7 May 2017
by Andy Hoffman, Miles Franklin:
The principal reason we hold gold and silver, is that no matter how much their paper derivatives are manipulated, the underlying physical market is governed by “Economic Mother Nature.” This is why the Cartel’s efforts to mask the reality that history’s largest, most destructive fiat Ponzi scheme is collapsing will spectacularly fail; as, per what the Miles Franklin Blog has discussed throughout this horrifying spectacle of deceit, global physical demand is surging, whilst supply is plunging.
Conversely, historically oversupplied commodities like crude oil and “Dr. Copper” can only be propped up for so long by the “oil PPT” and false “Trump-flation” meme (which by the way, won’t be “revived” by the House passing a watered down Obamacare bill that likely, won’t even be passed by the Senate). In the former case, the modest price increases caused by the fraudulent OPEC “production cut” – which, with each passing day, looks more and more unlikely to be renewed later this month – have caused dramatic non-OPEC production increases, at a time when demand is unequivocally declining due to the global recession no one wants to admit.
To the point that, global inventories are higher than they were when said “agreement” was made in November; and as of yesterday, oil prices lower. The same goes for copper; which directly after Election Day, skyrocketed on the “hopium” of a demand increase that never came. Which is probably why prices are plunging anew, amidst surging inventories and – yep, you guessed it – weak demand. To that end, the CRB Commodity Index is on the cusp of breaking key support levels that have held for the entirety of the fraudulent “Trump-flation” meme, and then some.
Likewise, no matter what governments say economic activity looks like (like the ten-year-low 4.4% “unemployment rate” reported this morning, despite collapsing economic activity), it can’t change what is actually occurring. And as we speak, global economy activity is weaker than at any time in our lifetimes, aside from a handful of weeks at the height of the 2008 crisis and 9/11 aftermath; in each case, when the world temporarily went into “deer in headlights” mode. Just look at China’s plunging manufacturing PMI, or all U.S. “hard data” – like yesterday’s plunging productivity and factory orders; the latter of which, was supported only by soon-to-explode government military spending, and soon-to-collapse oilfield equipment orders. And oh yeah, the worst GDP quarter in three years, following the worst GDP year since 2009.
And now that the commodity price manipulation is collapsing, this stark reality will be exposed to the entire world – which can only get much worse, given unprecedented industrial oversupply; disastrous demographic trends; and parabolic debt accumulation. This is what I initially predicted in January 2015’s “direst prediction of all”; followed up by yesterday’s “Harry Dent is right about one thing!”; depicting why Central bankers’ “itchy trigger fingers,” including the Fed’s, are on the cusp of the largest money printing explosion in history. And why, at all costs, interest rates must be held at, or below, today’s, for all intents and purposes, 5,000 year lows.
Everywhere one looks, bubbles are serially collapsing – from crude oil; to Toronto real estate; U.S. subprime auto and student loans; and the Grand-daddy of them all, Chinese “Wealth Management Products.” And shortly, many more will, no matter how much “money” Central banks print to buy stock futures and naked short paper Precious Metals.
And when the “most overdue financial crisis in history” inevitably arrives, said debt growth will turn hyperbolic, whilst Central banks monetize every fixed income instrument on the planet. Which in turn, will cause yet another immutable financial relationship to return to the fore, per this chart from Gary Christenson.
This, whilst any number of “exogenous” events threaten to blow this inevitable – perhaps, imminent – “global economic disaster” sky high; such as, for instance, wars, sovereign defaults, and political regime changes; the latter of which, may well occur this weekend, if the French pull a “BrExit,” and do what’s best for their dying nation.
Either way, Precious Metals are as “oversold” as they’ve been in years; as futures market speculators, yet again fleeced by market rigging, unwind the record paper positions built up amidst the single greatest manipulative naked shorting episode in Cartel history – necessitated by the greatest speculative demand in COMEX, due to unprecedentedly PiMBEEB news flow; which I assure you, will become exponentially more so, with each passing day.
My friends, there is NO WAY the upcoming, unparalleled “global economic disaster” can be averted; and with it, a surge in safe-haven asset demand unlike any in modern times. The largely un-manipulatable crypto-currency markets are already starting to see it; and shortly, the historically undervalued Precious Metal markets will, too; i.e., crypto’s “twin destroyer of the fiat regime.” To that end, if you are considering purchasing and/or storing gold, silver, or platinum, we hope you’ll give Miles Franklin – in business for 28 years, without a single registered complaint – the opportunity to earn your business.
P.S. Regarding said 4.4% “unemployment rate,” released in the April NFP jobs report just before I hit “send” – it was predicated on 255,000 phantom “birth/death model” jobs; and yet another Labor Force Participation rate decline, to within basis points of a new four-decade low. Moreover, March’s already abysmal 98,000 job report was revised down to 79,000; whilst average April’s hourly wages not only disappointed, whilst March’s were revised down as well. And how about that? The two biggest “job” producing categories were healthcare and – despite collapsing restaurant sales, “waiters and bartenders.” I mean, give me a break already!
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