Do you want to know why the Cartel was so hell bent on capping
gold at $1,340/oz on Monday, in perhaps the most PM-bullish news environment
imaginable? You know, when Deutsche Bank was plummeting 9%; the Algiers
oil meeting was on the verge of failing; and the stock market was plunging –
albeit, by exactly the PPT’s “ultimate limit down” of 1%; ahead of the
potentially status quo changing debate that evening? Let alone
yesterday, when DB plunged anew, and the Algiers meeting did in fact fail?
Simple, because yesterday was COMEX options expiration day, and $1,338
represented gold’s 50-day moving average. Which is probably why
“someone,” for the third time in the past week, dumped three massive “market sell” orders around the COMEX opening –
the first, for 7,000 contracts,” in the thinly-traded “pre-market” at 6:45 am
EST; the second, for 6,000 contracts, ten minutes before the COMEX open, at
8:10 AM EST; and the third, for 5,000 contracts, at 8:45 AM. All in
all, 18,000 contracts, representing 1.8 million ounces of “paper gold,” worth
$2.4 billion. In other words, par from the course, amidst a “summer of
hell” for PM investors – during which, as the political, economic, and
monetary world crumbled around it, the Cartel has maniacally held Precious
Metals around their initial post-Brexit highs. Quite obviously,
guarding the key technical levels of $1,375 oz (gold’s five-year downtrend
line) and $20.40/oz (silver’s 50-month moving average) – knowing full-well
that “buy stops” above those levels will likely catalyze the next, massive
surge in real money buying we all know is coming. And given
how these “terrifying trends” are worsening, I have never felt stronger that
this Fall will be the “season of hell” for the powers that be, at the expense
of those who have done the right thing by preparing for it.
Already, said “powers that be” are in massive “damage control” mode;
first, in crude oil – i.e., the world’s most important financial market,
given how many corporations and sovereign nations depend on high prices to
maintain solvency – when for the third week in a row, inventories were
“magically” lower than expected, mere hours after yet another OPEC failure
caused prices to plunge. This time, below the ad hoc “oil PPT’s”
blatantly obvious “line in the sand” at $45/bbl, which it has fiercely
defended all year. Frankly, the American Petroleum Institute, or API,
data, is starting to look every bit as fraudulent as the ADP jobs data.
That is, the so-called “privately compiled” oil inventory data released every
Tuesday evening, before the publicly compiled Department of Energy data
each Wednesday morning. Just like the ADP, or Automated Data
Processing, jobs data, which is reported two days before the BLS, or Bureau
of Labor Statistics’ payroll data, on the first Friday of each month.
To that end, with each passing day, the line of demarcation between
“private” and “public” data is blurring further, as all related parties are
clearly incented to report “better than expected” data, no matter what
reality depicts. I mean, that’s what “seasonal adjustments, “double
seasonal adjustments,” and “birth/death models” are for, right? Heck,
the BLS’ birth-death model alone has been responsible for more than 50% of
all “jobs” created since the financial crisis, despite the rate of small
business formation, which is the entire premise behind its existence, being net
negative over this period. Unquestionably, the culmination of
this ongoing “merger” between public and private compilation is best
personified by the 2014 IPO of “Markit,” a company that not only produces the
widely-followed, but statistically insignificant, PMI diffusion indices for
the U.S., but many other nations as well. Which, in my view, is as
“quasi-public” in the economic data generation arena as Fannie Mae and
Freddie Mac were in housing. And we all know how that turned out, huh?
Finishing my thought on the oil market, which as I write is trading
slightly below the oil PPT’s “line of demarcation” at $45, three hours before
today’s DOE report, it’s quite amazing how many supply data points can be
“better than expected” in a market so hopelessly oversupplied, the world’s
largest oil producers are having emergency meetings to discuss it. In
other words, like the Fed – which seemingly has “de facto policy
statements” on a weekly basis now, in its relentless, accelerating
efforts to jawbone increasingly “uncooperative” markets; the “oil PPT” is
creating as many “propaganda opportunities” as possible, to try and talk up
prices, when the underlying fundamentals are so painfully failing. In
this case – like the Fed, which spent four weeks hyping the September rate
hike that never happened; the oil PPT spent four weeks suggesting a major
production cut – or LOL, “freeze” – would occur at Algiers, which of course,
didn’t occur. Or frankly, come even close to doing so.
And yet, just like the Fed – which unfailingly, commences the next
“imminent rate hike” propaganda within days of failing to raise rates – the
Saudi Minister concluded the Algiers boondoggle by claiming a production
freeze deal was “possible” at the upcoming, bi-annual OPEC meeting in
November. As if a “freeze” would matter a whit in an historically oversupplied market,
from record production levels, with at least three OPEC members claiming the
right to be “exempt.” Which irrespective, would have the same real
world impact on crude oil prices as a ¼ point Fed rate hike. Which in
both cases, are moot concepts either way – as neither will occur!
As for Deutsche Bank, in the aftermath of Angela Merkel’s comment this
weekend that the German state would not participate in a bailout – as if the
public will for such an action even exists – “DB damage control” has been
launched in full force, starting with yesterday’s PPT “hail mary” rally at
the NYSE open, just as the German-traded shares were about to go under the
key psychological level of $10/share. Which secondarily, would have
ignited speculation regarding the imminent ignition of the company’s
hyper-dilutive “CoCo,” or contingent convertible, bonds.
Next, in true “oil PPT” and Fed-like manner, a series of unsubstantiated
“rumors” of ongoing “bail-out” discussions. And last but not least, CEO
Jon Cryan’s “Dick Fuld moment” last night, in claiming Deutsche Bank is
“comfortably equipped with free liquidity,” with “no need for a capital
raise.” Just as Dick Fuld, the CEO of Lehman Brothers, claimed in April
2008 that the “worst of the crisis is behind us,” and “we have billions of
highly liquid assets.” Geez. If it weren’t so sad – and
catastrophically perilous to the entire world – one might even consider such
idiocy humorous.
Last but not least, the Federal Reserve – which, as noted above, have
become the undisputed kings of jawboning. Which frankly, they must be,
given how they’ve spent essentially all their monetary ammunition, and
destroyed essentially all of their credibility – amidst an historic economic
crash; an unprecedented debt explosion, in large part, due to the
Fed’s own, hyper-inflationary policies; historic U.S. Treasury divestment; and an election Hillary Clinton
must win if Janet Yellen wants to keep her job.
Which is exactly what they’ll try to do this morning, when Janet Yellen
gives testimony to Congress – albeit, in this case, focused more on
“supervision and regulation” than an actual economic outlook. Not to mention,
after Whirlybird Janet speaks this morning, five other Federal Reserve
governors and Presidents have speeches planned, for anyone that still doesn’t
realize how desperate the Fed is to get its latest “message” across.
So, how do these kings of manipulation play this one, given that it’s
nearly impossible to successfully implement damage control on a horse with a
broken leg – let alone, two? I mean, it was just one week ago
when the Fed failed to raise rates, after spending an entire month
emphatically suggesting it would do so. And during that week, the
economic data has measurably worsened – including this morning’s ugly durable
goods orders report; whilst oil prices have plunged, in the wake of the
failed Algiers meeting; and oh yeah, the stock of Europe’s largest bank has
gone into freefall mode, amidst fears of an imminent bankruptcy. Throw
in the aforementioned election, which at this point can be best described as
a dead heat; and lingering market fears of rising rates; and you can see how
careful JY must be. But hey, that’s what her team of wordsmiths does,
particularly when “accompanied” by history’s most maniacal market manipulation.
That is, until such frauds and fabrications inevitably “run their course,”
and plunge into history’s massive dustbin of failed efforts to corral
“Economic Mother Nature.” Let alone, history’s largest, most
destructive fiat Ponzi scheme; which even the Fed’s diehard, brainwashed
Keynesians are starting to acknowledge – such as former Philadelphia Fed
President Charles Plosser, who this very morning espoused that the Fed is
“concerned about credibility,” and “pretty good at conjuring up reasons not
to act.”
To that end, I’m not sure how much more emphatically I can plead for you
to look at what’s going on around you; decide what the most
likely outcomes are – particularly those with, for all intents and purposes,
mathematical certainty; and act to protect yourself, before it’s too
late. And moreover, to give Miles Franklin the chance to earn your
business, if such actions include the purchase and/or storage of physical
Precious Metals.
