The Phaserl


Gold Always Wins in the End

by Andrew Hoffman, Miles Franklin:

Monday’s are the toughest time to write, given how the significant quantity of “horrible headlines” each weekend.  TPTB, as always, did their best to prevent the masses from realizing how scary things are getting, via some of the most blatant, last hour “hail mary” rallies imaginable.  Recall Friday morning, when we wrote of the “mysterious” spikes we should expect in interest rates as the Fed desperately defends them, in their unmitigated terror that plunging rates will signal their complete and utter failure in reviving the economy.  And thus, it’s no surprise Zero Hedge specifically characterized Friday’s late day rally – boosting the benchmark 10-year Treasury yield from 2.50% to 2.53%, whilst completing a perfect “dead ringer” pattern for the Dow Jones Propaganda Average – as “mysterious.”

That said, the news was anything but equity supportive; and as you’ll see by the terrifying list of “horrible headlines” below, it’s difficult to believe any objective person won’t shortly realize what must ultimately occur.  To that end – demonstrating extreme historical irony – it appears that military conflict between China and Vietnam is borderline imminent. 

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1 comment to Gold Always Wins in the End

  • Ed_B

    This is yet another great article. Thanks, Andy! 🙂

    “There’s a reason why even the most mainstream food companies – like Campbell’s Soup this morning – are reporting weak revenues and poor sales outlooks; as plain and simple, people can’t afford food as they once did, given surging prices and plunging real incomes.”

    There is a bizarre twist in this as far as Campbell’s Soup goes. All manner of businesses that sell to the public have been blaming our recent bad weather for their poor economic performance; particularly the very cold weather of this past winter and early spring. But, is it not counter-intuitive that a food that is typically eaten in quantity during cold weather did not do well and its maker is suffering from poor financial performance? Add to that, soup is one of the least expensive foods one can eat these days and Campbell’s Soup SHOULD have been on a real tear recently. But they’re not… and therein lies yet another nail in the coffin of bad weather causing poor economic performance. If ever anything debunked this excuse, these two ideas are it.

    “By now, it should be clear to all that McDonalds’ “Dollar Menu” has become a major loss leader…”

    I only eat at fast food places about once every other month, so it’s not a regular part of my diet. When McD’s dollar menu first came out, there were a few things on it that weren’t bad. These days, however, I never get anything from the dollar menu because, knowing how the economy is tanking, does anyone REALLY want to eat something that only costs a dollar? Maybe, if a dollar is all you have and you are hungry. Otherwise, opt for something that is likely to have at least SOME nutrition to it.

    “Anyhow, the shocking, terrifying takeaway from such dinners – according to first-hand accounts – is Bernanke does not expect the Fed Funds rate to rise back to its historical average of 4% in his lifetime. In other words, “ZIRP to Infinity.””

    I’m not so sure I would take it that far. Bernanke is no spring chicken. People DO die in their 60s now and then, so “the rest of his life” will likely be MUCH shorter than “infinity”. lol

    Not that we’re not stuck to the tar-baby of QE and ZIRP, of course. We are and we will have a helluva hard time getting unstuck. In fact, it may not be possible without a complete systemic collapse first and every economy in the world pretty much starting over from scratch. If that possibility is not a complete rejection of the most recent past and current economic policies, I do not know what would be.

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