It’s early Wednesday morning, with gold up $14oz; silver up $0.15/oz; and
“everything else” – from oil (Brent crude at 2004 lows!), to base
metals, equities, junk bonds, and Treasury yields crashing. Whilst, in
the wake of yesterday’s “crashing currency cornucopia” article – countless
currencies, “commodity” or otherwise, are freefalling.
Let’s just start with some of the “minor” horrible headlines of the past
24 hours; after which, we’ll build up to the BIG KAHUNA that has the global
economy and financial markets on the precipice of the abyss…
- U.S. Mortgage applications plunge 15%, refinance
applications 37%, last week
- Most Americans are one paycheck away from the street –
63% can’t deal with a $500 emergency
- The next default wave – Banks have quietly shrunk these
25 energy companies’ credit facilities
- The drain continues, as U.S. exports more gold to Hong
Kong than it produces
- Apple plunges after Nikkei reports iPhone production cut
30%
- Baltic Dry Index hits new all-time low, as commodity
prices continue plunge
- WTI plunges to $34.50/bbl, as Canadian Loonie hits
12-year low
- Germany in shock after monstrous New Year’s attacks –
Rapes by 1,000 men “of Arab or North African origin”
- Puerto Rico defaults for second time – Claims of
“scheming” designed to crush island citizens
- Wall Street’s biggest perma-bull just slashed his Q4 GDP
forecast to +0.5%, says it may be too high
- Sweden prepares for foreign exchange war (in
unofficially pegging the Krona to the Euro) with bloodthirsty hedge
funds
- U.S. auto sales plunge by most in six months – biggest
miss versus expectations since November 2008
And then there’s the “official” MSM reason for this morning’s global stock
plunge, which has Dow Futures down nearly 300 points just before the NYSE
open. Which, whilst it certainly is “bad news” – and part and parcel
with the unfolding explosion of global geopolitical tensions – is decidedly
NOT the principal catalyst for this morning’s financial implosion…
Moreover, for some “comic relief,” even I am in awe of the
unprecedented falsity of this morning’s ADP “employment” report – in somehow,
despite the worst economic data since 2008, proclaiming December to have
produced a whopping 257,000 jobs. I mean, has ADP, like the BLS,
adopted “double seasonal adjustments?” Or its own, fictional
“birth/death model?” Or has it started to include panhandlers in the
ranks of the “employed?” And has Mark Zandi officially become a modern-day
Wesley Mouch; i.e., America’s de facto head of economic propaganda from Atlas
Shrugged?
However, what’s really troubling financial markets – aside from the
inexorable bursting of the epic, unprecedented bubbles created by Central
banks’ cumulative “response” to the 2000 and 2008 crises – is last night’s
double-barreled bombshells from China. One, in accelerating the
pace of the Yuan’s devaluation – from 6.20/dollar at the time of the initial
devaluation in August; to 6.55/dollar this morning, nearly a half-percent
weaker than yesterday morning. And second, the far more important development
of the “offshore Yuan” market uncontrollably plunging – portending,
potentially in the very near-term – the cataclysmic Yuan
devaluation I first predicted last April; and afterwards, mere hoursbefore
the initial devaluation four months ago.
Trust me, it’s no coincidence that the recent, dramatic “leg down” in the
global commodity and currency implosion commenced that very fateful day in
early August. Or that the recent acceleration of the Yuan’s devaluation
commenced the day afterit was accepted into the IMF’s “strategic currency
basket.” Regarding the latter, the Chinese government was clearly
waiting for its hollow, but symbolically important “acceptance” into the
Western Ponzi scheme before taking the matter of its own collapsing Ponzi
scheme into its own hands. Which is exactly what it is doing, in
“setting the stage for a global currency catastrophe.”
Of course, the loss of control of the “offshore Yuan” market – i.e., the
“unofficial,” or “black market” rate that all dying currencies
eventually fall to (like Argentina and Venezuela last month) – is EXACTLY
what I described in September 1st’s “most
dangerous, destabilizing force on Earth.” In it, I warned of the
tightrope the PBOC was walking in attempting to “gradually” devalue the Yuan
whilst simultaneously “supporting” the offshore Yuan – by not only buying
offshore Yuan whilst selling onshore Yuan, but “cracking down” on those nasty
speculators attempting to “sabotage” the great Chinese empire by shorting
offshore Yuan.
“Taking the cake in the category of Keystone Kops financial planning is
the fact that the Chinese are wasting countless hundreds of billions
supporting the (Offshore) Yuan, whilst at the same time devaluing it!”
My friends, thisis why I know history’s largest fiat Ponzi scheme,
involving all nations, is on the verge of its inevitable
annihilation. The ramifications are too broad and terrifying to list
here – which is why it’s so convenient that the Miles Franklin Blog archives
the hundreds of articles and podcasts I and David Schectman have produced –
as always, for free. Whether “the powers that be” can hold on
another year – an election year, at that – without a major financial
disaster occurring is something I can’t predict. However, the “end
game” is irreversibly set in stone, approaching like a runaway train on an
icy, downhill track. And as for what asset class will be most in demand
as this unprecedented calamity unfolds, I have never been more certain it
will be Precious Metals. In other words, I can only reiterate, as
vehemently as possible, to PROTECT YOURSELF, and DO IT NOW!
