Once again, Kerry Lutz of the Financial Survival Network put on a fantastic, thought-provoking conference, together with his partner - my good friend - Robert Ian, of Conquer Change. The theme was "Countdown to Collapse"; in which, as you can imagine, I focused principally on the financial aspect. The aim was to not only educate of the inevitable, potentially imminent economic calamity, but to help people prepare; and for the acutely optimistic, to discuss ways to positively impact the situation.
One speaker said that generally speaking, those who are optimistic act, while those who "bitch and moan" are ultimately acted upon. I took great exception to this comment, as I have spent nearly 15 years "complaining and moaning" about the economic outlook and being decidedlyright. Moreover, few have "acted" as much as I; in not only shielding my family from the intensifying economic storm, but re-inventing myself in a manner that has not only enabled my career to survive - and at times, thrive - but help others do the same. Typically, a "half-full" glass is a favorable personality trait. However, when it comes to the current economic outlook - worldwide - I have "less than zero" optimism; and thus, the more prudent course is clearly that of realism.
Whilst speakers discussed the "Countdown to Collapse," I noticed that not one, not two, butthree separate "coup events" were ongoing - on three different continents. Clearly, the Ukrainian situation - where the President was overthrown, amidst bloody, nationwide riots - is getting the most press; as it should, given the potential dire geopolitical ramifications. The fact that Obama is threatening to invade this obvious Russian "sphere of influence," whilst the Russian Ruble is plunging to an all-time low, no less, makes the Ukrainian coup a very dangerous situation indeed.
However, the pure, unadulterated hatred Venezuela has for America cannot be underestimated, given that it is a major OPEC oil producer and it, too, is amidst a bloody revolution that could ultimately yield political chaos. The Venezuelan Bolivar has been officiallydevalued by 75% since 2008's Global Meltdown I. However, the black market rate is much lower, yielding the early symptoms of a Zimbabwe-like hyperinflation. It is impossible to know what impact this will have on global oil supply - particularly to the U.S., which imports 400,000 barrels from Venezuela annually; let alone, OPEC in general, and the entire South American region. After all, not only is Venezuela on the verge of hyperinflation, but so are neighboring Columbia, Argentina and Brazil.
As discussed in September's "Most important article I've ever written," the average currency -worldwide - is down nearly 30% since Western Central banks accelerated their money printing efforts amidst 2011's Global Meltdown II; and more than 40% for the "Fragile Five" currencies, utilized by more than a quarter of the world's population. Consequently, inflation is accelerating worldwide, as the global fiat Ponzi scheme is quite obviously entering its death throes.
I guess we could choose to ignore the emerging, bloody revolution in the Congo, given how it has been unstable for the entirety of its history. However, in this case, such discussion appears appropriate; in that it, too, is exposed to the catastrophically destructive impact of "reserve currency" wielding Central banks like the Fed, ECB and Bank of Japan. Moreover, the threat of a
regional destabilization cannot be underestimated; as the Congolese Franc, too - like the Venezuelan Bolivar, Ukrainian Hyrvnia and Russian Ruble - has plunged to an all-time low.
Sadly, the symptoms of collapse are becoming more acute with each passing day. No continent, nation, or municipality is immune; as seven billion people suffer from the sins of a handful of "elite" bankers and politicians. In Austria, one of the nation's largest banks - nationalized in 2009, amidst Global Meltdown I - is yet again on the ropes; and horrifyingly, pondering a back door "bail-in" to recapitalize it. In the U.S., food stamp participation just hit another all-time high, at 47.6 million people; with another three-plus million likely to join by year-end. Remember, food stamps are printed just like dollars; and given a world alreadyexperiencing surging food inflation, it's only a matter of time, before they, too, are hyper-inflated. And finally, there's China; where an historic credit bubble appears on the verge of collapse; and consequently, said "symptom" is being addressed with the planned construction - at an anticipated cost of nearly $150 million - of a massive, 1,500 tonne gold vault!
And thus, when you see this incredible set of charts - of the S&P 500 "mysteriously" decoupling with any and all pieces of negative economic data - it becomes crystal clear how terrified TPTB have become of global perception of the aforementioned reality becoming mainstream. Of course it eventually will, as "Economic Mother Nature" has had enough; and clearly, appears on the verge of unleashing decades worth of repressed economic wrath.
Thus, we plead with you to consider how dire - and potentially imminent - the situation has become; and subsequently, to PROTECT your assets with real money while you still can!
The Tide Is Receding
It's hard to believe the deadly Indian Ocean tsunami that killed 230,000 people was nearly a decade ago; as after all, it was the worst natural disaster of our lifetime. Until then, I knew little - if anything - of the mechanics of tsunamis; but as you can imagine, they received plenty of media attention thereafter. One thing I learned, as immortalized by numerous amateur YouTube videos, was that ominously, the tide recedes as the tsunami approaches the shore - in some case, for several miles due to the enormous suction created by the rapidly circulating waves.
As I watch the PPT take the Dow higher this morning, amidst seemingly endless "horrible headlines" - such as the Chicago Fed National Activity Index falling from +0.16 to -0.39; the PMI Services Index plunging from 56.6 to 52.7; and the Dallas Fed Manufacturing Survey plummeting from 3.8 to 0.3; visions of receding economic waves are filling my mind. The same goes for the rest of the world, of course; albeit, Chinese stocks haven't been so lucky - amidst their worst three-day decline in four months, following the publication of terrifying data, suggesting its historic housing bubble is rolling over. In fact, the rate of change of globaleconomic activity is plunging as rapidly as at each of the worst periods of the past decade; and sadly, Central banks have no more "ammo" left to fire at it.
Have no fear, they'll certainly try to "stimulate" with freshly printing money. But sadly, they'll only make things worse; as when banks simply won't lend - because they can take the ECB's unlimited 0.25% funds, via a "back door bailout" with no end in sight - they'll simply buy the sovereign bonds "guaranteed" by Draghi's promise to support such bonds with the soon-to-be-fired OMT bazooka.
Like the U.S. government, Europe's "leaders" continue to publish data suggesting "deflation" is the continent's greatest fear. However, aside from the fact that such data is blatantly "cooked," it doesn't account for the most important factor of all - i.e., price deflation only affects items we "want versus need." Today, for example, it was reported that the Eurozone experienced negative 1.1% inflation in January; but looking at the below chart of UK fuel prices, it's hard to see how British consumers are that excited. After all, they're still paying the equivalent of nearly $10/gallon for gasoline ("benchmark average UK petrol prices remain stubbornly above 130 pence a liter," according to the Automotive Association of Britain"); and throughout the entirety of Europe, average petrol prices are just 5% lower.
Of course, they're simply setting the stage for Draghi to not only unleash the OMT - now that the German Constitutional Court essentially gave it the A-OK; and potentially, instituting a hyperinflationary "NIRP," or negative interest rate policy. Here's what "Goldman Mario" said two weeks ago; and frankly, I wouldn't be surprised if "all available instruments" are not unleashed simultaneously with the Fed pausing and/or reversing "tapering," and the Bank of Japan expanding Abenomics.
We continue to expect the key ECB interest rates to remain at present or lower levels for an extended period of time. Given broad-based economic weakness and subdued monetary dynamics. We remain firmly determined to maintain a high degree of monetary accommodation and to take further decisive action if required.
-ECB.europa.eu, January 9, 2014
As for Precious Metals, which just as inevitably, will break their Cartel shackles and demonstrate what "inflation protection" means - and then some; it appears that what we wrote last Wednesday is already coming to pass.
The new 'lines in the sand' appear to be $1,330/oz for gold and $22/oz for silver; and despite my distaste for short-term predictions, I get the impression such hurdles won't be as formidable as those witnessed for three months at $1,250/oz, and eight months at $20/oz.
-Miles Franklin, February 18, 2014
Sure, the Cartel executed their 26th "Sunday Night Sentiment" attack of the past 28 weeks (does last week's omission count, given Monday was a holiday?); but once Asia opened, it was all uphill from there. Yes, as I write at 10:30 AM EST, gold is up - what do you know, by exactly its 1.0% "upside cap" level. However, it is well above $1,330/oz., while silver has yet again pushed above $22/oz.
Just as we wrote last week - of the emerging, global, "realization of reality" - themainstreaming of gold manipulation is gaining a life of its own. Call it the expanding dislocation of paper and physical demand; the German repatriation fiasco; Deutschebank resigning from the London Fix under allegations of fraud; or simply, 15 years of unnatural price behavior. Irrespective, the manipulation story is spreading virally; and in a world of seven billion people, with just a tiny amount of available supply, who knows what may happen in the coming months and years?
Just this weekend, no less than the UK's Financial Times wrote a scathing article on the topic - citing a Fideres study that found "global gold prices may have been manipulated on 50% of occasions between January 2010 and December 2013." Comically, the article has already been removed from the internet (remember when Bill Murphy's March 2010 CFTC testimony was "accidentally" cut off, just as he started speaking?). However, not before GATA - and numerous other alternative media outlets - posted it, such as here.
We cannot emphasize more strongly that, all along, the Cartel's "Achilles Heel" was the inevitable realization that price action has not been catalyzed by real physical supply and demand factors, but fake paper ones instead. Now that this weakness is being exposed, it's just a matter of time before the scheme implodes upon itself - just as the "London Gold Pool" in 1968, and every other attempt to mask Central bank currency inflation throughout history.
Consequently, are you going to grab a chair before the music stops - and the tide returns? Or will you fight over one with thousands of others - when it's already too late?