Andy Hoffman comments on the love hate relationship of gold and failed promises.
Andy Hoffman’s Daily Thoughts
GOLD ALWAYS HAS, AND ALWAYS WILL, WIN
Twas’ the day after Christmas – the warmest in U.S. history, which will only exacerbate an historic energy glut – and not a mainstream “journalist” is stirring, not one single louse.
No mentions of the California gas pipeline leak, 8,000 feet underground, raging like a “volcanic eruption” for two months. Nor that Puerto Rico’s January 1st debt payment, to quote its governor, will be “impossible” to pay. Or that the Fed, “rate hike” and all, just lowered its own estimate of fourth quarter GDP growth to a paltry 1.3%; simultaneous with the Department of Commerce revising lower its May through October new home sales estimates by a 6% – just as it did last year. Let alone, GDP “growth” continues to be “led” by healthcare spending, which “produces” not a thing for America; and defense spending, as America prepares for World War III – be it in Syria, Iraq, or who knows where. To wit, the Zero Hedge article title that says it all; i.e., “core durable goods orders plunge for 10th consecutive month, as defense spending soars most in eight years.”
Given the nation’s exploding deficits – look no further than last week’s historically irresponsible “budget” bill; and what is shaping up to be the worst holiday spending season since 2008; healthcare and defense may well be the only “expanding” sectors in the fourth quarter. Or for that matter, 2016 as a whole. That said, I have to give kudos to the Charlotte Observer, for being the only publication to admit how bad holiday spending has been – in pointing out that a whopping 90% of U.S. retailers are now offering free shipping, to “offset weak holiday sales.”
That one damning factoid aside, I don’t see a single mention of record oil and gas bankruptcies – in a sector responsible for a whopping one-third of S&P 500 capita spending; or the ramifications of distressed debt and “leveraged loan” indices in 2008-style freefall. Or the “coincidence” that just as China – our newest, most dangerous “competitor” in the final currency war – sold more U.S. Treasuries (in November) than any month in history; whilst convincing Zimbabwe to become the first nation to officially adopt the Yuan as its national currency; America slapped a crippling 250% tariff in Chinese steel imports. This, as the crumbling Chinese economy was reported to have a 10% year-over-year decline in “corporate” profits, and a 20% year-over-year increase in debt, from $10.6 trillion to $12.1 trillion!
And given that “journalists” couldn’t possibly understand its ramifications, not a peep was uttered of Switzerland’s upcoming referendum to end fractional reserve banking, likely in the next 12-18 months. To that end, the Swiss National Bank’s credibility is already at an historic low – having pleaded with citizens to vote “no” in last November’s “Save our Swiss Gold” referendum, under the premise that it needed the flexibility to maintain the (economically devastating) Franc/Euro peg; which it unceremoniously severed, amidst massive currency losses, barely two months later. Consequently, it will likely have a far more difficult time convincing Swiss citizens that ending its (economically devastating) banking Ponzi scheme is a bad thing, so I’m looking forward to seeing how this plays out, amidst the backdrop of a collapsing European economy, featuring expanding political, geopolitical, and social instability. As if the Swiss vote “yes,” it will have a profound, worldwide, Central bank-neutering impact – at a time when the “need” for (instantaneous collapse averting) money printing will be perceived to be at an all-time high – amidst a NIRP-infested, QE-plagued continent already on the cusp of ruin.
To the contrary, care of this week’s blatant, PPT-orchestrated “Santa Claus rally” – which (temporarily) stabilized collapsing stock, commodity, and currency markets, amidst a slew of ugly economic data; massive mutual fund redemptions; the thinnest trading conditions; and worst market “breadth” imaginable; Yahoo Finance’s “Christmas Top Story” is…drum roll please…”why stocks are still the place to be in 2016.”
That said, the 15 year process of using unprecedented money printing, market manipulation, and propaganda to prolong history’s largest, most destructive fiat Ponzi scheme; first, after it peaked in 2000; and subsequently, when it broke in 2008; has clearly run its course. All around us, the tell-tale signs of “Economic Mother Nature’s” inevitable, unmitigated victory are around us – from exploding debt; to collapsing currencies; unprecedented commodity and industrial overcapacity; the destruction of the Middle Class; and imploding real incomes – amidst a collapsing global economy, historically suppressed interest rates, and an inflated cost of living. In some place, like Venezuela – hyper-inflated.
However, nowhere is the “deformation”of what was once capitalism seen more vividly than in the Precious Metal markets, where Cartel-suppressed paper prices have caused a massive, unprecedented dislocation in the physical markets where actual metal is transacted. In both cases, 2015 will represent the highest-ever level of global demand; whilst above ground inventories are. for all intents and purposes, at an all-time low (and likely, far lower when considering how much gold has likely been “double-counted”). Moreover, not only has production already peaked – in silver’s case, 5%-10% from 2014’s level – but the prognosis for the coming years is one of potentially dramatic declines.
Moreover, said deformation has unquestionably “peaked” in the media as well – at least, it couldn’t get worse – particularly in the Western world, where brainwashed Americans, Europeans, and Japanese still believe their currencies, which have in a few short decades been dramatically inflated, are money worth storing one’s life’s savings in; even as their purchasing power implodes; and the banks they store it in not only pay zero interest rates, but have the power to “bail them in” when the next crisis arrives.
To that end, gold and silver have many enemies – as they threaten a status quo enabling the “1%” to garner, and control, the vast majority of the world’s wealth and power. However, in light of the accelerating collapse of fiat currencies; and explosion of real money demand; it’s becoming crystal clear that the “war for minds” is being decidedly lost by TPTB, and won by “Economic Mother Nature.” To that end, Doug Casey has done a wonderful job, in thisarticle, dissecting the pathetic anti-gold propaganda that has mesmerized those intoxicated with the PPT’s relentless equity market support, and the Fed’s equally pervasive bond and housing market backstopping for the past two decades. Heck, people actually believed “you can’t eat gold” to be a viable reason to not own it during 2001-2011, when prices rose every single year!
Oh, the Cartel is still at it; more actively, and blatantly, than ever. However, the aforementioned “perfect storm” of upcoming supply shortage – much less, as said “final currency war” goes nuclear – has clearly brought history’s largest, most destructive fiat currency regime to the brink. And even if it takes somewhat longer to completely break, the inevitability of the “New York Gold Pool’s” “weakening” – yielding significantly higher gold and silver prices – has never appeared more imminent, even if “imminent” itself is difficult to define.
In a nutshell, “gold always has, and always will, win” – which is why we own it (and silver), no matter what “price” the paper manipulators orchestrate. In time, said propaganda will be mocked as vociferously as the anti-gold crowd mocks “goldbugs” today. Who, in reality, are simply truth seekers, who believe one should be paid something real for their hard work. As opposed to unbacked promises by organizations known to have reneged on every promise they’ve ever made.