first majestic silver

The All-Time Biggest Lie

October 28, 2014

In TPTB’s desperation to “manipulate, jawbone, and pray” equities back up, both the frequency and blatancy of government intervention has achieved unprecedented levels.  Not only are they in full-fledged panic mode for its own sake, knowing the world has returned to “2008, with one temporary exception,” but a slew of potentially cataclysmic – and Cartel-destroying – events are upcoming like Wednesday’s expected “QE-ending” FOMC meeting, next week’s mid-term elections, the Catalonian secession referendum November 9th and the “granddaddy of them all” November 30th, when the Swiss decide whether to re-link the Franc to gold.  This is particularly true in the United States of Financial Mass Destruction, where the PPT has supplied “dead ringer algorithms” in each of the seven days since last Wednesday’s liquidity vacuum, despite an unrelenting onslaught of global horrible headlines.

To wit, European equities have barely rebounded, whilst the “Dow Jones Propaganda Average” has “miraculously” recouped nearly all its losses, via its best week in 21 months – for absolutely ZERO reason other than manipulation.  Conversely, precious metals have been attacked with a vengeance even I am shocked by – albeit decidedly unsuccessfully as gold remains well above its “triple-bottom” low of $1,180/oz.  As for silver, this week’s paper raids cannot be described any better than “Cartel Suicide” – as at current prices, production will collapse into oblivion and the mining industry will vanish (wait until you see the downward reserve revisions if silver ends the year in this price range).  Throw in the fact that base metal prices are crashing as well – with an utterly catastrophic near-term outlook; and the prognosis for silver by-product mining is equally bleak.  Meanwhile, this “perfect storm” is only growing more powerful, as worldwide physical silver demand has never been higher – and at least one miner, First Majestic, is withholding production and calling for creation of a “silver Cartel.”  Below, take a gander at Friday’s blatant market intervention” – featuring prototypical “dead ringer” algorithm for the Dow; PM waterfall declines at the 10:00 AM EST “key attack time”; and equally blatant DLITG, or “Don’t Let it Turn Green” algorithms thereafter.

In the PMs case, such manipulation was particularly egregious – as for the first time ever, they were attacked in response to terrible economic news!  First on Thursday, when PMI manufacturing “unexpectedly” declined sharply; and then Friday, when the “all-time biggest lie” – i.e., last month’s new home sales report – was exposed for the fraud it was.  But more on that in a moment.

While the MSM distracts the handful of people still paying attention with hysteria about two or three Ebola cases, real horrors are occurring the world round – particularly as relates to the outlook for financial assets.

In China, new price data depicts its historic real estate bubble is rapidly deflating; whilst in Europe, debt and unemployment continue to rocket higher – with even the perpetually cheerleading Markit organization admitting it.

The Eurozone PMI shows the region teetering on the verge of another downturn.  Growth is so anemic, increasing numbers of companies are being forced to lay off staff and slash prices in an attempt to cut costs and boost sales through discounting., October 23, 2014

Moreover, an astonishing 25 European banks or 20% of the total failed the ECB’s latest “stress test” simulation; which, given how easy such tests are, suggests countless banks are on the verge of being the next Espirito Santo.  Consequently, “Goldman Mario” was out in full force Friday morning, jawboning in grand fashion for more money printing.  Unfortunately, it didn’t work – as unlike the powerful algorithm programs of the U.S. PPT, European interventions couldn’t prevent yet another sell-off.  Friday’s report that French joblessness hit an all-time high depicts just how close Europe is to the precipice; and next month’s planned, nationwide worker strikes in Greece will highlight it further.

Meanwhile, as validated what we wrote in this summer’s “need or want, demand is dying,” Sears announced massive store closings as the “changing of the guard” intensifies.  Thus far, the 3Q earnings season has demonstrated a third of the Dow’s components posting flat or lower revenues; and even yesterday’s surprise Saudi production cut couldn’t prevent oil from challenging its multi-year lows.  And speaking of “changing of the guard,” consider what stocks and precious metals would have done in freely trading markets, in response to what the leader of America’s most powerful enemy said Friday morning.

However, even these “horrible headlines” don’t hold a candle to the fraud that was yesterday’s U.S. “New Home Sales” report based on the massive downward revision of August’s data.  To that end, recall last month’s initial reading, in which it was reported that new home sales rocketed higher from 404,000 in July to 504,000 in August.  Never mind that new homes account for just 5% of the total home sale market, and that such an explosion made absolutely ZERO sense when considering all other housing data such as the horrific downward trend of the 95% of the market represented by existing home sales.  Or, for that matter, the admitted 15% margin of error; or, as demonstrated below, the fact that essentially all previous numbers (especially “strong” ones) have been revised sharply lower.

Zero Hedge

As you can see, August’s “504,000” home sales were revised to just 466,000.  Moreover, given this data series’ lamentable history, it’s highly likely September’s pitiful 467,000 figure will be revised lower as well, perhaps significantly so.  Next, consider that when the initial August figure was published on September 24th (what a shock at 10:00 AM EST), the Dow surged more than 150 points due to “recovery” excitement, whilst gold was subjected to yet another $10/oz. waterfall decline.  In other words, every imaginable aspect of this report was fraudulent exposing both the U.S. economy for the “island of lies” it is, and its “markets” for the sham they are.  In fact, when I saw this report emerge – again at 10:00 AM, after which stocks surged whilst PMs plunged – all I could think of was the great scene in “Stand by Me,” when the kids executed the “all-time train dodge.”  Hence, today’s article title.

Of course, no matter how corrupt TPTB are they can’t manufacture gold.  Supply and demand have never been tighter; and as discussed in this brilliant article, it’s highly likely the Cartel’s “end game” is rapidly approaching; perhaps, far sooner than most can imagine.  Which is why we repeat our mantra – on this, my third anniversary at Miles Franklin – to PROTECT YOURSELF, and DO IT NOW!


Courtesy of

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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