Well, the five-year anniversary of the “Sunday Night Paper Silver
Massacre” came and left with a whimper – as despite the 141st
“Sunday Night Sentiment” capping of the past 147 weekends; the Cartel has not
been able to prevent gold from rising above $1,300/oz, which is where
it stands as I edit just after Monday’s COMEX open. In fact, aside from
a brief moment in early 2015 – before the Cartel orchestrated the final phase
of the four-year “bear-market” that ended in December 2015 – gold hasn’t been
above $1,300 for nearly two years.
Per below, the massive “reverse head and shoulders” pattern the Cartel’s
manipulations inadvertently created over the past nine months is on the cusp
of pushing the price above an even more massive, equally artificially created
“resistance level” at roughly $1,400/oz. And when it does, the 2011
high of $1,920/oz will be firmly in “Economic Mother Nature’s” sights.
Not to mention, silver’s inevitable, “ultimate
quadruple top breakout” above $50/oz. Upon breaking $1,400/oz – and
equivalently, roughly $22/oz for silver – the world at large will realize the
PM “bear market” is over – and start buying en masse, as they did in 2011.
What the world will look like then – politically, economically, and socially
– is another story, but my sense is it will be quite ugly.
To wit, this weekend’s “horrible headlines,” portending what awaits
for years to come…
1. Puerto Rico will default today; which, when all is said and
done, will, due to its status as a “U.S. territory,” saddle American
taxpayers with an additional $70 billion of unpayable debt.
2. Italy, mere weeks after forcing its insolvent banking system to fund
the €5 billion “Atlas” bailout fund, has already run through more than a
third of the funds – enroute to the world realizing the entire Italian
banking system, with its €360 billion of cumulative bad loans, is on the
verge of collapse
3 . The “democracy” the U.S. government attempted to create in Iraq, after
having completely destroyed the country over 15 years’ time, is on the cusp
of imploding into chaos
4. China reported an “unexpectedly” weak 50.1 PMI print on Saturday,
depicting an economy either in, or on the verge of, recession, “6.7% GDP
growth” notwithstanding.
5. Japanese stocks continued to plunge, down a whopping 8% in the three
trading session since the Bank of Japan’s historic “policy
error” Thursday morning; of LOL, NOT extending QE further.
6. The U.S. government inaugurated a “monitoring list” of five Central
banks (China, Japan, the ECB, South Korea, and Taiwan), which it deems to be
manipulating currencies downward – as the “final currency war” I first warned
of 3½ years
ago goes nuclear.
Sadly, such headlines are a mere appetizer to today’s “main event” – of
the “exploding unintended ramifications” of three years of expanding negative
interest rates; which cumulatively, have consumed nearly $8 trillion of
global sovereign bonds, and counting.
To that end, NO ONE has more emphatically warned of the carnage negative
rates would wreak, since July 2012’s “NIRP vs. Gold, Part I,” just after
Mario Draghi promised to do “whatever it takes” to “save” the Euro.
Which, ironically, has entailed hyperinflationary monetary policies on a par
with the world’s most destructive Central banks. Regarding such, “NIRP
vs. Gold, Part VI – the horrific end game of a cashless society” was
written 2½ months ago, when the “war on cash” commenced with this anonymous
quote from a “major global policy maker” at Davos, according to a top Morgan
Stanley analyst. This must read article gives a detailed chronological
description of the evolution of global “negative interest rate policy” –
since that fateful day in 2012 – as described by “NIRP vs. Gold” articles,
parts I through V.
Clearly, the “war on cash” has returned with a vengeance, on the cusp of
going parabolic. In March 21st’s “where there’s smoke,”
I warned it would return as soon as the historic, PPT-orchestrated market
goosing ran its course. Which, per the Japanese equity plunge noted
above (no less, as we learned the Bank of Japan has become a top ten holder
of more
than 90% of Nikkei stocks), has decidedly occurred. To wit, the
exploding proliferation of NIRP “unintended ramifications,” such as…
1. Some of the Western world’s largest pension funds, like the U.S.’s
Central States pension fund (CSFP) and the UK’s Universities Superannuation
Scheme (USS), announcing major benefit cuts to avoid insolvency
2. Talk about “exploding unintended ramifications!” UPS – as in,
United Parcel Service – apparently reached a collective bargaining agreement
with the CSFP in 2007, promising to cover any shortfall if fund benefits were
cut. Well, in what promises to be an exploding, ongoing theme for years
to come, UPS is taking a $3.2-$3.8 billion charge (nearly a year of free cash
flow) to cover this shortfall.
3. Munich Re, one of the world’s largest reinsurance companies, is not
only publicly hoarding cash – but in a sign of what’s to come for hundreds,
if not thousands of “yield-starved” institutions, in a world of negative
rates, physical gold.
4. Charles Schwab, where I personally keep my cash, started sending notice
to certain customers that it will be “sweeping” money market funds into government
money market funds. In other words, as it can no longer identify
enough money market instruments to maintain a positive yield for clients (I’d
estimate the yield I receive at around 0.1%), it has decided to allow market
forces to “break the buck” on its clients’ funds. In other words, if
governments continue to force rates into negative territory, Schwab – and
thousands of other financial institutions – will be forced to “pass them along”
to clients.
5. Putting the “icing on the cake,” this ominous quote from none other
than the world’s most insolvent bank – and newly admitted gold and silver
manipulator – Deutschebank; which takes the aforementioned Morgan Stanley
quote to a whole new plateau of ominousness, of where the immediate future
is headed…
“It is becoming increasingly clear that the level of yields at which
credit expansion in Europe and Japan will pick up in earnest is probably
negative, and substantially so. Therefore, the ECB and BoJ should move more
strongly toward penalizing savings via negative retail deposit rates, or
perhaps wealth taxes.”
Yes, “negative deposit rates” – like Interactive Brokers announced yesterday
for all Yen-based clients – and “wealth taxes.” In other words, the
“exploding unintended ramifications” of negative interest rates – not to
mention, the viral spread of socialism, fascism, and communism – are right in
front of our faces. Which is why Precious Metals are rocketing higher,
as global investors seek any available avenues to PROTECT themselves.
Frankly, I have NEVER been more fearful of what’s coming – or bullish about
the prospects for gold, silver, and platinum. As unquestionably, the
“war on cash” is about to go, like the simultaneous “final currency war”
amongst Central banks, thermonuclear.
