first majestic silver

853 Points Of Infamy

December 19, 2014

First off, let me re-emphasize the most valuable piece of financial information imaginable – which I have discussed ad nauseum for the past decade.  Which is in executing your personal due diligence process, to make sure your information sources include the handful of “good, smart people” that both know what they’re talking about, and have your best interests at heart.  Here at the Miles Franklin Blog, I have found a “home away from home,” as for the first time in my 25-year career, I truly believe in what I do, with every ounce of my being.  David Schectman, Bill Holter and our entire sales and management team, too, believe in precious metals with all of their hearts – and not just their ownership, but the service we provide to people entrusting their life’s savings with our products.

Of course, the line between “good” and “bad” information sources is often blurred, which is why one should be particularly diligent in their “exploration process” – creating a “mosaic” of sorts, in judging how much credibility to give various media.  A perfect example is Zero Hedge, which unequivocally gives the best real-time “news” of any financial media website.  However, at times – rare as they may be – it publishes items which make me roll my eyes in disbelief.  To wit, Wednesday’s Zero Hedge article titled “No More “Considerable Time” – Meet the New, “Patient” Fed”; which I decidedly refuted in yesterday’s MUST LISTEN Audioblog, detailing how not only did the Fed keep “considerable time” in Wednesday’s policy statement, but verbatim to its October statement.

To that end, Zero Hedge wasn’t “wrong” to write of “rumors floating around Wall Street” that Russia was selling gold in response to its currency crisis.  Moreover, it’s not like such rumors, even in the Cartel-dominated paper market could possibly have a material price impact; let alone, that if Russia in fact sold gold, they would do so directly to the Chinese, and NOT in “Cartel fashion” by dumping it at on the futures market.

First of all, to promulgate anything “Wall Street trading desks” say is sickening enough, given they are not only the mortal enemy of truth-seeking organizations like Zero Hedge, but the world’s biggest liars – particularly regarding their “mortal enemies,” gold and silver.

As to this specific rumor, it was particularly ridiculous given there is not a chance a private organization would know if Russia’s Central bank was selling gold; let alone, a Western investment bank that represents all Vladimir Putin despises.  Better yet, even Zero Hedge admitted the rumor emanated from France’s Societe Generale, which is heavily exposed to Russian loans.  In other words, SocGen is heavily incented to lie about Russian official actions, in hopes they can stabilize contagion fears.

Thus, when Russia came out this morning to say it not only didn’t sell gold, but added to its record holdings in November, all I could say was “duh”; and, as always, warn all who would listen to be careful where they get information.  In fact, I’d bet that when December’s numbers come in, we’ll see Russia dramatically increased its gold reserves further – knowing full well that only precious metals can truly protect them from the inevitable collapse of all fiat currencies – including their own.

In the Audioblog, titled “Laughable FOMC statement sets New Central Bank Credibility Low, Until the SNB One Ups it,” we give a play by play of the past three days’ news and “market action”; in my view, the most egregious cumulative propaganda and market manipulation salvo I have witnessed – ironically, surpassing a “record” achieved only last month, when TPTB utilized every illegal, immoral and unethical means imaginable to prevent the “Save our Swiss Gold” referendum from passing.

However, even the “market action” around the Swiss referendum pales in comparison to Wednesday’s FOMC statement.  Frankly, even I was amazed to see just how desperate they were to “prove a point” with this statement; and by a “point,” I don’t mean any actual policy change, but to make sure markets “painted the picture” they want painted.   With the efforts they exerted to make sure stocks and the dollar surged; the 10-year Treasury yield returned to the 2.2% “line in the sand” I wrote of two months ago; and, of course, capping precious metals, you’d think the fate of the fiat currency regime itself was at stake!

Sadly, this couldn’t be truer – although the vast majority of the world’s political and financial “elite” don’t have the slightest clue.  Fortunately, Miles Franklin Blog readers are well aware of this inevitability; and hopefully, the desperation of the past two months’ manipulations helps you realize the aforementioned inevitability may be rapidly morphing into imminence.  Heck, just watching my screen this morning – when, yet again, countless currencies are dramatically declining, it couldn’t be clearer the “single most Precious Metals bullish factor imaginable” is playing out, NOW.  To wit, following the Russian Ruble’s collapse earlier this week, the Belarus Ruble and Nigerian Naira currencies have been halted, amidst their own horrific collapses.  In the case of the Naira, which like the Ruble, is essentially a “petro-currency,” the 173 million people that use it have been instantly impoverished – in large part due to the Federal Reserve itself; which not only catalyzed the oil price inflation that created massive excess capacity the world round, but in abusing its “reserve currency status,” has caused a massive “liquidity vacuum” that has terrified capital fleeing anything not nailed down for the perceived “safety” of the dollar.  It doesn’t take a rocket scientist to predict how this will end for the “almighty dollar” – with the only remaining questions, being when and how.

As for the “recovering” U.S., the fact that the Fed, despite its relentless propaganda, did NOT take “considerable time” out of its policy statement screams loudly and poignantly of how its governors truly think.  Not to mention, their average expectation for the Fed Funds rate at the end of 2016, in just the seven weeks since the last FOMC Meeting, plunged from 2.9% to 2.5%.  And with good reason, as first on Tuesday – when the PMI Manufacturing report was released; and then yesterday, when the PMI Services report came out, even the government’s “island of lies” data reporting couldn’t hide the freefall America’s economy is in.  Which again, it doesn’t take a rocket scientist to understand, given the entire world is amidst a rapidly expanding recession; by our estimation, the low global economic point of our lifetimes.

US PMI chart

Thus, to watch precious metals so blatantly capped whilst the “Dow Jones Propaganda Average” was goosed by an unbelievable “853 points of infamy” between Tuesday morning’s lows, and this morning’s (Friday’s) highs was truly galling – particularly when viewing how other markets performed during this period.  To wit, when the markets were on the verge of collapse Tuesday morning, the WTI oil price was around its five-year low of $54/bbl.; which, what do you know, was exactly where oil closed Thursday night, with the Dow nearly 800 points higher.  As for the CRB Commodity Index itself, it was 1.5% lower Thursday afternoon than Tuesday morning, led lower by base metals such as copper.  And thus, the fact that gold and silver, which rocketed higher Tuesday morning due to their timeless safe haven status, were 2% and 5%, lower Thursday afternoon, amidst a veritable blizzard of PM-bullish news, demonstrates just how terrified TPTB were of a spreading financial contagion.  Clearly, they had hoped to generate “confidence” with a heavily orchestrated incrementally “hawkish” FOMC statement.  However, given the aforementioned “extraneous events” – from collapsing commodities and currencies; to the alarming result of the Greek snap elections; to horrible economic news in the U.S., Japan and Europe; and oh yeah, the “unexpected” Swiss Bank NIRP announcement; TPTB had to settle for the next best thing – i.e., one of history’s most blatant stock goosings.

Never in history has such manipulation been attempted, and reading today that even in Europe – which from a financial engineering standpoint is light years behind America’s expert riggers – 76% of all equity trading is of the high frequency variety, I can only gasp in considering how horrible the carnage will be when this historic House of Cards implodes.  Heck, today alone, amidst incredibly illiquid pre-holiday trading conditions, the U.S. “e-mini” S&P futures contract traded a record volume at the open, whilst the staid old USA Today actually referred to the “Plunge Protection Team.”  Thus, it couldn’t be more obvious that the “chasm of destruction” between economic reality and rigged financial markets has never been wider, or that the “game” is in its final blow-off stage.

As David Stockman eloquently put it, Central banks are now “uncorking the delirium phase” of market rigging; and in our view, this week’s “853 points of infamy” may well be the denouement of such lunacy.  Meanwhile, with gold trading at – I kid you not – $1,199/oz., after having been capped an additional three times at the Cartel’s current “line in the sand” at the “key round number” of $1,200/oz., readers have the ability to buy history’s most timeless safe haven assets for “pennies on the dollar.”


Courtesy of www.milesfranklin

Andrew ("Andy") Hoffman, CFA joined Miles Franklin, one of America's oldest, largest bullion dealers, as Media Director in October 2011. For a decade, he was a US-based buy-side and sell-side analyst, most notably as an II-ranked oil service analyst at Salomon Smith Barney from 1999 through 2005. Since 2002, his focus has been entirely on precious metals, and since 2006 has written free missives regarding gold, silver and macroeconomics. Prior to joining the company he spent five years working as an investor relations officer or consultant to numerous junior mining companies.

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