by Andy Hoffman, Miles Franklin:
It’s Monday, and fear is in the air, even if the PPT has “Dow Jones Propaganda Average” futures slightly higher. Last week, the “Fed might raise rates” meme died on the vine – first Wednesday, when the Fed, like a deer in headlights, noted nothing other than it’s perpetual “data dependence; with the “death blow” coming Friday, with possibly the worst GDP “miss” in U.S. history.
In both cases, desperate Cartel attempts to cover their all-time high gold and silver shorts were foiled, setting the stage for an historic breakout in the coming months. And by historic, I mean the all-time highs of $1,920/oz and $50/oz, respectively, may well be reached in the next 12 months – prompting historic physical shortages, particularly in silver.
That said, consider that while 300 million people live in the U.S., 7.2 billion reside elsewhere – the vast majority of which, will witness an historic Precious Metals rally with prices alreadyat, near, or in many cases well above, previous all-time highs. In other words, per the title of this weekend’s article, “First Central Banks Die. Now Government Statisticians. Next Up, the Gold Cartel.”
This weekend may have appeared “calm,” as most of the Western world is on vacation. However, the bomb that was detonated from a “suspicious package” in the main Olympic stadium in Rio DeJaneiro was as symbolic of the true state of the world as you can get. Not to mention, Saudi businesses of all kinds being offered the equivalent of a bailout, via nearly zero-cost loans, as the implosion of the “oil PPT” – oil is below $41/bbl as I write – puts countless OPEC and non-OPEC nations on the cusp of bankruptcy. Let alone, currencies in advanced stages of collapse – like the Nigerian Naira; and those that will imminently be devalued, like the petrodollar-pegged Saudi Riyal.
But don’t worry, Central banks are preparing the printing presses for hyperdrive – like the Bank of Japan, which last week doubled its unprecedented equity monetization scheme, despite already owning more than half of the entire Japanese ETF market. Putting such lunacy into perspective, such a purchase, when comparing the size of the Japanese and U.S. equity markets, would be the equivalent of Fed owning $400 billion of U.S. stocks today, and purchasing another $600 billion in the next two years. And yet, the Nikkei is still 60% below its peak level, achieved 27 years ago. That is, in nominal terms – as accounting for the BOJ’s maniacal destruction of the Yen, it’s down closer to 90% in real terms! This, my friends, is the path you can expect all Western Central banks to take in the coming years – and in some cases, months.
That said, this weekend’s “fear” was concentrated in Europe, where the aftermath of Friday’s unconscionably rigged “stress tests” raged behind closed board room and Central bank doors. Only Bank Monte Paschi – the world’s oldest surviving bank, and the third largest in Italy – officially “failed.” However, the more one reads of the comically understated risks of the “stressful” situation used as the baseline, the clearer it becomes that nearly all of Europe’s banking system is on the cusp of collapse. Particularly, as far more stressful scenarios are likely to play out, perhaps by year end. In fact, Italy’s largest bank, Unicredit, nearly failed itself – and with just slightly more “stressful” parameters, Deutsche Bank and countless other would have, too. Worse yet, Portuguese and Greek banks were, incredulously, left out of the study entirely – as undoubtedly most or all would have failed.
As for Monte Paschi’s “bailout” – against the spirit of ECB rules effectuated just seven months ago – the measly €5 billion of capital and government guarantees essentially bankrupts Italy’s “Atlante” bailout fund, just three months after being hastily created. It doesn’t even put a dent in Monte Paschi’s bad loans, and highlights just how desperate Italy’s banks – and those of most of Europe – are. Which is probably why the Italian stock market, down 30% in the last 52 weeks already, is down again today. As are many European banks – such as Deutsche Bank, the “world’s most systematically dangerous institution,” which is just $.75/share from the all-time low set during the post-BrExit stock plunge.
More importantly, the Cartel’s best efforts to suppress PM’s overnight are failing. In gold’s case, the 151st “Sunday Night Sentiment” raid of the past 157 weeks – actually, two of them; plus, the 673rd “2:15 AM” EST attack of the past 775 trading days; has barely put a dent in gold – which in most global currencies, is higher, as the oil price decline is hitting many “commodity currencies” anew.
That said, the true “battleground” is silver, where the Cartel is on the cusp of being blow to Kingdom Come. This weekend, I wrote of how the Cartel again failed to cover its record silver shorts as of Tuesday’s “Commitment of Traders” weekly cycle close. And given Wednesday and Friday’s big PM surges – following the aforementioned FOMC statement and GDP reports – they likely were forced to increase said shorts further. Which is why I postulated they’d be “on the run” first thing today, which they most certainly are.
To that end, I have spent the past month noting how silver’s 50 week moving average, of $20.50/oz, was on the verge of being breached to the upside, for the first time since the Cartel knocked it below that level during April 2013’s “Alternative Currency Destruction” raids. As it turns out, the 50 week moving average is now $20.46/oz – which is essentially where silver is trading, as the COMEX trading day commences. Trust me, TPTB will doeverything in their power – from the manipulation of economic data; to maniacal PM naked shorting; whilst attempting to support oil prices, bank stocks, and everything else deemed “systematically important,” to find a few more inches to kick the can.
However, my guess is they will decidedly, and violently, fail, as history’s largest, most destructive fiat Ponzi scheme implodes before their eyes. Which is why now, more than ever, the time to PROTECT ONESELF has never been more urgent – particularly in the U.S., where Precious Metals are both historically undervalued, care of the Cartel, and still readily available.
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