by Andy Hoffman, Miles Franklin:
It’s Wednesday – and let’s start with a little background, as we head into yet another episode of, LOL, the Fed’s “most important meeting ever.” To that end, recall that it was just seven weeks ago, on April 27th, when Yellen and Co published one of their most dovish statements yet, catalyzing a gold surge from $1,235 to $1,300 in less than a week’s time. This forced the Cartel – er, the COMEX “Commercials” – to extend their already near-record naked short positions further; which unfortunately for them, couldn’t even push gold below $1,270/oz, despite every imaginable manipulative effort.
Thus, the “FOMC minutes attack” was launched on May 18th – which I vehemently predicted would miserably fail in an epic, 42-minute Audioblog a day later, principally due to my belief that there was not a chance the Fed would raise rates in June or July – as if such an event, were they suicidal enough to attempt it, was “gold negative” in today’s economic and monetary environment. Sure, they got paper gold to fall to, LOL, $1,199.80 on Sunday night, May 29th; i.e., Memorial Day Eve, when not a single trader was working, in advance of the national holiday.
And when one of the worst NFP jobs reports ever was published a week later, PMs rocketed higher anew – recovering nearly all their Cartel-orchestrated losses in just two weeks’ time.
Better yet, during this rip-roaring – yet, maniacally, blatantly capped – rally, said “Commercials” were barely able to dent their now all-time high naked short positions; particularly in gold, where they were stupid enough to “double down” last week, just before the price rocketed nearly $50/oz in the ensuing four trading days.
Not only that, but physical demand exploded as well, causing 15% of the entire remaining COMEX registered silver position to be withdrawn – to an all-time low level, below the April 2011 low, which occurred when when silver surged to $50/oz. To the point that, as we speak, a mere $390 million of metal remains; which, to put it into context, is how much sovereign and corporate bonds the ECB is now “monetizing” – with freshly printed Euros – every three daydy s!
And then there’s the “news” to consider – such as…
1. Catastrophic plunges of global economic data, such as the 15% plummet in Japanese machine orders; across-the-board declines in Chinese industrial activity to essentially, for all intents and purposes, modern era all-time lows; and egads, this morning’s horrific, “unexpected” 0.4% plunge in U.S. May industrial production.
2. The odds of a BrExit exploding higher, to the point that some polls now show the “leaves” as much as 20 percentage points ahead of the “remains.” Consequently, an “unnamed” EU official stated yesterday that should the referendum pass, the ECB would issue a statement the following morning that it would do, LOL, “whatever it takes” to maintain adequate market liquidity.
3. The “Lehman of Europe,” Deutschebank, has seen its stock plung to an all-time low, down 8% in the past two days alone. Not to mention, Credit Suisse, whose stock “quietly” plunged to all-time lows as well.
4. The worst U.S. “terror attack” since 9/11 occurred, whose “initital target” may well have been Disneyworld.
5. Western world sovereign yields plunged to all-time low levels – with nearly $11 trillion worth now trading at negative yields, and the benchmark 10-year U.S. Treasury yield, at 1.6%, a mere 15 basis points from its own all-time low.
6. Plunging global equities, commodities (even “oil PPT” supported crude), and currencies
7. Global Financial Stress surged to levels only witnessed in the past five years during the late 2011 U.S. credit rating downgrade, and accompanying EU crisis; the August 2015 Yuan devaluation; and the December 2015 Fed rate hike
8. Last night, the PBOC devalued the Yuan below 6.6 to the dollar for the first time since January 2011! And oh yeah, that other competing currency, Bitcoin, principally due to explosive Chinese buying, rocketed from $450 in late May to $725 earlier this week.
9. Heck, there wasn’t even a prototypical “pre-FOMC drift” stock rally yesterday – principally due to the plunging prices of Deutschebank stock, “Dr. Copper,” and the British Pound, amongst others.
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