Looking back at the last three days’ articles, I’ve clearly been, even for
me, riled by “deformations” so egregious – of financial markets, media
commentary, and political and social goings-on – they’ve cumulatively
dominated my writings. To that end, whilst I unwaveringly sleep the “sleep of the just”
knowing my savings are in the only real money the world has known, there
aren’t words for the demoralization I am currently experiencing each day. And
thus, whilst my convictions of the Precious Metals “end game” have
never been stronger, the pain experienced in watching it unfold is of
equal force.
In other words, stark validation of what I wrote in last month’s “record
PM demand, record low sentiment”; as unquestionably, U.S. Precious Metals
sentiment is back to levels before the bull market commenced in 1999,
whilst global physical demand is unquestionably at an all-time high. To wit,
physical withdrawals from the Shanghai Gold Exchange alone are up 20% from a
year ago, to a new all-time high – accounting for an astonishing 85% of total
global production! And again, the operative term is U.S. Precious
Metals sentiment; as throughout the world, plunging fiat currencies have
caused gold prices to soar. And thus, whilst the Cartel has successfully
suppressed “dollar-priced
gold” 38% below its all-time high, the average global denizen sees gold
at just 15%-20% below its local all-time high. Trust me, when dollar-priced
gold is just 15%-20% below $1,920/oz again – i.e., $1,535-$1,630/oz –
Precious Metal sentiment will be off the charts; likely, amidst a
political, economic, and financial market situation bordering on chaos.
Fortunately for you, nothing inspires me more than financial survival and
the spreading of truth – which is why it’s such a pleasure working for Miles
Franklin. Andy and David Schectman, who co-manage the firm they launched in
1999, share these traits; and due to a combination of hard work, business
savvy, and personal commitment to our product, have successfully built Miles
Franklin for 26 years, through fat times and lean. Consequently, we are well
positioned to weather the storm that commenced with TPTB’s “point of no
return” manipulation acceleration in mid-2011; as opposed to many of our
competitors, some of whom have resorted to deep price discounting just to pay
the bills. Just as Tulving did two years ago, when it went bankrupt holding
millions of dollars of clients’ money. Remember, in the largely unregulated
bullion business – except, ironically, in our home state of Minnesota – you
“get what you pay for.” Miles Franklin can compete with essentially anyone on
price and service
– which is why we have been around for 26 years, with a perfect Better
Business Bureau rating. That said, if you see a bullion dealer offering
prices well below the rest, you can bet they’re amidst significant financial
hardship. To which we advise, RUN, and do so swiftly.
Back to the angst that clearly showed itself in “Father’s
Day Musings – of an Ominous, Uncertain World”; “Entropy and Chaos”;
and “Hamilton
vs. Jackson, and Bernanke vs. Real Money,” I’m finding it progressively
harder to find authentic, factual material to work with – given just how lazy
the journalistic world has become, and how anesthetized investors have become
to financial markets that no longer allow negative news to be discounted.
At least, not in “last to
go” markets like the “Dow
Jones Propaganda Average” and paper gold and silver – as opposed to the
commodity; currency; and recently, fixed income markets, which are clearly
starting to spiral
out of TPTB’s control.
Of course, as I vehemently emphasized in last week’s “end of the new
normal,” there is NO WAY “Economic
Mother Nature” can be defeated. And clearly, when said financial markets
start to unravel – whilst debt, money printing, and social and geopolitical
turmoil go parabolic – said “end game” is unquestionably near. In other
words, if ever there was a time to fight the fear, apathy, and lethargy said
“powers that be” have engendered, it is NOW. Fortunately, not only is the
window to PROTECT YOURSELF with physical precious metals still open; but care
of Cartel suppression, you have been afforded the ability to do so at amongst
the cheapest valuation’s gold and silver have ever traded at – whether
measured against the cost of production, the amount of fiat currency (and
associated debt) created, or the cumulative level of global financial,
economic, and political risk. And on the topic of the cost of production,
recall how yesterday, I wrote of the dire condition of countless major miners
– many of which, in my view, will be in extreme financial distress by
year-end if prices don’t’ dramatically increase beforehand.
To wit, this
laughable press release by one of the world’s largest primary silver miners,
Coeure D’Alene – which has been on my “potential bankruptcy list” for the
past year – of the desperation bond offering, and draconian capital
expenditure and production cuts, they completed yesterday to “increase cash
flow,” as they continue to hemorrhage equity at an alarming rate. This is
exactly why I believe gold industry production has peaked; and why the silver
production peak will be right on its heels – with a potentially far
larger production decline as base metal prices inexorably decline, amidst
the worst global economic conditions, and mining infrastructure oversupply,
of our lifetimes.
Back to the news, the madness we are witnessing, on a global scope, is
unprecedented since World War II. Fortunately, the Miles Franklin Blog’s
focus is principally on the financial side of things, lest my head would
probably explode. And even so, it’s on the verge of doing so – as wherever
one looks, gross “deformations”
are patently obvious; from the spectacular equity bubble inadvertently
created by the “chickens without heads” at the PBOC;
the lunacy of Japan’s Abenomics – where, two years after it commenced, Shinzo
Abe’s approval ratings just hit an all-time
low; to the U.S., where home sales remain at recessionary levels despite
record low mortgage rates and six years of stock market goosing; except,
“coincidentally,” in the “Northeast” region that receives the vast majority
of free, printed money. I.e., the canyons of Wall Street, and the suburbs of
Washington D.C. As for the “99%,” they are living through the lowest home
ownership – and family formation – rates in generations; and adding insult to
injury, record high rents.
As for Europe, it could not be clearer that not only have the “PIIGS”
failed – in large part, due to Wall
Street chicanery – but the entire, ill-begotten, ill-fated Euro zone
experiment, incorporating the European Commission, European Parliament,
European Central Bank, and the Euro currency itself. And no, the Euro
currency is decidedly not “too big to fail”; as unlike the U.S. dollar, there
are simply too many countervailing political forces to control. Here in the
States, we simply have to deal with a handful of crackpots that still believe
the Confederacy still exists, 150 years after its defeat. However, as I wrote
four
years ago, Europe is a far more untamable animal – particularly in
light of its horrifying financial and economic condition (which four years
ago, was vastly better than today). To wit, what I wrote in August
2011.
“The Eurozone is comprised of 23 countries, each of which had its own
currency, language, and culture centuries before the Euro’s creation in
1999. When economic times were good in the early 2000s, the ruinous
fiscal policies of the PIIGS were obscured by more responsible members such
as Germany, Finland, and the Netherlands. Germany’s obsession with
creating a unified monetary system clouded its judgment, allowing the PIIGS
to rot the system from the inside out – and now that economic times have
turned bad (is that an understatement of what?), they are realizing just how
blinded they allowed themselves to become. Consequently, the Eurozone
system is on the verge of collapse; and frankly I’d be shocked it if survives
another 12 months.
Well, it didn’t collapse 12 months later; but only because eleven months
later, in July 2012 – with the entire PIIGS complex on the verge of collapse
– Mario Draghi claimed he would do “whatever it takes” to save the Euro,
suggesting the very open-ended QE scheme we are witnessing today. In other
words, “Goldman Mario” and his team of ECB buffoons will have you believe –
in the ultimate illustration of irony – that the Euro can be saved by hyper-inflating
it. Which is decidedly what they have done; as since Draghi took over the
ECB – “coincidentally” in November 2011, right around the time of said “point
of no return” – the Euro has plunged by 22% against the dollar, yielding
untold inflationary horrors for hundreds of millions of European citizens.
Not to mention, billions of global denizens holding lesser currencies,
who were the primary “beneficiaries” of the inflation exported to them by the
ECB, Fed, and other issuers of “stronger” fiat currencies. But don’t worry,
the ECB claims “deflation”
to be the biggest problem.
As for Greece – the birthplace of democracy, fine arts, and countless
other timeless benefits; it was simply the weakest link in a chain of weak
links, doomed from the start, given a culture of economic laxness that,
ironically, starkly contrasts with the renowned work ethic of its
shipbuilders, diner owners, and other business luminaries (those who live in
New York, know exactly what I mean about Greek diners). And whether
the lure of Goldman Sachs’ financial engineering sirens; the complacency of
believing the ECB “had their back”; a disproportionately devastating impact
from the 2008 crisis; or otherwise, Greece is as dead broke as any country on
the planet – which is saying a lot, given how many “third world” banana
republics are out there.
Ironically, Greece’s principal creditors are the very entities that
welcomed it with open arms in 1999, despite it not meeting the
Maastricht entrance criteria; greedily, hoping to sponge off Greece’s then
prolific tourism and shipbuilding industries. Fast forward to today, and said
“allies” are feeding it more and more debt – nearly €250 billion of
“bailouts,” and counting – whilst counter productively, demanding the same
“austerity” measures they themselves have ignored. At this point, Greece is
so indebted, and so politically, economically, and social devastated, there
is not a chance of survival under the current, warlord-like debt regime. This
is why the decidedly “anti-austerity” (read, anti-Euro, pro-default) Syriza
party swept into power in February, and why the “Grexit” we
guaranteed two years
ago is likely as imminent as it is inevitable.
“I have ZERO doubt that – one way or the other – Greece will eventually
exit the EuroZone; potentially, providing the “flash point” catalyzing the
end of the Western banking system; and with it, Financial Armageddon.”
Today (Wednesday), we are just six days from the conclusion of the second
bailout; with nary a hope or prayer of a third, substantial bailout – no
matter how much markets and media outlets are manipulated to paint such a
picture. Frankly, after today’s all out collapse of “deal” talks – with
everyone from the negotiating parties to their various constituents in
complete disarray – the odds of an acceptable agreement being reached; let
alone, ratified by said constituents, appear close to zero. Not that such a
“deal” would be anything but a temporary band-aid on a gaping wound. However,
at this point, a Greek default and euro zone/currency exit are all but a fait
accompli.
Regarding today’s title, can the Greek fallout be “contained” when it
inevitably occurs – without a simultaneous collapse of first the PIIGS
credits; second, the European political, economic, and social fabric; third,
the Euro currency itself; and fourth, the multitude of global “manipulation
organizations” – particularly as their cumulative efforts have pushed
financial assets to all-time high valuations; and conversely,
history’s most reliable safe haven assets, gold and silver, to all-time
low valuations.
I know where I have taken my stand; so the only question that
remains is what you believe. And don’t take my words for the
most likely, anarchistic chain of events – but instead, those of Marine Le
Pen, who most likely will be the next President of France.
“Today we’re talking about Grexit. Tomorrow it will be Brexit, and the
day after tomorrow, it will be Frexit.”
And don’t forget for a second that the Spanish elections are just
six months away – in which, the Syriza-like Podemos party is likely to win;
with its Alexis Tsipras-like leader, Pablo Iglesias, likely to be its next
Prime Minister.