It’s All Going Wrong For A Gold Cartel On The Precipice

by Andy Hoffman, Miles Franklin:

I wasn’t planning to write another article this week – as tomorrow morning (Friday), I’m taping a MUST LISTEN interview with one of the smartest investors in the Precious Metals/Cryptocurrency space; Edward Blake, the Renegade Investor.  Not to mention, it’s the middle of August, and I have yet to take a day off from publishing all year.  However, as we are living through what may well be a major inflection point in history – monetary and otherwise – I figured I’d pen a few thoughts.  What the heck?  Diana and Sylvie are visiting relatives in New York, so who’s going to stop me?

Anyhow, the trading day just concluded – with the “market” finally allowed to have a real down day.  But don’t worry, the “Dow Jones Propaganda Average” was down just 0.93%, whilst gold’s gains were capped by the equally time-honored “1% rule” for the second straight day.  I mean, how could stocks possibly go down more than 1%; or gold up more than 1%; when we’re on the cusp of nuclear war – causing bond yields, oil prices, and the dollar to plunge, amidst unprecedentedly manipulated markets yielding “dotcom valuations in a Great Depression Era,” and the “lowest inflation-adjusted gold and silver prices in modern times?”

Boilerplate manipulation commentary notwithstanding, it’s not where we are now that matters, but where we are going – likely, much sooner than most can imagine.  Which is, a time when – at least, in real terms – these “roles” will be reversed, as capital floods out of historically overvalued financial assets into “scarcity assets” like Precious Metals and Bitcoin; i.e., the “twin destroyers of the fiat regime.”  As in my view, the “ultimate monetary death cross” – when the majority of the world’s population realizes crypto is destined to replace fiat currency – is coming soon.  And when it does, no adjectives have yet been created to describe the mad rush of tens of trillions of fiat toilet paper into the handful of tiny scarcity asset markets.  Even Ray Dalio says “buy gold before it’s too late” – as I assure you, someday soon, it will be.

Care of said “monetary death cross,” I have recently updated my longstanding view that the gold Cartel will be overwhelmed by physical demand when “the Big One” finally hits.  This is still a viable possibility, of course – particularly if a crisis is triggered by a shocking political, economic, or military event; such as, a U.S. invasion of North Korea, particularly if Kim Jung-Un’s “response” is what I think it will be.  That said, I now believe the more likely scenario is one where the Cartel voluntarily disbands, not that they would ever admit it.  The reason being, that when the crypto-currency revolution sweeps across the globe, “they” will realize there’s no point trying to hold PM prices down anymore – particularly because so little “manipulation ammunition” remains after two decades of relentless suppression, amidst an environment of surging global demand.  Thus, when PMs rise to five, ten, or even 20x their current levels, no one will care except the handful of investors wise enough to have bought them at today’s bargain basement prices.  And the best part is, governments will be so busy flailing at the “windmills” known as decentralized crypto-currencies, they won’t bother to vilify PM investors; let alone, enact windfall taxes or attempt to restrict your ownership.  In other words, the best-case scenario for a group of die-hard investors, who deserve good fortune more than any others.

I couldn’t have been blunter about how near I believe that time is, in taking the bold step to pen the “most Precious Metal bullish I’ve ever been” two weeks ago.  And per today’s title, it couldn’t be clearer that the winds of change are blowing our way.  Yes, the potential war with North Korea overshadows all else, but man are things going the wrong way for the Cartel, on all fronts.

From plummeting bond yields, oil prices, and the dollar (wow, has “Trump-flation” died); to rising market volatility; plunging “inflation” data – yielding an increased imminence of QE4; historically ugly demographics; the expanding “retail Apocalypse”; the upcoming “debt ceiling” bloodbath; parabolically rising debt – of all kinds; Bitcoin’s SegWit activation; escalating military tensions between China and India; and what’s this, for the first time in three years, positive gold money flow; the odds of the long-awaited “commercial signal failure” haven’t been this high since the height of the 2008 Financial Crisis.  Only this time around, “history’s most overdue crisis” will not only be far worse, but irreversible – as now that Central banks’ ammunition and credibility have been destroyed, their only remaining “tool” will be the blatant, massive hyperinflation that will buy them but a few months at most; before first, the weakest currencies collapse; and ultimately, the world’s “reserve currency” as well.

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