“we are not at war with ISIS or Russia, but the ECB.” Beppe Grillo
In doing so, I must start with the ramblings of St. Louis Fed President James Bullard, who yesterday reversed his stance on delaying QE, following the past month’s historic PPT market goosing – in doing so, telling us all we need to know of the Fed’s true mandate. That is the explanation of his change of heart is what makes this “foolishness moment” so poignant – in citing “higher inflation expectations” over the past month.
Higher inflation expectations? Really?
Is he referring to the fact that since the “Dow Jones Propaganda Average” bottomed on October 15th – at essentially the second he said a “logical juncture at this point is to delay the end of QE” – the price of oil has collapsed from $81 to $74, whilst gold has plunged from $1,250 to $1,140; silver from $17.50 to $15.00; and the CRB commodity index from 274 to 266, whilst the “dollar index” surged from 84.5 to 88.0? Equity “rally” and all, the benchmark 10-year Treasury yield of 2.32% is essentially at a 17-month low – excluding the October 15th “liquidity vacuum”; whilst the broad Treasury market price structure suggests inflation expectations have materially declined. Better yet, despite the rigged “consumer confidence” index having risen to a seven-year high yesterday – to a level last seen at the peak of the 2007 bubble, despite collapsing retail sales; “inflation expectations” were reported to have hit a 12-year low. Again, we cannot emphasize enough that the Fed could not care less about the economy, as its sole mandate has become the support of the equity markets that the “1%” dominate – replete with relentless propaganda justifying such “strength.”
Meanwhile, amidst Bullard’s “higher inflation expectations” hallucinations, the Eurozone reported a whopping 0.2% increase in third quarter GDP – in yet another blatant example of book cooking to report the technical avoidance of “recession.” The MSM actually crowed about the “bullishness” of the unexpected increase from 0.1% in the second quarter – but from the other side of its mouth claimed “Eurozone GDP and inflation show why Quantitative Easing is becoming more certain.” In other words, Bullard’s “increased inflation expectations” were nowhere to be seen in Europe – which reported a miniscule 0.4% annualized CPI increase in October, near multi-decade lows.
Actually, my “favorite” post Euro GDP propaganda pieces were Bloomberg’s “German-French rebound helps keep Euro-Area expanding” and CNBC’s claim that “investors breathed a sigh of relief” based on such data, highlighting fictional strength in of all places, Greece! Regarding Germany, its GDP expanded by just 0.2% (according to its fudged numbers), whilst France “surged” 0.3%, as its credit rating was downgraded, no less. And as for Greece, perhaps its GDP did in fact rise by a measly 0.7% following a cumulative 23% plunge over the past six years. However, given its near record 26% unemployment rate; imminent sovereign default (yielding surging bond yields and plunging equities); and oh yeah, riots in Athens whilst such “bullish” data was published, we’ll take the “under” on 0.7%.
That said, as noted above, I rapidly changed today’s focus after watching the morning’s dramatic reversal of the precious metals market supposedly due to a Deutschebank report that contrary to recent SNB-led propaganda, the “yesses” have a “narrow but clear lead” of 44% to 39%; and moreover, “there are reasons to believe factors could be favorable for the amendment.” We certainly agree that a “yes” vote is wildly bullish for precious metals – which frankly, could permanently destroy the gold Cartel. However, the fact that the reversal occurred at exactly 10:00 AM EST – i.e., “key attack time #1,” on a Friday, no less – with this momentous vote just two weeks away, has us believing far bigger “forces” were at play.
Last night, we were treated to yet another vicious paper raid at 12:30 AM EST – the seventh in the past 10 days, right amidst the Japanese lunch break. And for the fifth time since the U.S. Mint suspended Silver Eagle sales due to an historic demand surge, silver prices were utterly attacked, whilst no other markets materially budged. And this, as gold and silver backwardation increased further to its highest level since 2001!
Thus, when prices turned on a dime at exactly 10:00 AM EST, we clearly were intrigued; ultimately, taking silver up more than 4% – and more importantly, gold above the $1,183 “triple bottom” level of the past two years. The 10-year Treasury yield plunged to nearly 2.3%; and of course, the Dow was not allowed to materially decline. However, the day’s big story was gold and silver’s surge “out of the blue” – which Zero Hedge attributed to a “dollar dump.” Really? The dollar index’s 0.1% decline from 87.67 to 87.53 is considered a “dump?” Let alone, with the Yen collapsing to a new seven-year low of 116.3/dollar?
In other words, while we do not know exactly what happened at 10:00 AM EST, we are quite sure it was not rote algorithm trading. Perhaps it was the Deutschebank “news”; or perhaps, an overwhelming realization that the “chasm of destruction” we wrote of last week – between rigged PM markets and the reality of surging demand and plunging production – had simply become too wide. However, in our minds, the global physical demand surge – which yesterday, was powerful enough to overcome equally powerful paper suppression is focused as much on escalation of the aforementioned “gold wars” as anything else. And no, we’re not just speaking of Switzerland – but China, Russia and the rapidly growing anti-dollar bloc. Switzerland may indeed prove the flashpoint, but the entire world is on the verge of financial mutiny – as exemplified by yesterday’s comments from the leader of Italy’s “Five Star” movement, Beppe Grillo in claiming “we are not at war with ISIS or Russia, but the ECB.”
War indeed – a word that is creeping into the world’s collective financial consciousness as exemplified by one of our most relevant articles to date, the “final currency war” we discussed two years ago. And what better place to segue to our primary topic as the “most prescient statement ever made” may well have emanated from Ferdinand Lips, the late Swiss banker and ardent GATA supporter, who in 2002 wrote “Gold Wars: the Battle against Sound Money, as seen from a Swiss Perspective.”
Yesterday, I read this MUST READ article of the history of Switzerland’s de facto gold standard, including the evil machinations of SNB bankers to circumvent it. In it, we learn that in 2002, Ferdinand Lips asked…
Is the SNB on New York’s leash?”, saying that In my opinion, the once strong, proud and independent SNB has been degraded to an ‘Off-shore Branch’ of the U.S. central bank (the Federal Reserve) and reports directly to Alan Greenspan and his cohorts in New York.Next, he validates what we have been writing of for years; in my case, coinciding exactly with my entry to precious metal investments and commentary in 2002…
--Zero Hedge, November 14, 2014
It is a given that the Swiss gold sales will help New York money center banks to survive a bit longer. It will help them manipulate the gold market.And last but not least, the “most prescient statement ever made” – again, from the days of yore of 2002…
–Zero Hedge, November 14, 2014
But, gold’s time is still to come. If the SNB does not stop its sales, Switzerland will have to buy back its gold one day but at a higher price.And one more comment, as the Miles Franklin Blog joins the burgeoning global movement to defeat the spawn of evil that are Central bankers on November 30th. Apparently, the SNB’s deputy governor at the turn of the century, when the Franc’s gold de-linking coup was executed – Jean-Pierre Roth – inadvertently made comments that could prove the “straw that broke the camel’s back” for indecisive Swiss voters. Back then, when the Franc was 40% backed by gold, he argued that a 20% backing was more appropriate, as “20% makes a great deal of sense from a diversification point of view, and meets our constitutional obligation to maintain gold reserves.”
-Zero Hedge, November 14, 2014
Well Jean-Pierre, now that the Franc’s gold backing has been reduced to a measly 7%, following the dishoarding of 1,500 tonnes at roughly $350/oz.; and the Franc is down 16% in the three years since the Franc was pegged to the Euro; do you still believe 20% gold backing is a good idea? I know you have benefitted greatly from unprecedented currency debasement, given you sit on the boards of some of Switzerland’s largest public corporations, serve as a governor of the IMF, and Chairman of the Bank of International Settlements (is this guy evil, or what!). However, the vast majority have not, which is why Switzerland nearly passed a $25/hour minimum wage referendum earlier this year, care of the massive inflation unleashed due to your policies.
To conclude, no more than 1% of the world realizes the importance of November 30th today. However, don’t be surprised if “the 99%” are well aware shortly thereafter; which is why NOW is the time to protect your assets with precious metals.
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