by Andy Hoffman, Miles Franklin:
“Gold ends weaker, amid lack of fresh, bullish news.” This was the headline yesterday afternoon, at one of the world’s “leading Precious Metal websites.” I won’t name it, but put it this way. Anyone who doesn’t know this sector would be incredulous if I they learned where such drivel emanated from. And anyone that does, would recognize the source immediately, by its time-honored traits of negligence; passive-aggressive negativity toward the product it supposedly supports; and generally speaking, journalistic laziness and analytical cluelessness.
To that end, here’s the entirety of the article. Which, given the myriad “PM bullish, everything-else-bearish” news swarming the investment world on an hourly basis; not to mention, the Cartel suppression responsible for 100% of said “weakness”; perfectly illustrates the “precious metal equivalent” of today’s dumbed down, anti-PM media.
“Gold prices ended the U.S. day session modestly lower Monday. Some lessening concerns about a big German Bank’s liquidity took buying interest away from the safe-haven metal. Traders and investors are now looking for fresh news to drive the precious metals markets. December Comex gold was last down $3.20 an ounce at $1,313.80. December Comex silver was last down $0.349 at $18.865 an ounce.
The German Deutsche Bank saw its shares stabilize late Friday following reports that the U.S. government will impose a much smaller fine on the bank than the marketplace had expected. However, that news has not been confirmed and the big German bank’s financial woes are still aplenty. World financial markets will still be watching Deutsche Bank very closely. Markets in Germany were also closed for a holiday Monday. China’s markets are closed all this week for the National Day Break holiday.
U.S. economic data released Monday include the U.S. manufacturing PMI, construction spending, and the ISM manufacturing report on business. This data was a mixed bag and had little impact on the precious metals markets today.”
First off, let’s get the obvious out of the way. Markets don’t require “fresh, bullish news” to rise – as if that were the case, the “Dow Jones Propaganda Average” wouldn’t be trading near an all-time high, when essentially all “fresh data,” for as long as I can remember, has been decidedly bearish. Or London’s FTSE-100, which is closing in on all-time high despite the Pound, in the wake of yesterdays confirmation of an official BrExit timetable, plunging to a fresh 31-year low. Great for the “1%” receiving the Bank of England’s 0% capital, and owning the financial assets backed by one of the world’s most aggressive QE schemes. To that end, gold rose sharply in Great Britain Pounds yesterday, but I guess that’s not “fresh” or “bullish” enough to be considered. Following the thought, manipulated markets could care less if news is “fresh” and “bullish,” given that government interventionists care not a whit about fundamentals, technical, or any other traditional valuation metric.
Next, the incredulity of someone – anyone – looking at today’s news flow, and not considering it “fresh” and “bullish” enough to support higher Precious Metal prices. Much less, the inane – and frankly, surreal – comment regarding “lessening concerns about a big German bank’s liquidity.” I mean, what part of the outright refutation of Friday’s blatantly obvious lie about a DOJ settlement – which, even if it occurred, would be dramatically negative for Deutsche Bank’s liquidity – can be construed as “lessening concerns” about its liquidity? Let alone, when simultaneously, Deutsche Bank was sued by the Italian government for fraudulently hiding losses at the also soon-to-be-bankrupt Banke Monte Paschi, Italy’s third largest bank? Not to mention, DB’s looming S&P downgrade to junk status, which is all but certain to occur in the coming months.
And about that “mixed bag” of U.S. economic data…To start, construction spending was an unmitigated disaster,unexpectedly posting its first year-over year decline in five years. As were automobile sales, which declined year-over-year despite record “incentive spending” (read, discounts) and massive “inventory” (read, unwanted car) growth. Not to mention, freefalling heavy truck orders – which have always signified recession; a collapsing Restaurant Performance Index; and oh yeah, huge downgrades of the Atlanta Fed’s “GDP now” and the IMF’s U.S. GDP “growth” forecasts.
Meanwhile, the PMI and ISM manufacturing indices were barely above the “recessionary threshold” of 50 – goosed data and all – featuring the weakest growth rate in three months, and the lowest new orders total in nine months. In the words of the Chief Economist of HIS Markit, which publishes the PMI data, “manufacturing growth slowed to a crawl in September, suggesting the economy is stuck in a soft-patch, amid widespread uncertainty in the lead up to the presidential election.” Which says it all, other than the ridiculous conclusion that it has anything to do with the election. I mean, we’re seeing freefalling economic activity through out the globe; and I assure you, even here, the vast majority of business owners could care less who wins.
However, what they most certainly care about is how to pay off the exploding debts they have incurred at an unprecedented rate, due to a combination of government-fostered false hopes and “cheap” money. To wit, the biggest debtor in global history, the U.S. government itself, just concluded its 2016 fiscal year last week, having added an incredible $1.42 trillion to the national debt, the third largest annual increase ever. Trailing only, I might add…wait for it…2008 and 2009, when a devastating financial crisis caused the government to spend (printed) money like drunken sailors to bailout every member of the “1%,” at the expense of everyone else. However, in 2016 there was no crisis, whilst the “evil troika” of Washington, Wall Street, and the MSM continued to tell us of how strongly the economy was “recovering,” as the stock market rocketed to new highs. And yet, the world’s “strongest” nation is an additional $1.42 trillion in the hole.
I mean, how can so much debt be piled on during such “good times” – to the point that, I kid you not, the 7.5% debt growth blew away the spending, relative to GDP, of the most ambitious U.S. government spending sprees in its 240 history. Such as, the 6.7% of GDP spent on FDR’s “New Deal” infrastructure plan in 1933, the 4.8% of GDP spent on bailing out the financial sector in 2008, and the 4.3% spent to rebuild Europe via 1948’s “Marshall Plan.” Again, there were no such spending programs in 2016, so how on Earth can debt grow that fast – particularly when interest rates have been suppressed to 200-year lows? By fraud, of course – and the increasing usage of untrackable “off balance sheet” entities. As, per this damning chart, the national debt has risen by $4 trillion more than the cumulative budget deficits of the past 13 years; no more so than in 2016, when the difference was an astounding $800 billion.
Then there’s Europe, where hundreds of millions are watching their currencies be destroyed by the BOE, ECB, and SNB, as their economic, political, and social situations implode. In Italy, this Fall’s Constitutional Reform referendum will likely result in the resignation of the pro-EU Prime Minister; whilst in France, August’s exploding unemployment rate, to a fresh 20-year high of 10.5%, has prompted speculation as to what will occur if Francois Hollande lives up to his promise to not run for re-election if the rate stays above 10%. Meanwhile in Greece, where the inevitable GrExit catastrophe looms larger with each passing day, police sprayed tear gas at marauding crowds of angry pensioners, distraught about having their pensions cut as part of the new fiscal year budget announced last night. And oh yeah, the last I looked, the U.S. didn’t even have a new fiscal year budget, despite the new fiscal year having started on Saturday. Meanwhile, Spain has no coalition government, Catalonia is pushing forward with its secession plan, and the anti-EU Alternative for Germany, Podemos (Spain), National Front (France), and Five-Star (Italy) parties are poised for major election gains in the coming 12 months
Oh, and did I mention that the U.S. government unilaterally cut of diplomatic discussions with Russia yesterday, regarding the expanding Syrian conflict that may well result in World War III? This, after accusing Putin of humanitarian atrocities, and John Kerry suggesting “military options” might be considered against one of the world’s leading nuclear superpowers. Military options? Really? For that matter, why on Earth are we in Syria in the first place, and who is our actual enemy? Not to mention, why are we sending more troops to Iraq? “Fresh, bullish news” indeed!
And what’s that I see, hot off the press? India’s Central banks just “unexpectedly” cut rates this morning, representing the 102nd Central bank rate cut of 2016 – compared to 101 in 2015, with three months to go. I mean, what could possibly be less “fresh” and “bullish” than an unexpected act of currency debauchery by the government of the world’s largest, most gold-loving, currency-hating population? Let alone, just as its seasonally strongest buying season – the Indian wedding season – is commencing.
Or the increasingly obvious fraud of last week’s OPEC “production cap.” Which frankly, was nothing more than a poorly conceived, and even more poorly executed, lie. Or the increasingly cantankerous rhetoric in what may well be the most game-changing election in U.S. history? Or continually declining corporate earnings estimates? Or…or…or…
Last but not least, the aforementioned, giant pink elephant in the room – which is, the maniacal level of price suppression that has been taken to hyperbolic levels since the year’s high water price marks, directly after June’s BrExit vote. Since then, the global political, economic, and monetary environment has deteriorated so significantly, the “necessity” to increase the level of market manipulation has gone parabolic. Which is why we are seeing such egregiously blatant rigs on a daily basis – like Deutsche Bank stock, which miraculously levitates despite not a shred of positive news; or paper Precious Metals, which the Cartel is attacking with impunity. Such as this morning’s “sixth sigma” attacks at the COMEX open (I “can’t wait” to see how many billions’ worth of paper contracts were thrown at them this time), with literally no other markets budging. Oh well, I guess this is what happens when no “fresh, bullish news” is around to support prices.
My friends, I cannot emphasize enough just how “fresh” and “bullish” the PM news actually is, and has been. Or, for that matter, how dramatically more so it will become in the coming months, as history’s largest, most destructive fiat Ponzi scheme implodes. Which is why, when such ridiculously blatant Cartel raids come around, you should view them as the manna from heaven they are. In my view, given the aforementioned “fresh, bullish news,” it won’t be long before the physical demand surge such paper attacks engender is realized, with a vengeance!
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