by Andy Hoffman, Miles Franklin: The gold Cartel will eventually collapse – just like all Cartels before it, like the London Gold Pool in 1968, before gold surged from $35/oz to nearly $900/oz a decade later. However, in the meantime, we must continue to fight a monetary battle to the death – which mathematically, must be won by sound money; as, per the immortal theme of Gresham’s Law, good money always chases out bad. Not to mention, Economics 101; as, per last week’s “Precious Metals’ ultimate downside protection,” the mining industry has been so decimated by two decades of price suppression, supply is guaranteed to plunge indefinitely. This, as the terminal, malignant phase of history’s largest, most destructive fiat Ponzi scheme causes global Central bank printing presses to be turned up to “ludicrous speed” (Spaceballs reference).
Thus, on one of the year’s thinnest trading days – the day before July 4th, when trading desks are manned by skeleton crews – what were the odds we wouldn’t see the 191st “Sunday Night Sentiment” attack of the past 201 weekends, and 866th “2:15 AM” raid of the past 988 trading days? This, on a day teeming with the PiMBEEB headlines I’ll discuss shortly; whilst other commodity prices are flat to higher; interest rates are barely changed; and the only reason the dollar is modestly above its post-election low, is the historic, unexpected, landslide defeat Shinzo Abe’s Liberal Democratic Party suffered in yesterday’s Tokyo regional elections, causing the Yen to significantly decline.
To that end, to put the blatancy of the U.S. government-led Precious Metal manipulation into perspective, 201 weekends and 866 trading days represents nearly four years of time. In this case going all the way back to the spring of 2013, right after Obama’s infamous “closed door meeting” with the top “too big to fail” bank CEOs preceded, by one day, the vicious “alternative currency destruction” attack; clearly, utilized to push PMs below their respective 200-week moving averages, and launch a now four-year propaganda campaign regarding the Fed “tightening” that has yet to occur.
During this period, believe it or not, gold is up $80/oz; and silver, $1/oz. In other words, we’re to believe that during a four-year period when Precious Metals rose 7%; not to mention, as global money printing went parabolic; countless fiat currencies crashed; and “tightening” and all, the Fed still has a 1% interest rate and a $4.5 trillion balance sheet; that a “freely-traded market” produced PM declines on 95% of all weekends, and 88% of all London paper pre-market openings? Frankly, even “sixth sigma” doesn’t properly describe such blatancy – in suppressing what the fiat-currency-loving “powers that be” fear more than anything; like fire to the Scarecrow, and Kryptonite to Superman.
To that point, it’s quite funny – and interesting – that Superman’s menace was “Krypto”-nite; given that, in my very strong view, “Crypto” currencies will ultimately be the powers that be’s’ principal monetary nemesis; and, per December’s “why Bitcoin will make gold and silver go up,” Precious Metals’ most powerful ally. Thus, when I saw this weekend’s extremely interesting news that Delaware – by far, the state with the most incorporated companies – is about to enact a law legalizing stock trading on blockchains, my spider senses started tinging. As clearly, when this commences, it will dramatically decentralize financial markets; to the point that exchanges – from the NYSE to the COMEX (which FYI, is incorporated in Delaware) – will be replaced by the inexorably advancing tsunami of financial technology. Which, by the way, is exactly what is occurring in the crypto-currency “ICO,” or Initial Coin Offering, market. As I wrote in May, “decentralization is the future of monetary value” – and when it comes to crypto-currency and Precious Metals, nothing better defines decentralized. As opposed to fiat currency, which could not be more centralized, and destructive, if it tried.
As for this weekend’s PiMBEEB onslaught, much of it is directly related to today’s principal theme – of the borrowed time the U.S. dollar is living on as “world’s reserve currency,” given that it has more debt than most other nations combined; a long-dead manufacturing sector; a reckless Central bank that has destroyed countless nations via the unprecedented exportation of inflation; and a rapidly deteriorating diplomatic reputation, which the historically undiplomatic Trump Administration has dramatically worsened via its aggressively “America First” geopolitical and trade policies. Not to mention, a President whose unfiltered “Tweeting” has offended many of the world’s most important leaders and nations.
To start, we have the States of Illinois, Connecticut, New Jersey, and Maine all failing to pass fiscal 2018 budgets – to the point that “emergency measures” have either been, or shortly will be, instituted, to keep them afloat. In other words, America’s growing bankruptcy epidemic, at all levels, is being exposed – to the point that actual bankruptcy proceedings, Puerto Rican style, are likely. In all cases, criminal governments – like New Jersey’s, whose hideous fiscal collapse in large part occurred under the stewardship of none other than Jon Corzine – are desperately attempting, like the Federal government in advance of its “debt ceiling” limit this Fall, to enact near-term patches, to, as always, “kick the can” those last few inches.
However, in some cases, like Illinois, the situation is so bad, a bankruptcy filing appears imminent. To the point that, at the last possible second, the Illinois Congress is trying to pass yet another massive tax increase to “pay” for its out-of-control spending – in a State that has already experienced, by far, the biggest exodus from its borders since Louisiana post-Katrina. But don’t worry, buy stocks and sell gold – as this couldn’t possibly cause any problems; particularly when the only way to “fund” Illinois’ bills – like the tens of billions of its pension funds that will go broke otherwise – is the issuance of more Federal “money,” followed by its “monetization” by the Fed.