If this was a decade ago, the merger of Baker Hughes and Halliburton would dominate my attention, as I covered them like blankets from 1995-2005. Every move they made, every step they took, I was watching them, writing of them and adjusting my multi-thousand line “earnings models.” In other words, I was as devoted to oilfield service then as I am to precious metals now; only now, not is my career committed to gold and silver and significant amounts of my free time – but my life’s savings as well.
Today, oilfield services are no longer a part of my economic consciousness – replaced entirely by the upcoming cataclysm that global financial markets, economic activity and geopolitics are headed for. The fate of precious metals is equally set in stone with only the when and how of Cartel failure remaining to be determined. Thus, the next two weeks are of paramount importance in the “gold wars”; as not only is the potentially apocalyptic Swiss gold referendum scheduled for November 30th, but the much ballyhooed December COMEX contract expiration November 24th – amidst record silver open interest and unprecedented backwardation.
For the third time in a week, the Cartel were hell bent on enforcing their time honored “Cartel rule #2” – i.e., “all great PM days must be followed by horrible ones.” This following Friday’s “shocking” surge whilst the “yesses” strengthened their leadership in the Swiss referendum polls, and a slew of PM-bullish news that since expanded dramatically – starting with this weekend’s “G-20” boondoggle in Australia. The best the world’s “leaders” could come up with was an ambiguous “promise” to grow the global economy by a measly 2% with not even a hint of a viable plan to do so. Not that anything short of hyperinflation can accomplish such a feat anyway, certainly not on a real basis. However, the real story in Brisbane was not petty economic propaganda, but relentless attacks on Vladimir Putin, who arrived with four warships in tow, and left early on account of being “tired.” Yes, tired of being vilified by the very people responsible for the second Cold War – and by all means, well prepared to “knock things down, and drag them out.”
Thus, the Cartel already had their work cut out for them. Irrespective, they executed their 74th “Sunday Night Sentiment” paper raid of the past 75 weeks, which was reversed entirely when first, China reported its largest bad loan surge in a decade; and second, Japan supplied one of the most horrifying “misses” on record, as 3Q GDP plunged 1.6%, compared to expectations of a 2.2% increase. And thus, following the second quarter’s 7.1% GDP collapse, Japan is officially back in recession – which is clearly why “Abenomics II” was announced two weeks ago.
No matter, the Cartel simply executed its eighth 12:30 AM EST paper raid in the past eleven trading days, when the plunging Japanese market was closed for its lunch break; followed by their 332nd “2:15 AM” EST raid in the past 375 days, and additional attacks at the 8:20 AM COMEX open and 10:00 AM close of the global physical markets. And this is following an utter catastrophe of a U.S. industrial production report, which unexpectedly declined – following the last two weeks’ “trifecta” of declining factory orders, durable goods orders and construction spending. But don’t worry, the “new hail mary” algo showed up as usual, to lift the benchmark 10-year yield from the Fed’s “line in the sand” at 2.30%, whilst the PPT executed its 17th “dead ringer” algo in a row on the “Dow Jones Propaganda Average” at exactly the 10:00 AM time when open market operations were supposed to be no more, care of the supposed “end of QE.”
And oh yeah, I neglected to mention the most PM-bullish news of all – which frankly, I’m still reeling from, given how unexpected and potentially CARTEL SHATTERING it was. Yes, just after Draghi gave yet another speech discussing the weakness of the Euro economy, reiterating his willingness to do “whatever it takes” to save it, ECB board member Yves Mersch delivered what may one day be remembered as the “shot heard round the financial world,” in saying
Theoretically, the ECB could purchase other assets such as gold, shares, and ETFs to fulfill its promise of adopting further unconventional measures to counter a longer period of low inflation.
–ETF Daily News, November 17, 2014
For once, even I am speechless! The ECB has been as mortal an enemy of gold as the Fed – in attempting to illegitimize it, in favor of the sacrosanct fiat currency underlying its power base. To wit, such a statement not only legitimizes gold’s monetary value in spades, but directly affronts supposed “allies” like the Fed and Bank of England; not to mention, the Swiss National Bank at its moment of greatest need. In our view, there is no other way to analyze such a dangerous, calculated statement than to assume significant “splintering” of TPTB’s views, particularly against the “all-powerful” Federal Reserve as the global money printing group rockets into uncharted realms.
Speaking of the beleaguered SNB, which could be two weeks from its demise as a relevant entity, we felt the need to “step up the pressure” as the potentially historic referendum approaches. My past two articles were Friday’s “call to the Swiss” – in which we pled with the Swiss to save their country by re-linking the Franc to gold; and Monday’s “most prescient statement ever made” of Ferdinand Lips’ 2005 comment that “if the SNB does not stop its gold sales, Switzerland will have to buy it back one day – but at a higher price.” Today, we focus on how the SNB’s villainous Chairman, Thomas Jordan, “doth protest too much” to the referendum, in his goal of not only maintaining power but delaying the inevitable realization of his policy failures.
In many ways, the MSM’s incessant “assumption” of a no vote mirrors their equally callous, description of the pre-election Catalonian polls. Despite last year’s polls, on average, depicting 55% support for secession, compared to just 20% against and 25% undecided, nearly all MSM articles suggested a Catalonian “no” vote was likely – in contrast to the actual result of 81% yes, 4% no, 15% undecided. Which is exactly how they are writing of the Swiss gold referendum, despite initial polls putting the “yesses” strongly ahead, and Friday’s Deutsche Bank report that the yesses had a “narrow but clear lead.” You know, the same type of pro-establishment propaganda that gave credence to this weekend’s toothless, baseless, G-20 “growth” communique.
As for Jordan, it’s quite amazing just how vigilantly he is publicly fighting the gold referendum, despite Swiss law proclaiming it illegal to do so. In other words, Swiss bankers have as little regard for the law as their compatriots throughout the Western world – which we assure you, will not be lost on the Swiss people, who fiercely support the independence their direct democracy process engenders.
On September 6th, 2011, Jordan was an SNB board member when its infamous peg with the Euro was instituted at 4:00 AM EST, just as the U.S. Labor Day weekend was concluding. “Coincidentally,” gold was trashed instantaneously from its all-time high level of $1,920/oz., in what I long ago deemed “Operation PM Annihilation I.” Not a few people – such as our good friend Turd Ferguson – believe the Swiss were directly involved in this raid, coincident with one of the most PM-bullish events of our lifetime. And thus, we wouldn’t be a bit surprised if the SNB’s supposed 1,040 tonne gold holding is no more real than the U.S. Treasury’s 8,134 tonnes.
In recent weeks, Jordan has been campaigning against the initiative, as if for his life, despite the aforementioned law prohibiting it. And in doing so, has made some defenses imaginable – starting with the comical hyperbole that a “yes” vote would represent a “fatal error of judgment.”
This is from a man presiding over a tripling of the SNB’s balance sheet since 2008 – mostly since the Euro peg was announced; to an astonishing 80% of GDP, compared to “just” 25% for the Federal Reserve. In the process, the “Euro Franc” has plunged 16%, yet Switzerland’s average quarterly GDP growth of just 0.4% has been no better than the rest of the continent. And as for the “deflation” its rigged CPI purports over this period, it’s no more fraudulent than in Japan; as before the recent 16% and 20% plunges in the Euro and Yen, respectively, Tokyo and Osaka were ranked the world’s two most expensive cities, whilst Zurich and Geneva were ranked seven and ten.
Comically, Jordan claims gold reserves should not be increased because it would make it more difficult to defend the Euro peg – i.e., the primary source of the nations’ biggest ill, the aforementioned inflation that catalyzed this year’s “Decent Salary Referendum” – which would have raised the Swiss minimum wage to $25/hour, three times that of the United States!
Ominously, he actually depicts the cap as the “main policy tool to defend the SNB’s mandate of price stability,” in perhaps the most paradoxical statement ever made. He also claims gold is not valuable because it is non-interest bearing, despite the fact that Swiss Treasury bill rates are currently negative; whilst 10-year yields are just 0.4%; and he himself promises official negative rates if the economy continues to weaken. Better yet, he claims gold is “one of the most volatile and riskiest investments” as the SNB admits to buying domestic and international small-cap stocks!
Frankly, we could write another two or three pages dissecting Jordan’s anti-gold arguments – as well as those of his equally desperate SNB colleagues ranging from rote propaganda, to undecipherable platitudes and flat out lies. However, we’ll simply end with a comment representative of global Central banking hubris in general – of how “too little gold in the economic crisis was never Switzerland’s problem; but instead, the strong franc, whose massive overvaluation has led to major problems.” Yes, Thomas, nothing is worse for a population than a strong currency, or better than a weak one. Let’s just see how Switzerland does if the “tragedy” of gold re-linking is mandated – and conversely, how many months weeks days it will take the people to fire you for treason, assuming the current “yes” leadership wins the day.