The Walls Are Closing In

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Published : February 15th, 2017
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Category : Opinions and Analysis

Oh, what a tangled web the world’s bankers, politicians, and oligarchs weave, when they seek to deceive – and thieve – seven-plus billion people.  Who, after having suffered the consequences of four-plus decades of historic monetary ignominy, are responding in kind.  To that end, I believe 2015 and 2016 were the “years of awakening”; when the Greek “OXI” referendum, the Catalonian secession vote, the UK BrExit, U.S. Presidential election, and Italian Constitutional Reform referendum went decidedly against said “powers that be.”  Followed by 2017, when the Dutch, French, German, and likely Italian elections will have the same result.  Not to mention, the increasingly likely GrExit, if Greece can’t (or won’t) obtain the €86 billion of principal payments it owes the Troika by July.  Throw the in explosive currency and trade wars depicting the final stage of history’s largest, most destructive fiat Ponzi scheme, and you can see why I believe 2017 will be remembered as the year of money printing, draconian government actions, and monetary revolution.

The increasingly dangerous “two-step” being attempted by the current incarnation of “powers that be”; in a desperate attempt to kick the can that last millimeter; and in the process, steal as much of the world’s wealth as possible; reminds me of Richard Gere singing “Razzle-Dazzle” in Chicago – by using his charm, charisma, and con-man skills to fool the judge, jury, and public.  Only in this case, we’re not speaking of the smoothest actor in Hollywood, but Keystone Kop bankers; hack politicians; and, well…Donald Trump.  Serially, ‘da bums are being thrown out of office – whilst those that aren’t  losing all credibility, at an exploding rate.

At what point does the charade of Greek “bail-outs” end, resulting in the default of its €450 billion of debt (plus €200 billion off balance sheet) – catalyzing a cascading currency crisis of second and third world nations, when investors start predicting “who’s next?”  To that end, what says “catastrophe waiting to happen” more than the below chart – of how cumulatively, the dozens of nations considered “emerging markets” have seen their debt to (upwardly manipulated) GDP ratios surge from 210% to 430% in just the past five years alone; as on average, their fiat currencies have plunged to new all-time lows.  And yet, due to the soon-to-collapse “central bank puts” known as NIRP and “QE to Infinity”; and historic, unprecedented equity market “support”; investors have never been so complacent.  Not to mention, as Western equity and fixed income markets are trading at all-time high valuations – amidst, for all intents and purposes, all-time low fundamentals; and insolvency, if today’s massive Credit Suisse loss, and announcement of 6,500 layoffs, is any indication.

Or how about the recent comments from everyone from Mario Draghi himself; to Germany’s Vice Chancellor; America’s newly appointed European Union Ambassador; and now European Commission President Jean-Claude Juncker; who all have, in recent weeks, suggested the end of the European Union is nigh.  The latter of which, espoused yesterday that he wasn’t running for re-election because he believes the BrExit will prove to be the EU’s death blow, “because the British will be able to divide the other 27 member states without great effort.”

But best of all, on this “Humphrey-Hawkins Day” – when Janet Yellen must deliver a de facto FOMC statement to Congress, amidst not only such terrifying geopolitical issues; but the uncertainty of what the Trump Administration might do; and the danger of (10-year) interest rates rising above the 2.5% “economic line in the sand” that will ultimately destroy the world, starting with the U.S. government.  And oh yeah, exploding inflation – worldwide; in large part, due to the ad hoc “oil PPT’s” efforts to prevent the mass implosion of the planet’s largest industry – which ultimately, MUST occur amidst history’s largest crude oil glut.

Just one hour before her testimony, she was “blind-sided” by the biggest PPI inflation surge in five years; up 0.6% in January, and even 0.4% “excluding food and energy’ – in both cases, double the Street’s expectations.  Clearly, energy prices were a big part of the surge; however, energy prices are not part of the core, which surged as well; in large part, due to the exploding rent and healthcare costs caused by other overt and covert government and Central banking “policies,” and their intended and unintended consequences.

This, one day after Chinese inflation was reported to have surged to a six-year high; and two days before German inflation hit its own six-year high – in the latter case, simultaneous with a massive 3% plunge in industrial production that screams stagflation at the top of its lungs.

The “walls are closing in” on said “elites” – starting with Whirlybird Janet today, who must “razzle dazzle” in Richard Gere-like fashion, if she wants markets to actually believe that 1) the economy is “recovering” – when hard data is collapsing, and Treasury tax receipts declining for the first time since 2009; 2) the Fed will raise rates three times this year, despite said economic collapse – and oh yeah, Donald Trump espousing that the dollar is “too strong”; 3) inflation is “transitory” (because oil prices will eventually go down?); and 4) record high stock and bond valuations are “reasonable,” even in the face of surging inflation and her expectation of Fed rate hikes.

If you believe she can do that – and in the process, hold Precious Metal prices in check (particularly as silver just surged above its 200 DMA), I have a bridge in Brooklyn to sell you.  My friends, “the walls are closing in” – on the powers that be, Donald Trump, and any other persons and/or institutions people still have “hope” and/or “faith” in.  And thus, with mathematical certainty, the monetary end game’s inevitably arrival is becoming more and more imminent with each passing day.

Data and Statistics for these countries : Georgia | Germany | Greece | All
Gold and Silver Prices for these countries : Georgia | Germany | Greece | 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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