As Popeye used to say, “that’s all I can stands, I can’t stands no more.” As the former “Ranting Andy” – a name, I might add, given to me by Bill Murphy of GATA circa 2009, following countless emails regarding my frustration about mining stocks – I have my limits, too. And fortunately, a wealth of knowledge to back it up – garnered over 13½ years of intensive research.
To wit, when I refer to “long-time” readers, I am not connoting those that started reading when I joined Miles Franklin four years ago, in October 2011. No, I am referring to my “GATA days” – as from roughly 2004 through 2011, my daily commentaries, as always, published for free, were posted on the great GATA website. In my view, the “GATA army” – led by its “All-Pro Team” of manipulation-exposing crusaders – is one of the most positive forces of financial truth the world has known – certainly, in today’s age of epic journalistic irresponsibility. Moreover, its principals, Bill Murphy and Chris Powell, are two of the great economic patriots of the 21st century. To that end, the relationships I built in the decade-plus I have been associated with it – culminating with “Admiral Sprott” citing my work in his keynote speech at GATA’s August 2011 conference in London – have not only formed the backbone of my life’s work, but positioned me to do so at perhaps the world’s most value-added bullion dealer.
Why are my GATA roots inspiring me this morning, you ask? Well, after three days of watching the Cartel fight gold and silver at their respective 200 DMA’s of $1,176/oz and $15.97/oz, respectively, in the most blatant fashion imaginable, I thought it time to “reacquaint” readers, old and new, with the vast base of “manipulation knowledge” I have accumulated, and dutifully reported on, over the past 13½ years.
Frankly, what “put me over the top” was Zero Hedge’s “it’s back to the future, as stock futures jump due to the latest abysmal economic news” article this morning. The Back to the Future reference, of course, relates to Back to the Future II’s 1989 prediction that the Chicago Cubs would win the World Series in 2015. Which, thanks to my beloved New York Mets, now appears very unlikely. As for this morning’s PPT-orchestrated “stock futures surge,” it comes on the heels of the following, massively equity-negative, Precious Metal positive news items from just the past 24 hours alone.
1. Japanese September imports collapsed by 11%, compared to a 3% plunge in August, pushing its rapidly expanding trade deficit deeper into historic territory. Which, I might add, was a surplus until Abenomics was initiated 2½ years ago – validating the abysmal failure Abenomics has been, in more than doubling the Japanese money supply since. And yet, Japanese stocks surged on the news, on “hopes of an expansion of Abenomics.” Gee, I wonder why.
2. Third quarter North American railcar orders had their largest decline in at least the 27 years since such data has been compiled, plunging an astonishing 83% from a year ago.
3. A major Chinese state-owned “steel trading” firm is set to default on its bonds, despite government intervention – as the global “Glencore bankruptcy parade” gains momentum.
4. Yet another massive, “unexpected” API crude oil inventory build has WTI crude oil on the verge of plunging below $45/bbl. Commodities, across the board, are declining anew – with the two most vital to Glencore’s solvency, zinc and copper, leading the charge; yet again defying the hopes and dreams of TPTB’s commodity manipulation operatives.
5. News that the hideous September NFP jobs report – in which just 142,000 “jobs” were created, and July and August’s “gains” revised dramatically lower – were actually massively overstated. As, per the BLS’ publication of individual states’ labor market data, cumulative job “gains” were actually a negative 22,000.
6. Growing rumors that this Thursday’s ECB meeting will be used to yet again lay the groundwork for an expansion of its historic, open-ended, massively failing QE program.
7. News that a major U.S. pension fund, the Central States Pension Fund, needs to dramatically cut the benefits – by more than 50% – of more than 273,000 retirees to stay solvent. Which, no doubt, is part of a soon-to-explode trend of pension fund failures, catalyzed by seven years of ZIRP and QE monetary policies.
8. Last but not least, S&P 500 earnings expectations have now declined for 15 straight days, in what is easily the ugliest earnings reporting season since 2009’s financial crisis. And nothing made me personally happier more than watching the stock of the company that represents the current, Fed-orchestrated equity bubble more than any, Tesla, plunge. To wit, my commentary from February 2015.
“The combined impact of the aforementioned events don’t hold a candle to the “crazy” comment of Tesla CEO Elon Musk, in claiming Tesla’s market cap could reach Apple’s record high level of $700 billion within just ten years. Frankly, even I’m speechless at this idiocy; as not only is Tesla’s product far behind the practical capability of your everyday Chevy; but with gasoline prices plunging, no one will even consider buying hybrid cars for the foreseeable future. Let alone, the fact that without a massive, multi-billion dollar network of recharging stations, Tesla’s have as much use as a plane without jet fuel. And trust me, I know as much as anyone about the issues with hybrid cars, having worked for nearly three years as head of Investor Relations for a mining company attempting to develop a massive Cobalt deposit in Cameroon, Africa (cobalt being a primary component of the lithium-ion batteries used in hybrid cars). No Elon, Tesla is not going to be the next Apple; and despite your technical brilliance, it won’t be long before the bloom is entirely off the ill-fated hybrid rose.”
9. Throw in the residual, horrific ramifications of this weekend’s ugly Chinese GDP number; and Monday’s “terrible debt ceiling accident” comments from Treasury Secretary Jack Lew, with the U.S. government mere weeks from running out of money, and you can see how comical the government’s efforts to suppress Precious Metals, and boost stocks, has become. Particularly, their desperation to turn gold and silver “black box” traders from sellers to buyers by defending their respective 200 DMA’s “to the death.”
That said, it wasn’t until this article was published this morning by – who else, but GATA – that I was inspired to write this article. As in it, yet another Central banker admission of gold manipulation was exposed, when Austrian Central bank Executive Director Peter Mooslechner volunteered the following “smoking gun” in a video-taped interview, when asked of the role he thinks Central bank gold reserves should play.
“I think for small countries, it’s more or less a buffer role in the end. It’s quite different, I think, for central banks in Asia, for example, where they are increasing their reserves a lot and are much more active in using their reserves in trading in the market and intervening into the market.”
Of course, this should be no surprise to anyone following reality, per what shows up in page 31 of the Austrian Central bank’s 2003 annual report.
“Foreign currency reserve assets and gold are held primarily to support intervention in the foreign exchange market”:
Which I might add, is not only an official policy of the Austrian Central Bank, but the Bank of International Settlements itself (i.e., the “Central banks’ Central banker) – per this comment from BIS Chief Economist William White in 2006, regarding the “intermediate objectives of central bank cooperation”…
“And last, the provision of international credits and joint efforts to influence asset prices (especially gold and foreign exchange) in circumstances where this might be thought useful.”
Of which, December 2011’s “Operation PM Annihilation II” was clearly one such “useful circumstance” – when, following a surprise ECB rate cut, the following headline appeared on Germany’s largest media service, just as gold was breaking above the “key round number” of $1,750/oz. Which, I might add, was deleted hours later (after the price had been successfully smashed), with not a word of explanation as to why.
And oh yeah, the Bank of England, per this damning quote from BOE governor Eddie George in 1999, following gold’s post “Washington Agreement” surge, and subsequent plunge.
“We looked into the abyss if the gold price rose further. A further rise would have taken down one or several trading houses, which might have taken down all the rest in their wake. Therefore at any price, at any cost, the central banks had to quell the gold price, manage it. It was very difficult to get the gold price under control but we have now succeeded. The US Fed was very active in getting the gold price down. So was the UK.”
As well as the United States, per not only this 1998 from Fed Chairman Alan Greenspan in 1998 – before the House Banking Committee, no less…
“Central banks stand ready to lease gold in increasing quantities should the price rise.”
…but the mission statement of the little known, but official U.S. government agency, the 1934-established “Exchange Stabilization Fund.”
“The Gold Reserve Act of 1934 act authorized the ESF to use its capital to deal in gold and foreign exchange to stabilize the exchange value of the dollar. The ESF as originally designed was part of the executive branch not subject to legislative oversight.”
Heck, even gold miners have been involved, such as Barrick Gold – i.e., “evil personified” – which, in 2003, admitted in court that it manipulated gold prices as an “agent of the government,” in the famous “Blanchard Case” that was subsequently settled out of court. And by the way, their co-defendant in the lawsuit was none other than “Barrick’s bullion bank”…drum roll please…JP Morgan.
Frankly, I could fill another ten pages with such damning quotes – but thankfully, I have my daily space allotment. That said, you can read of all the aforementioned – and many more – in this fantastic synopsis in GATA’s archives. Plus, the 355 pages of “precious metal manipulation primers” I penned between May and November 2011 – which can be found in the five “Ranting Andy Specials”.
As I noted yesterday, the reason the Miles Franklin Blog – and GATA – are so devoted to exposing this vital, but largely ignored economic TRUTH is to empower you to make correct long-term investment decisions. In our view, the manipulation of Precious Metals is a principal tool of the TPTB’s strategy of averting the wrath of “Economic Mother Nature.” Unfortunately for them, fifteen years of gold and silver suppression has created the “worst global economy of our lifetimes”; the largest worldwide debt edifice in history; collapsing currencies; unprecedented wealth disparity; historic commodity oversupply; and oh yeah, a massive Precious Metal supply deficit, which will only worsen as the world’s scant inventories are run through; as production declines into the foreseeable future; amidst rapidly rising, historically high demand. In other words, the “end game” of fiat currency collapse is as inevitable as day following night; as is the collapse of today’s “New York Gold Pool” – and all “powers that be” attempts to prevent the “realization of reality” via market manipulation.