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Macron Or Le Pen-Who’s More Bullish For Precious Metals?

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Published : May 08th, 2017
3270 words - Reading time : 8 - 13 minutes
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It’s still early Sunday morning, before the French election has been concluded.  Like the BrExit referendum and U.S. Presidential election, the powers that be are doing everything they can to rig expectations, in the hope of stealing the election for perhaps the least qualified, likeable, or competent candidate possible; and thus, prevent the “BrExit times 100” political, economic, social, and monetary ramifications that would unquestionably result from a Le Pen victory.  In a few hours we’ll know if they succeeded; but even if so, it will be a Pyrhhic victory at best – starting with the all but guaranteed stalemate at next month’s French Parliamentary elections; and more importantly, the continued economic, social, and monetary collapse.

Despite the fact that the results will be decided on a Sunday night – i.e., the Cartel’s “Sunday Night Sentiment” key attack time; the concept that Precious Metal prices would materially decline if Le Pen loses is frankly, comical, given that gold and silver have been taken down by 5% and 12%, respectively, in the past three weeks, despite collapsing economic data; plunging commodity prices; flat interest rates; escalating North Korean and Syrian political tensions; and oh yeah, a falling dollar, for those who propagandize the fallacious “relationship” it has with gold.

I kid you not, “the dollar” closed Friday at its lowest level since…drum roll please…November 9th, the day after the Election!  And how about that, gold and silver were $1,270/oz and $18.25/oz, respectively, on Election Day, compared to $1,228/oz and $16.30/oz, respectively, today.  And for perspective of how blatant this Cartel attack has been, copper and oil were $2.52/lb and $46/bbl on Election Day, compared to…wait for it…$2.52/lb and $46/bbl, respectively, today.

The benchmark 10-year Treasury yield has “surged” to a still near-record low 2.35%, from roughly 2.00% on Electio Day, well below the 50 basis points the FOMC comically raised the Fed Funds rate by; and of course, the “Dow Jones Propaganda Average” has risen 2,000 points, given that it is no longer allowed to decline.  Unfortunately, the propagandized “reasons” for this dotcom-like surge never materialized – given that per above, “Trump-flation” hasn’t emerged anywhere other than rigged, and patently useless, “soft data” indicators like “confidence” indices.  Unfortunately, the real world has experienced plunging economic data – such as the first quarter’s (comically overstated) 0.7% GDP “growth”; with essentially all material indicators worsening each month.  Then again, when financial markets have been commandeered, it makes total sense for the VIX to decline to multi-decade lows; and silver to fall 15 days in a row; amidst a backdrop of explosive political and economic uncertainty, and “dotcom-like valuations (of both stocks and bonds) in a Great Depression environment.”

As for silver, it shouldn’t surprise anyone that after taking the largest naked short position in COMEX history – to offset the equally largest speculative demand – the “Commercials” viciously attacked prices for weeks and end; until eventually, underlying physical demand was so strained, it was time to start covering said shorts.  Which, as we learned late Friday, they did so for the week ending Tuesday, May 2nd, at the sixth fastest rate in the three decades I have COMEX data.  And likely, will do so en masse in the coming weeks, especially if Marine Le Pen loses.

In other words, exactly what the Cartel did in late 2014, just ahead of the “Save our Swiss Gold” referendum; when, alongside one of the most virulently anti-gold propaganda campaigns in history – spearheaded by SNB President Thomas Jordan – Precious Metal prices were viciously attacked until the day of the referendum, to make sure the voting populace didn’t take an undue interest in this equally “BrExit times 100” political event.  Comically, Jordan vehemently espoused that mandatory gold purchases would prevent the SNB from having the financial flexibility to maintain its peg with the Euro.  Which, what a coincidence, was abandoned just three weeks after the referendum was voted down.  And wouldn’t you know it, gold bottomed the day of the referendum, and rocketed higher in the months ahead.

As for the “stock market,” I want to set the record straight, once and for all, for anyone who actually still believes it is not 100% rigged to the upside – just as paper Precious Metals are, for now, to the downside; starting with these three charts that demonstrate unequivocally, that the fraudulent, fallacious “Trump-flation” meme that supposedly is behind stocks’ dotcom-like valuations, is DEAD.  Not to mention, that as of last week, for the first time ever, the annual interest paid on Treasury debt – despite artificially QE’d rates to record-low levels – exceeded $500 billion.

Not that what I’m about to say is any different than what I’ve been stating – and proving – for the past decade, such as my relentless commentary about the “dead ringer” algorithm utilized on the “Dow Jones Propaganda Average” nearly every day, as first decribed in an April 2012 article of that name.  To wit, here’s Dow trading on three of the last four days – “magically” bottoming just after the Fed’s “open market operations” at 10:00 AM EST; which just happens to coincide with the London PM Fix, when physical gold and silver trading closes ; i.e., the Cartel’s long-standing “key attack time #1.”

Note how stocks are not “allowed” to decline in early trading.  After which, they gradually rise throughout the day, culminating in a “Hail Mary” rally at day’s end.  As opposed to Precious Metals – which, with equal regularity, are “walked down” into the close; and subsequently, per 2014’s “sixth sigma Precious Metal manipulation proof” article, in the ultra-thinly traded “aftermarket” from 4:00 to 5:00 PM EST.

That said, a series of Zero Hedge articles this weekend put the stock markets’ recent surge into perspective as clearly, and indisputably, as possible.  Starting with the fact that, due to the NASDAQ being not price-weighted like the Dow, but market-capitalization-weighted, a handful of stocks can literally move the entire index.  This is exactly what has happened; and why, per my 2012 “hedge bombs” article, the hedge fund industry has underperformed the rigged market indices they track every year since the 2008 Crisis.  To wit, not only do Apple, Google (Alphabet), Microsoft, Amazon, and Facebook account for 13% of the S&P 500, but a whopping 42% of the NASDAQ!

Then we have the giant pink elephant in the room that is global Central bank QE activities, both overt and covert.  Here, we see just the on-balance sheet assets of the world’s six largest central banks; which cumulatively, have increased by $17 trillion since history’s largest, most destructive fiat Ponzi scheme “peaked” at the turn of the century – including $11 trillion since it permanently broke in 2008.

The vast majority of these historically overvalued “assets” are in the form of Treasury, Sovereign, corporate, and mortgaged-backed bonds.  However, a handful of Central banks, like the Banks of Japan and Switzerland, purchase stocks as a part of official monetary policy – as opposed to the Fed, which does so covertly, within said “open market operations,” in close coordination, of course, with the “President’s Working Group on Financial Markets”; i.e., the PPT.  To wit, here’s a comparison of the Japanese Nikkei stock index to the Bank of Japan’s equity ETF holdings; which FYI, are now more than half of all ETFs outstanding.  Not to mention, this article describing how – just like the U.S. PPT, and China’s “National Team,” – the Bank of Japan enters the market nearly every time the Nikkei modestly declines.

Which isn’t even close to as blatant of this chart, depicting the Bank of Japan’s $4.4 trillion balance sheet.  Yes, the same $4.4 trillion as the Fed’s balance sheet (excluding “off balance sheet” items, of course), despite Japan having just one-third the U.S.’s population, and one-quarter its GDP.  Not to mention, a debt/GDP approaching 300%, and the world’s worst “demographic hell.”

The problem is, Japan’s stock market is still 50% below its 1989 nominal highs; and in -real terms, likely more than 75%.  This, from a Central bank that continues to cry “deflation,” despite having quadrupled its currency base since 2013, in a nation with one of the world’s highest costs of living.  I mean, look at this chart comparing the cost of living in Tokyo with some of the world’s most infamously expensive cities – like New York, San Francisco, and London!

And it’s not just the Bank of Tokyo, of course; as currently, Central banks are overtly monetizing close to $250 billion per month; this, despite no visible crisis to “blame” such hyperinflationary policy on; hitting a record-high monetization level in 2017’s first quarter.  Which clearly isn’t enough, given the irreversible, stagflationary nightmare that is virally spreading around the globe, at an accelerating pace.

However, the “icing on the cake” was an article revealing that the Swiss National Bank bought a record-high amount of U.S. stocks in 2017’s first quarter – and who knows how many non-U.S. stocks.  Yes, $17 billion in the first quarter alone, and $53 billion since mid-2014.

And wouldn’t you know it, the SNB’s first, second, third, sixth and seventh largest holdings are…wait for it…the aforementioned Apple, Google (Alphabet), Microsoft, Amazon, and Facebook!  In other words, stock markets’ record high prices and valuations; not to mention, record low volatility; is due solely to government/Central bank buying.  Which can only last for so long, given how said “dotcom-like valuations in a Great Depression Era” can’t last forever.  Just like paper gold and silver prices trading so far below the costs of production and mining industry sustainability; let alone, amidst an environment of plunging fiat currencies, surging physical demand, free-falling mine production, and rapidly vanishing above-ground, available-for-sale inventories.

Hopefully, this commentary – which I assure you, NO ONE else publishes, helps you to understand the mirage of current financial markets; and thus, how dangerous it can be to invest based on the propaganda that they are freely traded.  As no matter how hard “the powers that be” try, “Economic Mother Nature” always wins.  And the more divergent valuations become from economic reality – particularly in the physical Precious Metal markets, where actual metal must be produced, transported, and transferred – the more spectacular Economic Mother Nature’s ultimate victory will be.

On that note, I think I’ll go enjoy my Sunday, and see how the French elections pan out…

Well, it’s now early Monday morning, and a LOT has occurred in the past 24 hours.  But before I get to the “main event” – i.e., the ramifications of Emmanuel Macron becoming the youngest; most unqualified; and worst imaginable choice for French President, I want to make sure it’s not “glossed over” that a vicious verbal war broke out yesterday between the Oil minister of Saudi Arabia and the Defense Minister of Iran; essentially, threatening to militarily annihilate each other.  This, less than three weeks before OPEC meets to discuss whether it should extend November’s “production cut” deal; which in my view, had little chance of occurring in the first place, given the level of cheating by OPEC and non-OPEC members alike in the first six months; and more importantly, the exploding production from non-participating oil producers – like the U.S. shale industry, which has nearly returned to record production levels – that has stolen OPEC’s market share, and negated all of said “deal’s” production cuts.

Remember, crude oil production is the world’s largest revenue-generating industry – with by far, the most debt attached to it, both corporate and sovereign.  And thus, if the fraudulent “deal” is not extended, yielding sub-$40 (or $30?) oil, it may well trigger the biggest global “debt event” since the 2008 mortgage prices.  This, with due respect to the ongoing bursting of today’s gargantuan U.S. subprime auto and student loan bubbles; the historically dangerous, Central bank-fostered real estate “echo bubbles” in much of the Western World; and the grand-daddy of them all – the unprecedentedly enormous Chinese credit/shadow banking bubble.  In the process, bankrupting Saudi Arabia itself, as the $100 billion Saudi Aramco IPO that was expected to “save” it’s dying finances would be indefinitely postponed.

As for France, even I understand the quandary its historically strained populace was facing.  As let’s face it, it truly would have been a “BrExit times 100” financial market/ economic reaction if Marine Le Pen won.  Even the PPT and gold Cartel would have been overrun in its wake; as well as Europe’s “bond PPT,” the ECB, as it would have been painfully apparent that it would be imminently broken up.  Yes, Le Pen would clearly have been the better choice for France’s long-term viability, but my guess as to why the French gave this poor excuse for a human being 65% of the vote is because they were simply too scared of the short-term chaos that would ensue.

As it is, they have elected a “mini-me” version of Francois Hollande, who didn’t even run for re-election because he had the lowest “approval” rating in French Presidential history.  A man who, at age 39, has barely any life experience, let alone in the political realm – having only served, at ages 36-37, as Economics Minister for the aforementioned lowest-rated Presidency in French History.  After which, he abandoned Hollande to launch his own political party – no doubt, with the support of the same “groomers” who gave him a cushy job as an investment banker at…wait for it…the Rothschild’s bank; where he worked for just three years, from age 30-33, where he magically became a multi-millionaire, despite having zero background in banking.  Trust me, having worked at Salomon Smith Barney in NYC from ages 28-34 – after having busted my butt for nearly a decade, and earned my CFA charter, to get to that position – I can tell you that the odds of a 30-year old magically getting hired by a top-tier investment bank, and being immediately handed plum accounts like Nestle that would make one an instant multi-millionaire, is ZERO.  Unless, of course, one is being “handled” in a manner of, say, Barrack Obama or Hillary Clinton.  And we know how that turned out for America, right?

Anyhow, the man who’s most notable accomplishment is, at age 15, seducing his 40-year-old high school teacher – and admirably, marrying her a decade later – is now the President of one of the world’s most pivotal nations.  Which not only has a vastly insolvent banking system, one financial crisis from collapse; but a hyperbolic immigration problem, worsening with each passing day – which Marine Le Pen vowed to end, but Emmanuel Macron welcomes with open arms.  Not to mention, the political conflagration that will ensue next month, when a deeply divided nation splits its Parliamentary votes amongst four parties, with violently opposing aims.

Which brings to the fore, the question of who is actually better for Precious Metals – and financial markets in general – Emmanuel Macron or Marine Le Pen?  Which may sound like a crazy question; or perhaps, a “sour grapes” rationalization from a Precious Metal bull who had hoped a Le Pen victory would have once and for all destroyed the gold Cartel.

However, the long-term answer to that question isn’t as clear, despite the short-term answer being obvious.  The reason being, that if Le Pen was elected, the ECB would have been imminently destroyed, to the benefit of all Europeans.  To wit, if that occurred, my article this morning would have been titled “Ding Dong, the ECB is dead.”  Which, I might add, will be the theme I utilize when the Fed is inevitably forced to take rates back down to zero, and launch QE4; i.e., “Ding Dong, the Fed is dead.”

However, now that the ECB has been saved (or more aptly, given a “stay of execution”), it will continue to destroy Europe – and by proxy, the world – at an accelerating pace, now that the global economy is in freefall mode.  To that end, one of the bullion industry’s leading commentators continues to espouse the silly view that because European inflation gauges have modestly ticked higher, the ECB is on the verge of ending QE.  Which couldn’t be more incorrect, given that a) the global economy will dramatically weaken from this point on; and b) the only reason said gauges have risen is the artificial boost by “oil PPT” market rigging.  Which per the above commentary, is rapidly dying; not to mention, the entire commodity complex – which is getting slammed again this morning, to the point that year-long support on the CRB commodity index, as discussed in Friday’s “global economic disaster, dead ahead”, is on the verge of collapsing.  To the contrary, the ECB’s only constraint is that it is running out of sovereign and investment grade corporate bonds to monetize; which is why it will, per the above commentary, it will shortly be considering the overt monetization of stocks (and likely, junk bonds), like its hyperinflationary brethren at the BOJ and SNB.  To wit, all it will take for them, the Fed, and all Central banks to “go nuclear” is “history’s most overdue financial crisis” – which I assure you, must inevitably arrive.

Not to mention, the impact on CHINA of the ECB “maintaining power”; as now that the election is over, the Euro can again resume its inevitable, ignominious march to dollar parity – which started today, with the Euro’s “sell on the news” plunge.  Which, in true “if a nuclear bomb destroyed Europe” fashion, will cause the dollar index to again surge to multi-decade highs – likely, by year-end, in my view.  Which in turn, will cause the PBOC to start devaluing the Yuan anew – i.e, the “cataclysmic, financial big bang to end all bangs” – which today’s extremely weak Chinese trade data only fuels the fire of further.  I mean, for all the hype about the PBOC having “backed off” its historic devaluation policy, the Yuan exchange rate – as I write, at 6.91/dollar – is barely above the all-time low peg of 6.99/dollar from early January, which prompted draconian capital controls amidst an historic capital flight – which, I might add, caused Precious Metals and Bitcoin to soar.  And what do you know?  Both are rising today, too, knowing full well what’s coming.

After the past three weeks’ epic Precious Metal bombing, gold and silver are rising on the “news” of Macron’s not-so-surprise victory.  Which, as discussed above, reminds me A LOT of what occurred before, and after, the 2014 Swiss gold referendum; when clearly, the powers that be felt the need to discredit gold before the vote.  In that case, to prevent voters from believing gold would be “good” for Switzerland; and this time, to prevent them from believing rising gold was “discounting” a Le Pen victory.  And thus, the historically blatant PM smashes, yielding a record 15 straight days of silver declines, amidst violently “PiMBEEB” economic and political headlines – featuring these unfathomably blatant statistics, as described by Andrew Maguire – causing silver to reach essentially its most oversold level in five years, despite NO ONE actually selling any material amount of physical silver.

And thus, on a morning when the only other material headline is the accelerating run on Home Capital Group, the “Countrywide Credit of Canada” that is about to spectacularly collapse, it may well be the best-ever opportunity to PROTECT your financial assets from the inevitable, horrifying ramifications of the post-Macron world.  And if such protection involves the purchase and/or storage of Precious Metals, at historically undervalued prices, we hope you’ll give Miles Franklin a call at 800-822-8080, and give us a chance to earn your business.

Data and Statistics for these countries : Canada | China | France | Georgia | Iran | Japan | Jordan | Saudi Arabia | Switzerland | All
Gold and Silver Prices for these countries : Canada | China | France | Georgia | Iran | Japan | Jordan | Saudi Arabia | Switzerland | All
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Andrew Hoffman was a buy-side and sell-side analyst in the United States (including six years as an II-ranked oilfield service analyst at Salomon Smith Barney), but since 2002 his focus has been entirely in the metals markets, principally gold and silver. He recently worked as a consultant to junior mining companies, head of Corporate Development, and VP of Investor Relations for different mining ventures, and is now the Director of Marketing for Miles Franklin, a U.S.-based bullion dealer.
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