I’ve spent 14 years studying, observing, and analyzing the manipulation of financial markets – particularly, Precious Metals, given how much I have invested, both personally and professionally. In fact, the reason I’m here today, at of the world’s best Precious Metal blogs, is my long-time association with GATA – culminating with Eric Sprott himself personally thanking me for my efforts, during his keynote speech at GATA’s 2011 London Conference.
As a career financial analyst, my “way” is to start quantitatively, and move on to qualitative conclusions. And in 14 years, perhaps no one has taken my level of Precious Metals quantitative analysis to such extremes. Which, when combined with hundreds, if not thousands of hours of qualitative analysis, has yielded my conclusion that not only are Precious Metals manipulated – and, for that matter, essentially all financial “markets” – but more so than ever. To the point that, in my view, essentially all the world’s “smart money” knows – whilst a large, rapidly expanding portion of the “dumb money” suspects it as well. Let alone, economic statistics, and essentially everything published by the government.
Armed with this knowledge, I have spread TRUTH for more than a decade. Which, in light of the rapidly unfolding collapse of the global economy; and associated explosion of Wall Street, Washington, and Mainstream Media propaganda – in a blatant, hopeless attempt to hide said truth; has become a more valuable “commodity” than at any time in financial history. In penning the Miles Franklin Blog, I use every “tool” available to get my point across – of the need to PROTECT oneself from what’s coming; and no tool makes the point better, in my view, than highlighting the mirage “markets” have become. Particularly when PPT and Fed-supported equity and fixed income indices have absolutely ZERO positive impact on economic activity; whilst Cartel-capped Precious Metals have decidedly NOT prevented the collapse of hundreds of currencies, nor the erosion of confidence in Central banks’ ability to “manage” economies.
That said, it’s rare for me to spend an entire article dedicated to the topic of market manipulation. But heck, it’s never been more salient to discuss, nor more egregious. And if you don’t like it, I’ll be writing another 200 articles this year alone. As for the reason I’m writing of it today, even I have been awed by the last week’s concerted, but largely failed efforts to “stabilize” markets – particularly in China, where the Yuan devaluation’s botching has catalyzed a global wave of currency, commodity, and equity carnage. And of course, the U.S., where the PPT, Fed, Exchange Stabilization Fund, and Gold Cartel are “headquartered.”
To that end, consider that eleven months ago, I penned “last to go” – to describe how, relentless, unprecedented market manipulation notwithstanding, the “powers that be” had lost control of essentially everything. Except, as I deemed them, “last to go” markets like the “Dow Jones Propaganda Average” and paper gold and silver. In other words, aside from the most widely watched, heavily manipulated indices, global commodities; currencies; and in most cases, equities; were awash in red ink. And yet, that was the “good old days” compared to today – as since then, WTI crude has fallen another 32%; the Baltic Dry Index another 31% – to an all-time low; and the CRB Commodity Index 25% – to a 40-year low; whilst the average global stock is in bear market territory, down at least 20% from its highs.
Economically speaking, essentially all nations are in recessions; and monetarily, the average currency is at or near its all-time low – from “BRICS” nations like Brazil, Russia, India, and South Africa; to “first world” commodity-dependent nations like Canada, Australia, and Mexico. And don’t forget currencies issued by the “world’s smartest people” – at, for instance, the Bank of England, the ECB, and the Bank of Japan; whom cumulatively, for all their money printing, have accomplished NOTHING but exploding debt, plummeting currencies, and burgeoning political and/or social unrest. And…BREAKING NEWS, as I edit! The Nigerian Naira – used by 174 million people, in Africa’s most populous nation – saw its “offshore,” or black market exchange rate plunge this morning, to a record high 25% discount to the official, or “onshore” rate. In other words, exactly what is occurring in China; prompting exactly the same, sure-to-fail government response – of economy and currency-destroying capital controls.
To that end, the past few days was a perfect microcosm of said desperation – as exemplified by the maniacal, suicidal actions of the PBOC, in response to a collapsing “offshore Yuan” market; imploding equities; and generally speaking, expanding fear that the Chinese bubble is not only out of control, but that it’s supposedly “brilliant” Central planners are as clueless as to what’s going on, as they are helpless to prevent it. Which, by the way, is what I have been shouting at the top of my lungs for years on end.
Anyhow, in just the past 72 hours, we have witnessed an incredible litany of unconscionably horrible news flow, politically, economically and socially. I listed the weekend’s news in yesterday’s article; and yesterday’s news was worse, starting with another 6% plunge in Chinese stocks on Monday (followed by an unchanged result last night); and a nearly 3% plunge in the CRB Index, to a new 40-year low – led by crude oil, down a whopping 6%, and sitting on the doorstep of a “30-handle.” And oh yeah, per this incredible chart, NOT A SINGLE CARGO SHIP IS OPERATING IN THE ATLANTIC OCEAN, for those not yet convinced how dramatically global trade has collapsed.
Moreover, to say financial markets are “turmoiling,” as Zero Hedge terms it, is the understatement of the century; as futures markets now expect such cataclysmic events as the Saudi Riyal being de-pegged from the dollar – after 30 years; and Glencore going bankrupt – as its “associated company” Sherwin Alumina did yesterday. In fact, one of America’s largest coal companies, Arch Coal, filed for bankruptcy yesterday, with $4.5 billion of debt of likely-to-be-defaulted debt. Worse yet, Freeport McMoran, the world’s second largest copper producer, saw its stock plunge 20%, to a new 17-year low, as it too teeters on the brink of bankruptcy – with $20 billion of debt. Heck, just six months ago, FCX was America’s largest miner, by both revenues and market cap.
And trust me, the pain is just starting; but particularly for commodities producers, as exemplified by yesterday’s historic implosion of “commodity currencies” – such as the South African Rand, which fell 5% yesterday alone, to a new all-time low! I mean, billions of people live in these countries, watching their life’s savings serially destroyed by (rapidly expanding) Central bank-induced inflation – whilst “reserve-currency” issuers like the Fed, ECB, BOJ, BOE, and SNB have the gall to cite “deflation” is their biggest fear. Absolutely, if you’re an over leveraged commodity producer – but decidedly NOT if you are one of billions trying to buy foreign goods with rapidly collapsing currencies.
In that context, I’m simply going to show you two charts – of many I could choose from – of how desperate said “powers that be” have become, in attempting to “kick the can” a few more feet, via unprecedented manipulation of said “last to go markets.” First, the “Dow Jones Propaganda Average”; which, on a day when everything else the world round plunged – from equities; to bonds, commodities, currencies, and economic data – was simply NOT ALLOWED to decline. Notice the seven “DLITR,” or “don’t let it turn red” supports at Friday’s close of 16,350, before it final succumbed to turning red around 1:00 PM. Followed by an immediate “hail mary” rally to push it back to unchanged; which, when that too, failed (as oil plunged to the day’s lows), the PPT orchestrated a second, far more egregious “hail mary” – in which the Dow surged 200 points in less than 30 minutes, for no reason other than blatant PPT buying.
And as for Precious Metals, what part of the 129th “Sunday Night Sentiment” raid of the past 134 weekends; the 581st and 582nd “2:15 AM” attacks of the past 663 trading days; the twin COMEX-opening raids; and the 17 “waterfall declines” in a two-day trading period – in which prices were essentially unchanged, amidst wildly-bullish Precious Metal news flow – is not obvious to anyone but the most closed-minded or establishment apologetic?
As for said wildly bullish PM news; aside from everything above, we learned that the U.S. Mint’s start to 2016 was as blisteringly strong as 2015’s end. Meanwhile, on the supply side, Coeur Mining’s 2016 production outlook – the first of dozens to be reported in the coming weeks – anticipates silver production to be flat at best, and down 8% at worst. In other words, a validation that physical PM markets will only get tighter in 2016, amidst the most bullish fundamentals in generations. Or frankly, ever, if one accounts for the historic price suppression.
To that end, I’ll simply conclude by saying that, is stressful as it seems, even “very, very last to go” markets like the Dow and paper Precious Metals, like all the others before it, will eventually succumb to reality – if not nominally, certainly in real terms. Regarding the latter, it’s the rare time when insurance for a calamity guaranteed to occur is so inexpensive. And when considering this “window of opportunity” to PROTECT yourself, consider that in most parts of the world, where currencies are freefalling as we speak, citizens’ ability to procure Precious Metals are somewhere between slim and none.