It’s the penultimate day before the Fed and Bank of Japan destroy what’s
left of their “credibility” – and my god, it’s an utter horror show of
economic implosion, monetary lunacy, political and corporate corruption,
market and data manipulation, and military and diplomatic provocation out
there. Typically, I “calm” myself in such situations by realizing it
could be worse – by considering “worst-case scenarios,” then appreciating
that we’re not there…yet. Unfortunately, what I see – politically,
economically, socially, monetarily, and militarily, tells me a whole lot of
worst-case scenarios are about to play out in the “first world.” Which
sadly, nations like Brazil, Venezuela, Greece, and countless other “second”
and “third” world nations are experiencing as we speak.
Before I get to today’s very important topic, I want to point out
the across-the-board horrors that cumulatively, threaten the mass breakdown
of financial markets, monetary stability, and even political and social
order. And not, “in the future,” but NOW. Frankly, it’s difficult
to find a starting point, given how many ugly stories are out there; but seeing
former Republican President –and CIA Director – George H.W. Bush endorse
Hillary Clinton, demonstrates just how lost, and corrupt, America has
become. This, on the day it was discovered that Hillary’s Associate
Paul Combetta was in fact “bleaching” her illegally stored,
confidentially-created emails, from her time as Secretary of State.
[July 24, 2014] Hello all- I may be facing a
very interesting situation where I need to strip out a VIP’s (VERY VIP) email
address from a bunch of archived email that I have both in a live Exchange
mailbox, as well as a PST file. Basically, they don’t want the VIP’s email
address exposed to anyone, and want to be able to either strip out or replace
the email address in the to/from fields in all of the emails we want to send
out.
Read more here
Then we have the U.S. army “accidentally” killing 62 anti-ISIS Syrian
soldiers this weekend. Then, having the gall to accuse the Russians of
attacking an aid convoy the very next day. And Hillary Clinton, whose
Middle East wars have destroyed tens of millions of lives, accusing Donald
Trump of fostering terrorism! And my god, supposedly “conservative”
Wells Fargo stealing tens of millions from clients – only to have the
employee in charge of the crime receive a $125 million “golden parachute”;
the CEO say he’s “sorry,” but won’t resign; and NO ONE being arrested!
And how about the “coincidental” bomb attacks in New York and New Jersey, in
which an Afghani national has been arrested – prompting a new wave of ugly
political rhetoric, calls for closed borders, and new “anti-terrorism”
measures.
Economically, just how much more obvious can it be that history’s largest
financial bubbles are collapsing as we speak – from high-end real estate to
“emerging art”; exposing just how insane the deformation created by
the hyper-inflating of history’s largest, most destructive fiat Ponzi scheme
has become? In China, mortgage loan demand hit an all-time high
last month, whilst business loan demand hit an all-time low – the
result of a government fostered housing mega-bubble that has created excesses
unlike any since the Japanese real estate bubble of the 1980s. To that
end, cumulative Chinese debt has essentially doubled since the 2008 crisis,
to roughly $30 trillion – a significant portion of which, financed vacant
apartments in hyper-bubbly cities like Beijing and Shenzhen, whilst the
Chinese economy is experiencing its lowest “growth” since records commenced
30 years ago. Heck, the Bank of International Settlements itself, just
this week warned that China faces a full-blown banking crisis!
Here in the United States of Lies and Propaganda, we’re to believe the
National Association of Home Builders’ confidence exploded in August – whilst
new home starts, reported this morning, plunged. Or that 50%
of all new “jobs” since the 2008 crisis were created by the BLS’ birth-death
model, despite new business formation free falling. And that
the unemployment rate is at a multi-decade low, despite record low labor
participation, declining real wages, and countless layoff announcements from
major corporations. Port traffic is down 5% year-over-year, Treasury
tax revenues are down nearly that amount, essentially all economic
data is declining, and corporate earnings have fallen for six straight quarters
– but don’t’ worry, all’s well. Meanwhile, oil prices are plunging
anew, threatening further, drastic cuts in the sector that not only is
responsible for one-third of all U.S. corporate capital spending; but has
been the only sector to generate high-paying jobs since the 2008
crisis. And oh yeah, has more soon-to-default junk bonds within it,
than all others combined. And yet, we’re told that third quarter GDP
will be up 3%, after barely averaging 1% for the prior three!
Heck, even “Fed Whisperer” Jon Hilsenrath said no rate hike “until
December” this morning – and yet, the “recovery” propaganda simply won’t go
away. In other words, the Washington, Wall Street, and (captive) MSM
economic “hockey sticks” – which I experienced first-hand as a Wall Street
buy- and sell-side analyst – simply cannot be eradicated, no matter how bad
things get. That is, until the “all-important” stock market – which,
with each passing day, bears less and less resemblance to economic reality –
is finally “lost.” Which I assure you, it will be – via crash or
hyperinflation.
In Europe, Deutsche Bank’s stock is freefalling anew – as I write, to
within $0.10/share of its all-time low of $12.49/share; as it becomes
increasingly obvious it will not survive the “straw that broke the Euro’s
back” – which incredibly, was the U.S. government’s demand for $14 billion it
doesn’t have. And not just Deutsche Bank, but the entire European
banking sector, €80 billion of monthly ECB QE notwithstanding; starting
with Italy’s Bank Monte Paschi; which, LOL, needs to sell $10 billion of
loans no one wants, and raise $5 billion of equity, by year-end, despite not
a shred of interest in the dying company, which has already raised capital
twice in the past two years, but has a total enterprise value of just $1
billion to show for it. Better yet, Italy’s soon-to-resign Prime
Minister, Matteo Renzi – Italy’s fourth since 2008 – is openly
attacking Germany for patronizing Italy regarding the health of its
collapsing banking system, by correctly stating that Deutsche Bank’s problems
are far greater. Of course, since all such banks are
intertwined – plus, the thousands of corporations, dozens of governments, and
billions of people with stakes in them – if one goes, they all go. And
I assure you, far more than one are about to go.
And then there’s the gold Cartel – which NEVER in my 14½ years in the
sector has worked so hard, or blatantly, to suppress the markets they know
to be their “Achilles Heels.” I mean, just how obvious can it be
that the same algorithms are being used, day in and day out, to suppress paper
gold and silver – whilst prices in nearly all other currencies are at,
near, or well above previous all-time highs; as physical demand
achieves new highs every year? Heck, even the MSM is writing about how Central
banks themselves have been buying
gold for years…and yet, prices have such “trouble” rising. Just
wait until Central banks are forced to admit such buying – whilst
increasing it exponentially – to protect their rapidly collapsing
currencies…just as today, when they admit buying stocks and bonds.
Last but far from least, today’s incredibly important topic – of what I
believe may be a watershed event, upcoming over the next two days.
Which is, the Federal Reserve and Bank of Japan’s respective policy
statements tomorrow; at least of one of which, and possibly both, may fully
destroy what’s left of the “credibility” they still have. Which, I
might add, is only due to the blatant support of stock and bond
indices they have prevented them from rightfully reflecting an economic,
political, and monetary environment worse not only than 2008, but 1929.
At least in 1929, the gold-backed dollar was still worth something –
whilst debt was nearly non-existent, care of the gold standard that
made it so difficult to create.
Many views have been spouted about what will be said tomorrow, starting
with when they will actually be stated – as clearly, both banks are
scared of “going first.” Heck, the Bank of Japan hasn’t even published
the time of their policy statement, as they are so terrified
of having their potentially rogue statements “mis-timed.” Are they
colluding with the Fed? I have no idea. But frankly, the fact
that the timing appears to be as big of an issue as the content, demonstrates
just how fearful they are of another “policy error,” from a bank with
literally no margin for “error” at all. Honestly, why anyone cares what
these people have to say is beyond me – unless, of course, they decide
to “go rogue,” by taking hyperinflationary, currency war provoking monetary
policy to new, unheard of levels. Frankly, I would be shocked if they don’t
announced something out of leftfield, given how desperate Shinzo Abe
and Hirohiko Kuroda are to save their jobs, their collapsing legacies, and
the “Land of the Setting Sun” itself.
As for the Fed, they will yet again prove me right by not raising rates –
making a mockery of their, and Goldman Sachs’, prediction of “four rate hikes
in 2016.” I’m sure they would love to simply say nothing else,
other than the usual FOMC boilerplate about being “data dependent”; oil price
declines being “transitory”; “inflation” likely to rise in the “medium-term”;
blah, blah, blah. However, in their ridiculously blatant attempt to
suppress Precious Metals over the past month, by relentlessly speaking of
imminent rate hikes, they will be forced to address December in more
than a cursory manner. Most likely – that is, if Deutsche Bank’s
collapsing stock isn’t causing a global panic by tomorrow afternoon – they’ll
pretend a December rate hike is a “strong possibility.” However, even
that may well catalyze a massive stock decline, given how ZIRP-addicted – and
NIRP-craving – markets don’t want to hear anything other than “lower
for longer.” Which, shortly, will become an ECB-like call for “QE to
Infinity.” And not the covert type they are performing today –
in propping up stocks on a daily basis. But an overt QE4,
which will make QE’s 1, 2, and 3 pale in comparison.
No matter what these two dying institutions say, I believe that by the
time the dust settles on Thursday – ironically, my birthday – both
the Fed and Bank of Japan will have dramatically reduced their
credibility. And if the “markets” don’t co-operate, manic manipulation
notwithstanding, it may well be September 21st, 2016, that goes down in
history as the “day the Central banks died.”
Hopefully, you’ll have protected yourself by then, as the ramifications of
the serial demise of the “leaders” of monetary destruction are almost to
horrifying to consider. Remember, once the ball starts rolling
downhill, it will be impossible to reverse; and if you haven’t taken
precautions beforehand – like, for instance, purchasing the real
money gold and silver always have been, and always will be – you may
never again get the chance, certainly not at prices anywhere near today’s
historically suppressed prices.
