if such forecasts were ambiguous, evergreen, or uninvestable. Or better yet, they ignore their failures completely, which typically outnumber their successes by a large margin. Frankly, if someone were so good at unconventional market forecasting, they’d be as rich as Biff in Back to the Future II, who had a sports almanac from the future.
Why am I so irritable this morning? Because TPTB have, for the time being, quelled well-justified fears with the most maniacal market manipulations in history. And it’s not like they haven’t told you what they’re doing, even though much of it – like the PPT’s blatant, unrelenting monetization of U.S. stocks – is done covertly. And the craziest part is that so much of the load is carried by the U.S., in knowing it can get away with – for the time being – hyper-inflating its “reserve currency” more rapidly than any other country. Not to mention, its global domination of high frequency trading, off balance sheet financial engineering, and economic data manipulation.
To the contrary, as I discussed this weekend, most overseas stocks are declining. Heck, even here in the States, most stocks are down despite the PPT-supported “Dow Jones Propaganda Average” sitting at an all-time (nominal) high, amidst collapsing GDP and corporate earnings; and record-high P/E, P/CF, and EV/EBITDA valuations. The CRB commodity index is not far from its 2009 spike bottom low; the average currency is at, near, or in many cases well below its previous all-time low; whilst political revolutions are exploding, and Precious Metals have outperformed all asset classes – maniacal Cartel suppression notwithstanding. Other than, that is, sovereign Treasury bonds, care of unprecedented QE and NIRP policies that have some of the world’s worst credits trading at or below zero yields. I mean, geez, Spain has not had an operating government for a year; witnessed its wealthiest province, encompassing 25% of its economy, vote to secede last week; and has one of the ugliest financial situations in Europe. And yet, care of ECB QE, Spanish 10-year bond yields plunged below 1% yesterday, for the first time in the nation’s 500-year history!
For that matter, we’re told the BrExit contagion has “passed” because financial market order has been restored. Well, yeah, if you don’t consider the European banking stocks at the heart of the issue – like Deutsche Bank, whose bounce to $13.50/share from last week’s all-time low of $12.50, remains 91% below its 2007 high. Not to mention, it still has $70+ trillion of toxic derivative exposure; is still hemorrhaging money; and is still on the verge of being downgraded to junk status, amidst a rapidly deteriorating environment of plunging commodities, currencies, and geopolitical stability.
In the UK – you know, where the BrExit actually occurred, the Bank of England lowered interest rates and increased QE last week, amidst a dramatic downgrading of its economic outlook. Which of course, will not be a UK-only situation, but a global one – particularly in Europe, where France’s “economic emergency” was just extended by six months, setting the stage for the anti-Euro National Front party to take power next year; Italy’s anti-Euro “Five Star Movement” will likely take power after Matteo Renzi’s “Parliamentary reform” referendum fails in October – or sooner if its banking system fails; Spain is dealing wit the aforementioned, horrific political and economic issues; Portugal’s banks, too, are on the brink of collapse; Greece needs another bailout; and Turkey has become the most dangerously volatile nation on the continent, to name but a few of the issues that have decidedly not been “fixed.”
In Japan, the BOJ has pledged to essentially buy the entire stock market, atop the nearly 100% ownership it has of its “helicopter-like” bond market. China’s economic collapse is taking on epic proportions, as it prepares for the massive, inevitable Yuan devaluation that will hit the global economy like a Cat-5 hurricane. Emerging market currencies are being destroyed by plunging commodity prices and accelerating capital flight; while here in the States, amidst the three worst quarters of GDP “growth” since the 2008-09 crisis – “double seasonal adjustments” and all – we are on the cusp of a polarizing, nation-destroying election campaign.
This, amidst the final, catastrophic stage of history’s largest, most destructive fiat Ponzi scheme – characterized by exploding debt; and collapsing economic activity, commodity prices, and currencies. And no, the Dow is not higher (nor gold lower) due to, LOL, the “falling yen.” As, per below, the Yen, following the BOJ’s historic equity monetization announcement last week, is essentially at a 52-week high.
So for those of you – and I seriously doubt there are many – who actually believe “everything’s fixed” because the PPT, Fed, Exchange Stabilization Fund, gold Cartel, Bureau of Labor Statistics, and a host of other manipulative agencies, overt and covert, have temporarily calmed markets in August’s “dog days,” I advise you to “snap out of it,” and quickly. Whether the world escapes August intact, before the next “BrExit event” arrives to cause mass economic, financial, geopolitical, social, and monetary chaos is up for debate. However, the odds of something really bad arriving shortly thereafter have never been higher – as no matter where one looks, the “rubber” is hitting the “road.”
Which is why now, more than ever, the urgency to PROTECT YOURSELF while you still can, in as many ways as possible, has never been more urgent. 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.
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.